The worst advice you can get about buying a car
Are you in the market for a new car? Some people love car shopping and like to think they know all the secrets to getting the best deal. Mention that you’re even thinking about buying a car, and they’ll grab your ear for the next hour telling you about every car they’ve bought and sold over the last 20 years. Heck, they might even offer to go to the dealership with you just to show you how it’s done.
Surely they have your best interest in mind, but people are full of advice that sometimes isn’t as wise as you—or they–might think. You can be kind and let them babble all they want, but in the end, this is likely what you’ll hear:
The wealthier you look, the more you’ll pay
Many think that dressing poorly when you enter the dealership leads the salesperson to believe you don’t have a ton of money. To sell a car, they’ll need to give you a bigger discount. Not true. People come in all shapes and sizes…and grooming habits. Regardless of what you’re wearing, the dealership will ultimately run a credit report, the true picture of your financial standing and credit worthiness. Showering and dressing in your normal casual attire is your best bet. That way, no one will be afraid to get too close.
Wait until the last minute to mention your trade-in
It’s the same thing with coupons, right? You’ll jack up the price so when I pull out my discount, you’ll already have a cushion. Wrong. Why do you think some car dealerships will buy your trade-in even if you don’t buy their new car? Trade-ins make money. In fact, your trade-in, depending on popularity, supply, and demand, may be worth more than you think to the dealer. It’s also more likely that you’ll be able to afford that new car, so the dealer has incentive to offer you the best price.
If you spring your trade-in at the last minute, the salesperson will have to go back and rework all the calculations and paperwork he’s completed so far, a complete waste of time. You’ll also know what the dealer is offering for your trade-in, which will help you decide whether to accept the offer or to sell it privately. No matter what, though, be sure to check the Kelly Blue Book value, so you have a ballpark idea of a fair price.
Focus on the monthly payment, not the total price
Yikes! What kind of math is that? Just because you can afford a monthly payment, doesn’t mean it’s a wise purchase. Consider this: Your new car depreciates as soon as you drive it off the lot, but for the next 5 or 6 years, you’ll be paying the same hefty payment each month. Plan to trade it in in a year or two? You might be upside down and owe more money than it’s worth. In addition, you’ll need to consider what will change in your future finances. Will you be buying a home, raising a family, paying for college, or facing unemployment? The financial decisions you make now will impact you in years to come.
Buy it before someone else does
You’ve found your dream car. It has every upgrade you wanted, the perfect color, and it’s the only one on the lot. Grab it and run! No, wait. STOP—and come to your senses. There is more than one dealership and, chances are, there are other cars that will make you feel all warm and fuzzy inside. If not, a dealership can always factory order one. A hasty decision can have tragic financial consequences. If a salesperson uses the “buy it before it’s gone” tactic, it’s only because he’s trying to nail down a sale. Don’t fall prey. Take the time to do your research and price comparisons.
Buying a used car is taking on someone else’s headache
Who says a new car is the only way to go? It’s likely your very vocal co-worker who bought a car from Bob’s used car lot and got stuck with a lemon, or maybe it’s your Uncle Fred who bought his last car in 1975. It happens, but considering your new car loses between $3,000 and $5,000 once you drive down the road, you might want to reconsider.
Pre-owned cars are big business in today’s market, especially with the number of drivers who opt for car leases that expire after three years, on average. Other inventory may be the result of fickle car owners and their desire to have the latest and greatest features and model. There are some advantages to pre-owned cars, especially when you purchase through a reputable dealer. With limited miles and a few years under its belt, all the kinks have been worked out, and the dealership has likely put it through a 100-point check. Some may still be under the manufacturer’s original warranty.
When you’re purchasing a car, you’re in the driver’s seat. Do your homework, take your time, and don’t be pressured into something that doesn’t meet your needs or satisfies your comfort level. Everyone will give you their two cents because, well, they want to help. Take it for what it’s worth, but don’t base your decision on someone else’s experience.