Driving with the windows
down, Kacey Musgraves blasting on the stereo, in a brand new car you
bought all by your damn self: peak life experience. But the steps that
can come before it, i.e., walking into a dealership and watching the
salesmen stream toward you like ants at a picnic? Less fun.
Buying
a car is a huge step, but it really isn't that scary if you know how to
avoid the most common mistakes first-time car buyers make. Read this
now and then stride into that dealership informed and confident.
1. Not knowing what you're after. Shopping
for a car isn't like looking for a new pair of shoes or even a
smartphone. Rookie buyers enter the dealership with only vague notions
("Need wheels; can pay maybe X per month"), which makes them easy
targets. Do research online first. Sites like Car and Driver's Buyer's Guide
help you learn what's available, compare costs and features, read
expert reviews, and estimate financing costs. Most dealerships sell cars
online, meaning you can check availability and even negotiate prices
before ever setting foot in their showroom.
2. Not taking a test drive. One
in six car buyers never drove their new car before purchase, according
to DME Automotive research. Another third took a cursory 10-minute spin
around the block in one car. Not smart. As much as you can learn from
Google, only a drive can reveal "the one." Sample competitors too; if
you've been driving an old car for a while, any new one will feel great.
If a dealer's being lame about how many cars you're testing or how
substantive of a drive you're making, walk away. Remember, cars aren't
like shoes you got on Zappos: returning a bad fit is super-expensive. Here's how to nail your test drive.
3. Negotiating from the MSRP. Careful:
It may seem like a great deal if the sales rep offers to "knock $3,000
off the sticker," but maybe not. The Manufacturer's Suggested Retail
Price (MSRP) on the window sticker is not a good starting point for the
haggling. Online guides purport to reveal the "dealer invoice" that the
dealership actually pays the manufacturer, so it's better to negotiate
up from there than down from MSRP.
4. Expecting to use 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.
5. Shopping with your monthly budget. You
should know how much you can budget monthly. The sales staff? They
should not. It's tempting to use your own personal allowance as the
basis of the negotiation, but instead, start with the actual sales price
of the car (independent of down payment, trade-in, and financing
arrangements). A dealer who knows you can do $400 a month may offer
tempting lease or financing deals with payments stretched out over a
longer term, but you'll end up paying more overall. Don't fall for it. Handy online calculators and phone apps
will convert loan balance, term, and interest rate into a monthly
payment so you can see what kind of monthly check you'd be cutting.
6. Not being prepared to walk away. The
sight of your back is your strongest negotiating tool (and not just
'cause you've been killing it on the barbell hip thrusts). If a sales
rep says, "this deal is only good today" or for 72 hours or whatever,
he's lying. Memorize this line and state it as soon as you feel
suspicious or overwhelmed: "I'm not comfortable with this. I want to
sleep on it and do a little more research." Hundred to one, the dealer
will call a day or two later with a better deal. If not, there are other
dealerships and other cars aplenty. Speaking of...
7. Shopping only one dealer. Forty
percent of buyers visit only a single dealership, research shows. But
even if three years ago you found an awesome sales rep who feels like
your spirit animal and has since joined your book club, it still pays to
look around, if only to confirm that your go-to dealer isn't taking
advantage of the relationship. If you've picked out a car make and
model, check the internet sales departments on the sites of several
nearby stores to see if there's a better price. If you find one, show it
to your beloved dealer as a bargaining chip.
8. Forgetting about insurance. Many
a buyer has struck a deal that fits a carefully considered monthly
budget — only to find that her new ride costs a lot more to insure than
she anticipated. Remember: The loan terms will require full-collision
coverage to protect the lender. Check the rate on the cars you're
shopping with your insurer and competitors before heading to
dealerships.
9. Not questioning extras at close. Sitting
down to close the deal can be exhilarating — but don't rush it. Read
carefully and be prepared to just say no over and over and over. The
dealer may try to shill stuff like fabric protection, extended
warranties, or accessories that are either unnecessary or far more
expensive than if you picked 'em up elsewhere. Also check that you're
not charged extra for things you negotiated up front with the sales rep,
like a third key fob or a full-size spare tire. Lastly, be prepared to
pay legitimate fees (like the title transfer and taxes) on the spot, in
addition to your cash down payment. Otherwise you could wind up paying
interest on those too, swelling your monthly payment.
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