Buying your first car is an exciting time in anyone’s life. It’s hard to compare the feeling of being handed the keys to your new car and then driving down the road for the first time as the owner. Although buying your first car can be a thrilling experience, it’s easy to make costly mistakes if you aren’t careful.
Sometimes it’s okay to learn from our mistakes. It’s how we increase in wisdom and discover how to do things better the next time. But mistakes made when buying a car can be very expensive.
The following are several common mistakes that many first-time car buyers make. Buying a car the smart way isn’t difficult, but it does require some research to get the best possible deal.
Not Researching Brand Reliability
Not all car companies make vehicles with the same degree of reliability. Some brands are better than others.
If you buy a vehicle made from a company with a reputation for poor build quality, you may end up spending a lot of money on repairs after the warranty period has ended. Brands that are known for their quality and reliability, however, will need fewer repairs and will last longer.
Before you visit car dealerships and test drive vehicles, it’s a smart idea to research all of the different brands to see which ones are the best. Check out consumer publications and read reviews. And if there’s a brand that you are considering, be sure to talk to several people who own cars made by that company to see if they have been happy with them.
Underestimating the Total Cost of Ownership
When purchasing their first cars, many people only focus on the price of the vehicle. The total cost of ownership is not considered. This is a mistake because some cars are more affordable to own.
Some vehicles get better gas mileage than others, for example. Insurance is another factor that is oftentimes overlooked. Powerful sports cars are much more expensive to insure than economy cars. And certain brands are pricier to repair.
Before you purchase a car, it’s important to find out the true cost of ownership. Be sure to get quotes from various insurance companies. Understand the vehicle’s gas mileage. And don’t forget to find out if parts and repairs are accessible and affordable.
Not Having a Mechanic Check Out a Used Car
While many people find great deals on low-mileage late-model used cars, they often make the mistake of buying one without first having it checked out by a mechanic. Although a vehicle may look and ride great at first, there may be an underlying mechanical problem that could result in an expensive repair later on.
Having an experienced mechanic check out a used car you are considering may save you a lot of money if a problem is discovered. And, it’s not expensive to have a car inspected. Spending a little money upfront is a better alternative to spending a lot of money on future repairs.
Buying Dealer Extras
Many dealers will try very hard to sell you extras that you don’t need like fabric protection, rustproofing, special paint protection, and other things. These are high-profit items for the dealers but are usually a waste of money for buyers. Most modern vehicle frames, for example, come with great rustproofing from the factory.
You can save a lot of money when buying a car by skipping all of the dealer extras. Some of these are things that you can do yourself, like treat your interior, as well as other items for a fraction of the dealer cost.
Not Considering Financing Options
When many people buy cars, they go through the dealers to finance them. They don’t even consider other financing options. This is a mistake that could result in you paying a lot more in interest.
The smartest way to buy a car is to consider your financing options before you visit any dealerships. Your credit union may offer you a much better interest rate than what a car dealership offers.
A credit union may also offer a first-time buyer auto loan that you may qualify for, such as the one offered by Foothill Credit Union. These loans are designed for young members who may have difficulty obtaining auto loans due to limited credit histories.
Not Considering Used Cars
Another mistake that many first-time car buyers make is only considering new cars. By not shopping the used market, you may end up paying thousands more just to have the new car smell.
New cars depreciate very rapidly. They typically lose about 20% of their value in the first year of ownership and continue to depreciate at a rate of about 10% per year for the next four years. A new car can easily lose half of its value in the first five years of ownership.
You might save when buying your first car by purchasing a used low-mileage model instead of a new one. If you buy a quality brand and have it inspected by a mechanic first, you may be able to find a car that has many years of useful life remaining for a fraction of the cost of buying new.
Buying a Car You Can’t Afford
Lastly, many first-time car buyers make the mistake of buying vehicles that are outside of their budgets. This sometimes happens when a buyer becomes emotionally attached to a car and doesn’t consider whether the monthly payments are affordable.
It’s always a wise idea to make sure that any car you are considering is one you can afford. This may mean buying a more affordable car than the one you are currently considering. It may also mean postponing buying until you can save up a higher down payment.
The Smartest Way to Buy a Car
If you are a first-time car buyer, it’s best to take your time when choosing a car and not let your emotions control your decision. Cars are major purchases, and it’s easy to spend a lot more than necessary if you don’t take the time to research your options before making an offer.
Also, be sure to consider financing options other than what the dealers offer to make sure you get the best interest rate possible. Foothill Credit Union’s auto loan, for example, offers a great rate without prepayment penalties. The application process is fast and easy and everything can be done online.