15 Common but costly mistakes people make when buying a car.
 |
| A file photo of a car bazaar in Kenya. |
The following are some of the common mistakes people make when buying a car;-
1. Buying a car on
impulse.
Car buying can be fun
and exciting and at times you want to be like someone else who you saw driving
a particular car model. With such a large purchase, it’s essential that you
make a decision with a level head. If you feel overly eager to get out your
checkbook and drive away in the floor model, it’s probably best to leave the
dealership and come back another day.
If you walk into a
dealership and let the salesperson educate you, you will get taken for a ride.
It's just that simple. Do your homework. Research the price of the vehicle and
understand the sticker price, the invoice price, the holdback; know your credit
scores/credit history, shop around for financing, insurance, an extended
warranty, and most importantly have several dealers compete for your
business!
2. Buying under pressure.
You may hear that a car
is ‘the deal of a lifetime’ that happens to only be good on that particular
day. But shopping for, buying and driving away with a car in just a few hours
is unwise. After all, this is a major purchase that can affect you financially
for years to come, so you have the right to sleep on it.
When you express
hesitation, you may well get a better offer later on. If you get too much
pressure to buy the car that very day, it may be best to walk away.
3. Not deciding what car you can afford.
Whether it’s your first
time buying a car or your fiftieth, always begin the car buying
process a budget. Before you even walk into the dealership, you should
examine your budget with a fine-toothed comb. Find out exactly how much you can
afford to spend on a vehicle payment, warranties and extras, insurance (including
gap insurance), and your max budget for the total price of the vehicle. The
worst thing you can do is base your vehicle’s price and payment amount on the
advice of the dealership, and what they will approve you for.
Consider how much you
can afford before what kind of car you want. From a financial point of view,
the less you spend on a car, the more money you have left over for everything
else.
In most cases, vehicles
are never an investment. It is an emotional thrill to buy a new car, but a used
car is a far better value. If you do decide to buy used car, remember that
a good car salesman will steer you towards the most expensive options. Know
your number first so you don’t overspend later.
4. Focusing too much on price.
The price we pay for a
car is only one element of buying a new car, and arguably the largest.
When we buy a car, we ask ourselves: “Did I get a good deal for the specific
year, make, and model I purchased?”
More important than
price is whether you are getting the right car for your needs and not buying
more car than you can afford. It will likely save you far more than you can
haggle off a new car sticker price. But if you are on the fence, remember:
Everybody drives a used car!
5. Arriving to the
dealer clueless.
There’s no excuse for
showing up at a dealership with a target on your back. By the time you start
cruising showrooms, you should have considerably narrowed down your list of
options so you have a good idea of one or two models you are interested in, the
available features that you actually want and what you can expect to pay.
Otherwise, it will be too easy for sales staff to pressure you into a car you
don’t want, with features you don’t need at a higher price than you should pay.
NEVER negotiate the
vehicle price, financing, and a trade-in all at one time. Do your research
ahead of time, know what the competitive price for the vehicle is, know what
your current vehicle is worth, and shop around for a low interest rate. This is
the only way to know whether you are getting the best deal for all factors.
6. Falling in love with the car before you buy it.
Though car dealers are
rarely the questionable characters portrayed in most movies or TV shows, car
sales is just that: sales. So, if you fall in love with a car before you buy it
-- and if you show the salesperson that you have fallen in love with the car –
you are unlikely to get the best possible deal.
While it might be hard,
try to contain your excitement for a car until you have agreed on a price. Then
you can be as joyful as you would like. But until then, remember that keeping
cool will help you when it comes time to negotiate.
7. Assuming dealers are
automatically better.
While you probably
shouldn’t buy a car off of somebody you just met on the street, there’s no
reason to rule out buying from a private seller. It’s true, dealers have the
benefit of a selection of used cars and the added bonus of being able to
offer financing, but their cars aren’t any better than what you would find
from a private seller.
Actually, if you are
looking to pay less for a used car, you will probably get a better deal by
working with a private seller. Dealers buy cars to make a profit off them,
therefore they need to sell the vehicle for more than they bought it for. A
private seller often isn’t looking to make a profit—they just want to get a
fair market price for what they have.
 |
This auto buying mistake
is one of the more expensive mistakes that people make when buying a car.
A common way for
salespeople to get negotiating started is to ask you what you can afford.
Sounds fair enough - right? Wrong. If you "offer" up the payment that
you can afford, you have given them your bottom line and they no longer have to
work to earn your business.
This car buying mistake
can cost you thousands of shillings especially if you haven't done your
homework and do not know what other buyers have paid for the same
vehicle.
9. Shopping at just one
dealership
When it comes to finding
a great deal, it pays to shop around. Plan on checking out at least three
different dealerships. Compare deals, and when you are ready to buy, let
the dealerships with whom you are talking know that you are keeping your
options open. This can help you secure a great price.
Also remember that it is
not just about money: You also want to choose a dealership you are comfortable
doing business with.
10. Starting initial
negotiations in person.
They say that once you are
at the dealership, the battle is practically over.
Start by emailing
sellers and local salespeople, or calling them to see what they are willing to
offer you. Do your research at home and have it ready to go before you start
typing or dialing. It is advisable to start
your negotiations over the phone and the salesperson will work that much harder
to make sure you come in. It’s much easier to walk away when the car isn’t
there, which gives you the upper hand in negotiations.
And as far as buying
from a private seller goes, you can probably use your research to even more
advantage, since you won’t be dealing with a professional. By mentioning a few
used car statistics over the phone, it’s possible to gain the upper hand prior
to seeing the car in person.
11. Failing to do a
thorough test drive.
When you are driving a
car that doesn't belong to you, it's normal to be a bit nervous. That's why the
salesperson usually directs you where to go during a test drive, which
probably involves going down some local roads and making a few right-hand
turns. But does that really give you a sense of how the car handles and how
comfortable you are driving it?
Majority of the
complaints people make about the cars they buy could have been avoided with a
good long test-drive. It is advisable to be accompanied by a mechanic you know,
love, trust, etc. and have them look at the car. If the car needs new
tires or is due for a brake replacement soon, for instance, you can use this
information to take some money off the list price.
You need to think about
how you plan to be using the car and under what conditions will your car be
subjected to in your daily usage.
The test drive also is
the time to check out visibility when backing up, how a car seat would fit into
the back, if that third row is really so easy to get in and out of. Make a
checklist of your "must-have" features and refer to it during the
drive.
12. Underestimating the total cost of ownership.
When you decide to buy a
car, your emotional Brain is already sold—it can picture itself behind the
wheel and it loves it! Your practical brain, however, is like: “Whoa, not so
fast! Is this a good deal? Is it reliable? What’s the mileage? What’s the
resale value?” etc. You should always make calculations of such things to
justify the purchase.
You may also
overestimate or underestimate the car’s fuel consumption, ongoing costs like
maintenance, insurance, and excise taxes. Consumer Reports attempts to put
some numbers on true cost of vehicle ownership. Accurate or not, you can at
least see how different models compare.
13. Poor choice of financing your car.
Deciding how to pay for
a new car is a personal choice, however, it’s always best to pay cash for a car
when you can. When you save cash to buy a car, you are less likely to overspend.
Many times, you need a
new car and need to finance. No problem. Fortunately, car loans are fairly easy
to get and come at reasonable interest rates. Before you sign, however, you
want to make sure you are getting a fair interest rate and
understand how much you’ll pay for the loan.
Many buyers go in with a
set amount they would like to pay every month, and are happy to share that
figure with the salesperson. When you do that, you are not actually talking about
the total price of the car.
You also need to take
into consideration the interest rate, as well as the length of the loan.
For instance, a dealer might suggest a longer loan so the car fits in your
budget. But a longer loan also means you pay more in interest. In the end,
you wind up overpaying for the car.
(Read also: FACTORS TO CONSIDER WHEN BUYING ANY PIECE OF LAND)
(Read also: FACTORS TO CONSIDER WHEN BUYING ANY PIECE OF LAND)
14. Not running a vehicle history report.
Unless you are buying a
new car, you should run a vehicle history report (such as a Carfax or Autocheck
report) on any vehicle you are considering. The reason? Even the most trustworthy seller might be trying to
hide an accident, flood damage, an odometer rollback or other potential issues. And even if you aren’t worried about these things, the next owner probably will
be, which could hurt you when it comes time to resell it.
A dealer should be able
to run a Carfax report for free, though you will have to pay out-of-pocket if
you are buying a car from a private seller.
15. Forgetting about the
car insurance.
Finding the car
insurance company that can offer you the most favourable rates can save
you a lot of money a year. Not only do you want to compare quotes and shop
around, you need to understand what insurance you are buying so that you don’t
pay for coverage you don’t need or get into an accident only to discover you
didn’t have the coverage you thought you did.
Most financing
agreements require you to carry full-coverage insurance, which is to protect
your lender, not you. That way, if you wreck a car that you haven’t paid off
(no matter who’s at fault), the bank will still get all of its money.
You should also get
information about how much you will be paying for this new vehicle and whether
you need gap insurance? These are questions that should be addressed with your
insurance company.
Do not let the car
dealer handle everything, but you can seek some advice about insurance
especially Carfax (vehicle history report) if buying a used car. The
dealer will pay for it, but you have to request it.
Summary…..
Buying a car doesn’t
have to be a miserable experience. Spend most of your time choosing a car you can
afford that meets your needs and you will be happy to drive. We hope reading
our list will help you avoid making any of the car shopping mistakes we've
highlighted.
No comments: