4 Financial Pitfalls You Can Avoid When Buying Your Next Car

4 Financial Pitfalls You Can Avoid When Buying Your Next Car
  • Opening Intro -

    Driving around in a shiny, new car that turns heads everywhere you go can make you feel great.

    However, for may auto buyers, this pleasure is outweighed by feelings of regret after recently buying a new vehicle.

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It is unfortunately common for people to feel scammed or duped by the car buying process in many ways, and some may lose thousands of dollars from various factors. The last thing you want is to lose money because you made bad financial decisions with your new car purchase. Watch out for these common financial pitfalls to avoid paying more than necessary on your next vehicle.

Not Getting a Good Deal on Your Trade-In

Trading in your current car to the dealership is a convenient way to get cash for your vehicle. However, many people accept a trade-in value that is lower than they could receive. They do not negotiate with the dealer on this point. In some cases, they could even get more money if they try to sell the car directly to a buyer on their own. Always research your vehicle’s current value online, and consider getting multiple trade-in offers from various dealerships if you do not want to sell the vehicle yourself.

Paying Too Much for Your New Car

Negotiating on a vehicle’s sales price may not sound fun, but it can save you a tremendous amount of money. A smart idea is to compare sales prices of the model you are interested in at different dealerships in your area before visiting them in person. Some auto buyers will even begin the price negotiation process over email or over the phone. This places less pressure on you to make an instant or hasty decision.

When you work with a local dealership that has a good reputation, you can generally expect to get a fair deal on your new vehicle’s sales price. However, always be willing to walk away from a deal, and never feel pressured to sign off on an offer on the spot.

Buying the Latest Model Year Available

You may not realize it, but even new models can depreciate in value before you drive them off of the lot. In many cases, you will find the most recent model year as well as new versions of last year’s model on the dealerships lot. The older model likely has already depreciated substantially because the newer model is available.

You can get a great deal on a new car if you look at these older vehicles. However, always ensure that you negotiate a fair deal so that you are not paying more than necessary for a car that has already depreciated in value.

Being Charged a High Interest Rate on Your Loan

It is common for buyers to get financing for their purchase through the dealership. Some dealership deals are amazing, but there are some financing representatives who will try to get you into a higher interest rate loan with more fees. It is wise to shop around for auto financing before you visit a dealership.

To find places to shop around, just do a localized google search like “st george kia dealership” and check their inventory if you can. Take the preapproval letter for the best deal you can find with you, and ask the dealership’s financing department to beat the offer you found. If they cannot, you can always use the great financing offer you found through your own effort.

There are unfortunately many different ways for you to lose money on a vehicle purchase, and some buyers lose thousands of dollars or more by being impacted by multiple steps in the process. As you prepare to buy your next vehicle, focus your attention on these points to ensure that you get the best deal possible on your purchase.

Consumer Tips reference:

auto financing guide

 
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