Thinking about buying your very first car? Driving your own sedan or SUV down the road might be one of the most exciting things you’d ever do, but before you even hand over your hard-earned money to the car dealer, here are some helpful tips for avoiding potentially costly car-buying mistakes.
Brand New Vs. Secondhand Cars
Owning a flashy, brand-new automobile always feels blissful and euphoric. But the moment you drive your baby down the road for the very first time, you immediately lose about 20% of its value or an equivalent price ranging from $3,000 to $7,000, depending on the make and model. So how do you skip the steep drop? It’s as simple as buying a used car for sale, but at the same time, making sure it comes from a reliable dealer or previous owner. But how do you even make sure of that? Here’s the second tip.
Do Your Homework: Research
Now, when you set your eyes on your potentially favorite choice of used car, do your research before you even buy it. First, ask the dealer if you can test-drive it, and check each part and component, starting from the exterior, then to the interior, and then the engine section. Or, better yet, obtain the vehicle identification number (VIN) and look it up through an online company like Carfax or PPSR. A quick check can give you lots of information such as whether the car was stolen, was written off or is still tied to financial encumbrances.
When Paying Loans, Do the Math
When buying more expensive cars, keep in mind that interest rates are higher especially for longer payment terms. For example, you may be facing about the same monthly payment when paying for a $25,000 car for five years as when paying a $16,000 vehicle for three years. But the one with the higher price tag carries the most interest. So, make sure you do the math clearly, or thoroughly ask the salesperson about which option is the most financially sound for you.
Add-ons such as car alarm systems, window tints, chrome wheels, undercoating and leather seats might come with hefty price tags if they’re offered by your dealer. Unfortunately, many owners still fall for these unnecessarily expensive features, when proper research could lead you to better deals elsewhere in the first place. And, depending on the particular additional feature, you could possibly hurt your car’s resale value especially if the dealer’s offers include major modifications from the original design of the vehicle.
The Bottom Line
All these tips lead you to saving yourself from possibly and hundreds or even thousands dollars worth of costly mistakes. After all, spending for a car does not mean subjecting yourself to further unnecessary expenses. It’s about enjoying the automobile you deserve in the first place, nothing else.