Buying a car is a huge financial commitment, so you want to make sure you know exactly what you are getting. Unfortunately, a lot of people make mistakes when they shop for new and pre-owned vehicles. The next time you visit a dealership, make sure you avoid these three common car-buying mistakes. Doing so will help you pick a car that really meets your needs.
Not Making the Most of Their Test Drives
The test drive is your chance to really experience a vehicle. All the research in the world can’t compare to half an hour behind the wheel.
Unfortunately, a lot of people don’t seem to know how to test drive vehicles. When you take your next test drive, make sure you:
- Drive the car in a variety of environments, including winding roads and Interstates like I-26
- Focus on performance and comfort instead of worrying too much about fancy gadgets
- Pay attention to how much road noise you can hear in the cabin
- Take notes so you can compare vehicles objectively
- Give yourself at least one day to make a decision
Focusing too Much on Monthly Payment Amounts
Buyers obviously need to choose vehicles that they can afford. In most cases, the dealership will try to make cars affordable for you by giving you several payment options. Just because you get an inexpensive monthly payment, however, doesn’t mean that you are getting a better deal on the car.
Long-term loans usually have higher interest rates than short-term options. Even if you get the same rate, spreading payments out over a longer period means that you will pay more interest.
If you use a 36-month loan with a three percent interest rate to borrow $15,000, you will repay a total $15,703.92. If you get the same interest rate on a 60-month loan, then you will pay $467.88 more.
Make sure you pay attention to the total amount so you can get the best overall deal.
Forgetting to Think About Cost of Ownership
Just because a car’s price fits your budget doesn’t mean that it is an affordable option for you. The cost of owning a car is much higher than the sticker price. Over the lifetime of the car, you will spend money on:
- Repair parts
- Maintenance services
- Insurance
- Fuel
- Taxes
This makes it important for you to consider how these costs will affect the vehicle’s affordability. You may find that you need to focus on cars that cost less.
You can use a cost to own calculator to get a rough estimate of how much you will really spend on the vehicle. Of course, if the monthly payment barely fits your budget, you should already know that it isn’t a good option for you. By the time you finish paying other expenses, it will become too expensive.
Finding the right car requires some effort, but you need to take steps that will help you choose an option that truly matches your needs. By following these three tips, you are already ahead of most buyers.
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