Buying your first car can be both an exciting and overwhelming process. Knowing what to expect can help you make an informed decision about the big purchase so you can pick up those keys without any buyer’s remorse. As you head off on the search for your new set of wheels, you’ll need to do some research about all the options available to you and pay attention to red flags. Here are some first-time car buyer mistakes to avoid:
#1: Counting on the Seller for a Valuation
Many first-time car buyers don’t realize they can estimate the true value of a car without ever going to a dealership. Using online tools like Kelley Blue Book can help provide you with a fair market value for the car you have your eye on before you go to buy. The key is doing your due diligence beforehand to ensure you’re getting the best deal.
#2: Shopping Without a Wants and Needs List
Your car needs to suit your lifestyle, your budget, and your personality. Putting together a “Wants” and “Needs” list before you start searching will make the process much easier because you’ll be able to prioritize features and characteristics of the vehicle. For example, are you a college student looking for an economical and compact vehicle to get you around the city on a budget? You’re probably in the market for a compact or even eco-friendly car. Are you a busy mother of three who needs extra seats and space? You’re probably in the market for a minivan or mid-size SUV. Making a list of your personal needs and priorities can help you make a better car buying decision.
#3: Buying a Brand New Car
Any car purchased brand new, fresh off the production line, loses value the minute you drive off the lot. In the world of cars, depreciation on a new car is much higher than depreciation on a used car — even a used vehicle that’s only a year old. That’s why it makes good financial sense to find a used car with low miles and minimal wear and tear. It’s almost as good as brand new, and in some cases, might still be under warranty. New isn’t necessarily better, so it pays to shop around and find a near-new vehicle.
#4: Ignoring the Cost of Added Features
While amping up the sound system or adding some slick navigation features to your vehicle sounds like a great idea when you’re in test drive mode, those extra upgrades can add up fast. Make sure you’re not falling for a good sales pitch about adding premium tires, a new set of speakers, and other upgrades when your budget won’t really allow for it. As long as the current systems are in good order, focus on finding a car that’s in ‘as is’ condition and works for you and your lifestyle.
#5: Falling Into Financing Traps
Many dealerships extend attractive financing offers, such as no money down financing and low monthly payments, on the car you’re eyeing. Before you sign the dotted line, make sure you’re aware of the total cost of the vehicle and not just the monthly payment. Many first time car buyers make the mistake of thinking the monthly payment is all they will be responsible for each month. The truth is, you will also be responsible for paying gas, insurance, scheduled maintenance costs, and repairs on the vehicle. Even if you can afford the monthly payment on a luxury vehicle, you need to factor in auxiliary costs for maintaining that vehicle to truly determine if it’s within your budget.
