5 Common Car-Buying Mistakes
Almost just as important as buying a home, buying a car is one of the most important financial decisions you’ll make. We understand that the path towards purchasing a car can be confusing with all of the different cars to choose from and the variety of financial options now available. To make your car-buying journey as seamless as possible, here are 5 common car-buying mistakes you should avoid.
- Shopping for a car before you look at your credit.
Probably one of the biggest mistakes someone on the market could make is shopping around before looking at their credit. Your current credit score can make a huge difference between whether or not you are approved for a car loan. In addition, your credit score will be a determining factor on what kind of rates and terms banks and credit unions will be able to offer you. Check your credit before you buy to make sure you are in a good place to get a good rate for a loan. If your score is looking on the lower end of the spectrum, take some time to put work towards fixing your credit before deciding on a car.
- Not looking for car financing.
Without a car loan from a bank or credit union, the only option for car financing is through the dealership you plan on purchasing a car from. Dealership financing is usually higher and costlier than a loan from somewhere else, so it’s important to compare other options first.
- Not doing enough research.
It’s hard to buy a car with the large variety of car models and features you have to choose from. Before you decide on a vehicle, make sure that you’ve done all the research you need to guarantee that it’s the right one for you. There are a plethora of sources online that allow you to research a car you’re interested in—from customer reviews and ratings, sites that explore a car’s unique features, and even sites that list the car’s price and value.
- Thinking in terms of monthly payments instead of price.
Many car dealers and advertisements try to push you a car in terms of its monthly cost rather than its overall price. This can often be misleading because the monthly cost they calculate is based on a long-term loan—typically 72 months. While a low-costing, monthly payment may seem cheaper, consider the additional amount of interest you would be paying over a longer term. You may just find that it’s actually more expensive to purchase a car at a lower monthly cost.
- Purchasing additional car features.
Some dealerships offer add-ons to the car to play to the car shopper’s preference of style. These add-on features range from window tinting to leather seats. While it may seem tempting, these add-ons can actually add-on expenses and are usually overpriced anyway. In fact, it has been shown that these additional features rarely add any more value to your car.