Driving a brand-new car can be one of the great experiences of life. Walking into a dealership and buying one, on the other hand, ranks up there with public speaking and visits to the dentist atop most people’s lists of anxiety-inducing prospects. But it’s not really that scary if you’re prepared and knowledgeable. Then you can stride into that dealership informed, confident, and in charge of the whole process. We’ll help give you that confidence by steering you clear of these mistakes people often make when they set out to buy a new car.
Know What You’re After
Shopping for a car isn’t like looking for a new pair of shoes or even a smartphone. Rookie car buyers enter the dealership with only vague notions that they need a new set of wheels and how much they can pay per month. They’re ripe marks for a sales pitch that sees many people driving away in a new car from the first dealership they visit. The showroom floor isn’t the place to start your quest for a new car. Smart shoppers start with hours of online research at sites where you can learn what’s available, compare costs and features, and read expert reviews and road tests, and estimate financing costs. Most dealerships have internet sales departments that allow cross-shopping to compare what’s available and even negotiate prices before ever setting foot in their parking lot.
Find the Vehicle That Best Suits Your Needs
“The biggest mistake customers make is not correctly determining what vehicle will best suit their requirements and their wishes,” said Don Fuller, a former dealership sales trainer who is an expert on lemon law. “This does not mean every vehicle purchase has to be a basic trim-level minivan with brown paint and the low-end sound system.” For that matter, a Ferrari could be a reasonable purchase if it fits what the customer wants and can pay, Fuller said. “But too many people do a really lousy job of making that accurate determination in the first place,” he said. If you start by putting your sights on the wrong vehicle, you will likely end up dissatisfied. If the vehicle won’t comfortably accommodate all your family members, if it doesn’t have key equipment you want (for example, smartphone connectivity and adaptive cruise control), and/or if buying it threatens to stretch your budget to the limit, it is the wrong vehicle.
Come Up With a Monthly Payment Budget
Buyers should know how much they can budget monthly, but resist the temptation to make that the basis of the negotiation and especially don’t share that number with the sales staff. Instead, negotiate the actual sales price of the new car first, independent of down payment, trade-in, and financing arrangements. Handy online calculators and phone apps will convert loan balance, term, and interest rate into a monthly payment for you. A dealer who knows you’ll buy at a certain payment may offer tempting lease or financing deals with payments stretched out over a longer term, but you’ll end up paying more overall. We’re assuming a purchase here; there are arguments for leasing, but that’s something you should research and decide about before shopping, not at the dealership just to hit a monthly number.
Explore Alternatives to Dealer Financing
Sure, the ads offer rates as low as zero percent, but the fine print says that’s only for those with a top credit score, for a few months, with a certain amount down. Better to shop your financing separately. See your bank or credit union first and, if possible, get preapproval on a car loan. Then you have something to compare against the dealer’s financing options. Sometimes, the dealer really can make you a better offer, but there’s no way to know that—or make it a negotiating point—if you don’t have a comparable financing offer.
Factor in the Price of Insurance
Many a buyer has struck a great deal that fits a carefully considered monthly budget only to find that new ride costs a lot more to insure than anticipated. Especially if you haven’t been driving new for some time, remember that the loan terms will require full-collision coverage to protect the lender. Check the rate on the cars you’re shopping for with your insurer and competitors before going to dealerships. Perhaps you can save by choosing the smaller engine or a lower trim level or a competitive car that costs less to insure.
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