Considering the expense of buying and running a car, it’s worth knowing a few of the common money mistakes many of us are prone to making. We will list a few of them in this article, so if you are on the hunt for a new motor, read what we have to say, and then make every effort to avoid the mistakes we mention.
MISTAKE #1: NOT BUDGETING BEFOREHAND
It’s easy to enter a car dealership, get swayed by the salesman’s patter, and leave the lot in a brand new (or used) motor that you can’t actually afford. This extends to the financing deal you may have accepted, as well as the running costs you will inevitably face down the line. So, to avoid being out of pocket, you need to consider your budget before purchase so you can make an informed spending decision. This way, you will have a better idea of both the type of car you can afford and the finance deal you should go for. To help you, use an affordability calculator to work out how much you can reasonably afford to pay. You can then use this information to research the cars and financing options available to you.
MISTAKE #2: BUYING AT THE WRONG TIME
Is there ever a bad time to buy a car? Considering the points we have raised thus far; the answer is obviously yes if your financial situation isn’t healthy. And this extends to your credit score. If you have been turned down on loans in the past because of your credit score, you might get turned down again when looking at finance deals.
On the other hand, you might be forced to pay more interest when purchasing a loan. Our advice is this. Firstly, do all you can to Improve your credit score before buying as you will consequently reduce the long-term expense of your car loan. Alternatively, look for a reputable dealer who will have your best interests at heart when buying a car with bad credit, and explore your options with them. Either option will get you a better deal when paying for a car.
You should also consult your calendar before heading out to buy something. Many dealers lower car prices just after Christmas, for example, as they are aware that customers will have less money to play with after their festive expenses. When new models are announced, dealers will generally reduce the cost of their existing motors to reduce stock, so keep your eye on the motoring media.
Showrooms are generally quieter in the week, so pop in on a Friday when the salesman is desperate to meet their end of week targets, as you should be able to negotiate a better price with them. And certain cars are cheaper at certain times of the year, such as Convertibles, which are more desirable over the summer, so may be discounted during the winter. When it comes to making savings then, figure out what you’re after and then time your purchase.
MISTAKE #3: BUYING THE WRONG CAR FOR YOUR CAR NEEDS
We are talking about your needs in both the short and the long-term. If you have a family, for example, or if you expect your family to grow, you need to choose the right family car that both accommodates everybody and has the necessary safety features. If you regularly take road trips, you need a car with decent fuel economy so you don’t spend a fortune on fuel during your vacation time.
And if you’re keen on protecting the environment (which we all should be), you might also consider a car with greener credentials, be that an electric or hybrid car, or a newer model that should be eco-friendly as standard when coming off the production line. So, think about what you need from a car as well as what you want from it. You might have your eye on something super-sleek, with attractive wheel trims and luxury leather seating, for example, but if you can’t get your kids in the back seat and it eats up fuel at a too-rapid pace, then you should rethink your purchase!
MISTAKE #4: BUYING A VERY CHEAP SECOND-HAND CAR
Remember the old adage: you get what you pay for. So, while you may well have found a decent car at an incredible bargain price, you might have also found a car that will cost you a lot more in the long-term. This generally applies to used cars, especially when buying from private sellers who are keen to get rid of their old junkers as soon as possible. But you need to watch out for any disreputable dealerships too, so always do your research online or by asking for dealership recommendations from friends and family.
The last thing you want is maintenance costs and breakdown fees down the line, as you may end up paying way more than the car is worth, so if you do find something with an attractive price sticker, take the appropriate steps before shaking hands and signing any contracts. Take it for an extended test drive so you can assess it for any faults, and ask a mechanic to give it the once-over too, as they may see things that your inexperienced eyes cannot. If there are any problems, continue your search elsewhere. It is generally more cost-effective to pay more on a used car, as most of the time, you are guaranteed a reliable purchase.
MISTAKE #5: NOT NEGOTIATING ON THE PRICE
Unlike other items you might buy, the sticker price on the car is only a suggestion, so the seller will expect you to haggle to bring down the price. We appreciate that not everybody has negotiation skills, but the least you can do is research similar cars online, and when you spot cheaper prices, go armed with these to persuade the seller to lower the price. There are more useful ideas here, so have a read, and implement the listed tactics to ensure you get the best deal possible on the car you are considering buying.
Don’t spend more than you need to on your next purchase. Follow our suggestions to make both short and long-term savings on your car. Many of us enjoy driving, but we will enjoy the experience better knowing that we haven’t made any money mistakes during the buying process.
Thanks for reading, and happy motoring!
Photo Credit: Copyright 2019 Angel Mosqueda / Car Fanatics Blog