10 Common Car-Buying Mistakes

Buying a car can be a perilous venture for your finances. Like other transactions that that happen only once in awhile, many shoppers are out of practice when car-buying time comes around. Couple that with the fact that you're usually talking about a big chunk of change when purchasing a car, and it just follows that the effort is full of potential disaster for your bank account.

Want to know what the most likely dangers are? Here are ten common car-buying mistakes as listed by MSN:
   
1. Falling in love with a model.

2. Skipping the test drive.

3. Negotiating down from the sticker price.

4. Focusing only on the monthly payment when negotiating.

5. Buying the "deal" instead of the vehicle.

6. Waiting until you're in the dealership to think about financing.

7. Underestimating the value of modern safety features.

8. Buying unnecessary extras.

9. Not researching the value of your current car.

10. Not having a used car checked by an independent mechanic.

My thoughts on these:

1. We always look at 2-3 similar models before we settle in on one to negotiate (after all, a Subaru Forester, Toyota RAV 4, and Honda CRV are all pretty much the same). If one dealer doesn't want to negotiate (like the Honda guy -- he never wants to come down much on price), we move on to another one.

2. You HAVE to test drive the car. You're going to be sitting in/operating this vehicle for a significant part of your life. It has to be comfortable for you and functional for your needs. (And for me, I have to make sure it has enough headroom -- which rules out lots of options.)

3. I start by knowing what the car costs them and negotiate from there. See Save on Buying a Car: Four Steps to a Bargain on Wheels for details.

4. We pay in cash, so the monthly payment is not an issue.

5. Why would anyone do this? A good deal on a car you don't like that much is a bad deal.

6. Of course, this should be thought of/worked out well in advance (and used as a negotiating tool if possible). My preferred option is to save up and pay cash for the vehicle.

7-8. These go together to me. You want features that add value to the car and you can't get elsewhere, but there's no reason to pay for upgraded car mats when you can get them at Walmart for 1/3 of the price.

9. We usually give our cars away -- either to charity or a family member (this is what we've done with the last three of them) -- so we don't need to establish trade-in value.

10. I would NEVER buy a used car without having it checked out by my mechanic first.

Lots of these seem like common sense, but I guess they trip a bunch of people up a bit. Take some time and think through each of them before you start your new-car-buying-process. They could end up saving you a bundle of money.

Comments

[Cap]

#1 & 2 definitely deserve to be mentioned first. A friend of mine fell in "love" with a particular vehicle's outer appearance.. even though it's plagued with numerous first generation problems... the friend bought the car w/o a significant test drive too, which drove me nuts as I tried to convince him otherwise. Naturally, weeks later, the friend is constantly complaining about the car and is already thinking about trading it in. Smooth.

[Brad]

#10 is wise, but is certainly no quarantee. I took a used car to my mechanic when I bought it 5 years ago, and it was given a clean bill of health. I know a little about cars and I have a very good mechanic, but if something is working at the time of the sale, well...it's just that, working. Six months later, lots of things started going wrong, the worst being the transmission. I still own the car and it runs great, though I have put alot of money into it. The point is, you can be as careful as you want, but very few used cars come with a warranty.

[Brian]

Great post! I think # 7 is important, but doesn't deserve to be on the top 10 list. People lose more money than they know about in the finance office. They buy overpriced warrantees that require all repairs and maintenance to be done at the dealership. They fail to negotiate the terms on financing. That's still great information there.

[Matt]

I don't know if I agree with not falling in love with a model. I fell in love with the model of car I drive now but instead of finding one that was an ok deal what I did is I shopped around and found one that was selling below value (I buy used). If you love a model be prepared to shop around till you get a price and financing that matches to your needs.