Header Ads

15 Common but costly mistakes people make when buying a car.

A file photo of a car bazaar in Kenya. 
A 2014 survey by AutoTrader revealed that about 70% of new car buyers have experienced regret after completing their purchase. Very many car buyers walk into a dealer and buy a new car without researching the car buying process. 

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.


8. Making an offer to the seller.

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)

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:

Powered by Blogger.