Buying a car is hard. There’s a lot of ink wasted on “car buying tips” and advice, but I’m going to flip that standard advice and tell you what I’ve seen in my years of experience as a dealerships salesperson and manager.
Here are five mistakes that people often make, and you can rest assured these mistakes are expensive.
1. Failing to Think Critically About Wants and Needs
I can’t tell you how many times I’ve met a couple thinking about a giant SUV so they can “haul the in-laws around,” despite the fact that
- The in-laws don’t come to town very often and
- Renting a giant SUV when the in-laws visit is wayyyy cheaper than buying one
Same goes for buying a big truck to move a rarely used boat, buying a convertible or sports coupe when you actually need a family vehicle, etc. etc.
The best way to keep from making this mistake is to grab a sheet of paper, draw a line down the middle, and then write “wants” on one side of that line and “needs” on the other. Having enough room to take the kids to school every day (or to soccer practice once a week)? That’s a need. Having enough room to haul extended family around when they visit your home every other year? That’s probably a want.
Make your list keeping the following facts in mind:
- Renting a big vehicle for occasional use is very affordable compared to buying and driving a big vehicle every day
- Trucks can often be rented (or borrowed) if they’re only needed for occasional hauling and towing
- Convertibles and sporty coupes can be rented at just about any airport in the US and Canada – a weekend with one of these cars is often a much better investment than buying one
- Luxury features are all fine and good, but they come at a price…as enjoyable as a heated steering wheel or panoramic sunroof may be, the money spent could go towards paying off debts, savings, or even a nice vacation
Car buyers who know what they actually need often save thousands of dollars over those who buy whatever they want without thinking.
2. Failing to Consider Every Option
In my years in the car business, I met countless people who refused to consider all options. Some refused to buy a certain brand of car because of a personal bias (eg “I don’t buy Fords no matter what,” or “I can’t drive a foreign car,”), others refused to consider buying a used vehicle, refused to own a vehicle that had a red exterior, etc. etc.
While I can appreciate personal preferences, they are often arbitrary. What’s worse is that they often lead to bad decisions, as people will overlook a vehicle (or type of vehicle) that’s nearly perfect for them and buy a vehicle that’s not a good fit.
In other words, test drive a minivan, don’t rule out a brand of car without cause, and don’t ignore a good deal on a car just because you don’t like the color.
3. Failing to Price Compare
When it’s time to buy a car, it’s critical to compare offers at numerous dealerships. This may seem like obvious information, but some people don’t bother…at least not with every part of the transaction. Most people are good at shopping multiple dealers to get the best vehicle price, but aren’t as thorough when it comes to getting trade valuations, financing quotes, pricing on accessories, etc.
- If you’re buying new, you want to check on incentives and financing options at multiple dealers, in addition to asking for the dealer’s best price
- If you’re buying used, it’s a very good idea to study used car values on eBay, Craigslist, and AutoTrader, in addition to value estimations from KBB.com before you buy
- If you’re trading, you’ll want to do the same as above for your trade-in – study the market closely, as trade-in value estimates are just that (estimates)
- If you’re going to buy an extended service contract, GAP insurance, remote start, or any other “extra,” be sure to get multiple quotes on that as well
4. Failing To Do Basic Math
Here’s a simple trick that every car buyer should use:
- Ask every dealer for a monthly payment quote in addition to a quote for the vehicle’s asking price, trade-in value, etc.
- Take the monthly payment, multiply it by the term, and then write down this figure. This is the total cost of the vehicle including taxes, fees, etc.
- In addition to comparing offers based on asking price and trade-in value, compare total costs as well
This is an important step, as dealers often “pack” payments with extra fees and/or fail to disclose the calculated interest rate. If you do this simple math, you’ll be able to spot dealers that aren’t being 100% truthful about their payment quote.
5. Thinking With Your Heart Instead of Your Brain
It’s easy to get tempted by a car (at least for me), and that means you’ve got to have your guard up when it’s time to buy. You don’t want to get “sucked in” by a shiny car you can’t afford (or don’t need), as you could come to regret your purchase.
For this reason, it’s always a good idea to sleep on a purchase AND to get the opinion of a trusted friend or family member before you buy. Everyone (even hardened professionals like myself) can convince themselves to buy a car they shouldn’t, so be careful. 🙂