The automobile is one of the greatest inventions, and for most of us, it is a necessity. It is what we use to take our kids to school, for commuting to work, and to run errands on a daily basis. Because cars are such an essential aspect of our lives, we want to buy a vehicle that is comfortable, reliable, and somewhat stylish. There are endless choices available, and the notoriously aggressive car salesmen only make the purchasing process that much more challenging. That is why we have gathered five biggest mistakes you should avoid when purchasing a car.
1. Buying new instead of used vehicles
A vehicle’s value depreciates quickly. Expect your car’s value to continue decreasing from the moment you take on ownership. A new car takes its biggest depreciation in the first two to three years. This means you are basically throwing away thousands of dollars. Financially, it doesn’t make much sense to purchase a new car unless you have tons of money you don’t mind money being sucked out of your wallet.
Additionally, new models undergo engine switches or altered designs as the company gathers information regarding any issues and defects – this helps improve future cars to make them more reliable. Try not to purchase a vehicle that has just been released. The best age for a used car is one that is no more than three years old.
2. Not taking hidden costs into account
Most people overlook unknown long-term maintenance and insurance costs that comes with a car. It’s crucial to consider all hidden costs and gauge whether that specific car you’ve been eyeing fits your budget to ensure the vehicle you choose provides a maximum value at the minimum cost. You need to be prepared for added costs and not just the agreeable monthly payment or a big rebate. The other costs for owning a new car include:
- State licensing fees
- Maintenance and repair costs
- Tax credits, if any
- Predictive vehicle depreciation
- State and local tax rates
- Financing charges, if any
- Insurance premiums
3. Selecting the wrong car
A study conducted by the American Consumer Satisfaction Index (ACSI) showed that 30% of the 300,000 car buyers surveyed are unhappy with their purchase. So prevent yourself from making the same mistake, next time before you buy a car, make sure to consider:
- How much do you drive? Even though fuel prices are at reasonable levels, always consider gas mileage. Consider how much you drive and do the math. Would it be more realistic to buy a car that gets only 30 MPG but has more features or a more basic automobile that gets 35 MPG?
- What are the must-have features? The amount of gadgets and buttons available on modern cars is absolutely incredible but also overwhelming. Ask yourself, what do you truly need?
- What you need the car for? Try to predict how many passengers or how much gear space you need to account for. Are you a parent or are you solo? Is a minivan more suitable or will a smaller car be more suitable to your lifestyle?
4. Not considering resale value
One day, you will probably want to sell your car. That’s why it’s necessary to factor in some critical features.
Brand – Some brands are less popular among driver and others are in high demand. Honda, Toyota, Hyundai, and Subaru are known for retaining higher resale values while Mercedes, Acura, Lexus, Infiniti, and Audi are best regarding luxury brands.
Performance parts – Is the car you intend to buy tricked out with the best and latest equipment? Always take into account the vehicle’s engine and specification.
Paint color – The condition of the exterior is crucial to the value. Consider the color as it’s easier to resell a black, silver, or white car than ones with bright colors.
5. Not thinking about the monthly payment
Knowing the car’s monthly payment in advance is an essential step toward keeping your budget under control. Frequently, people are confused about how the monthly fee is structured. The monthly payment is determined by:
- Your credit history and credit score
- The down payment
- The number of months the car loan will run
A mix of these three factors determines your final monthly payment. A dealer can lower the price by adjusting the interest on the interest rate, restructure the number of monthly financing to fit into your budget, or offer a longer loan term.
Purchasing a car doesn’t have to be a confusing experience. Always get online pricing and competing dealer quotes before deciding. Remember to negotiate for the best interest rate you can and put as much down payment as you can.
Do not be in a rush to purchase a car because you might regret a premature decision in the long run.
Best of luck finding the right car for you!