Whether you need it for commuting, running errands, or seeing the sights during your retirement years, a car is a necessity for most people. This can be a significant purchase, so you want one that will tick all the boxes in terms of safety, reliability, and style. Yet as you start the search for a car it’s easy to get blindsided by the wide range of choices on the market. The following are five common buying mistakes which can take a serious bite out of your budget.
1. Only considering new cars
Because a car is often seen as a luxury item, it’s natural to want it to arrive shiny, new, and with a bow on top. However, from a financial standpoint it’s quite rare for it to be more advantageous to buy a brand new car. New cars lose thousands of dollars in value as soon as they are driven off of the lot. After only two years of ownership, a car typically loses 25%-40% of its value. By buying a car that’s two years old, someone else is taking this 40% loss. You can often look at listings sites like carsales.com.au and find the exact make and model you want, only slightly used rather than new.
2. Making an impulse buy
Buying a car can often be an emotional decision. If you’ve saved up and you have the cash to burn, there’s no reason why you should buy something sleek and sporty! However, with so much information available it would be a shame not to compare your options before buying a car, whether it’s for practical purposes or just for fun. Listings websites, online reviews, and car rankings outlets all offer impartial and free information about car features and prices.
3. Not including running costs in your budget
It’s certainly important to look at a car’s initial price tag, but there are other costs to factor into consideration. You’ll want to think about issues like fuel economy, long-term maintenance fees, and insurance costs along with the sale price. To lower insurance premiums, it’s worth looking at new Volvo cars at carsales.com.au or other models which are known for their impeccable safety ratings. Similarly, you’ll want to compare fuel efficiency of different models to factor in how much you’ll be spending at the pump over time. Although hybrids cost more initially, they often make up for this in the savings on fuel.
4. Focusing on monthly payments
Once you’re at the car dealership, it’s time to negotiate a price. Dealers are aware that most consumers won’t be able to pay for the full amount up front, and will try to offer you monthly payments at higher fees. It’s important to be aware that issues like loan structure, terms, and interest rates can all have a significant impact on the final cost of your car.
5. Getting fleeced on aftermarket add-ons
Another trick commonly employed by dealers is to try and talk you into add-ons that you may not want or need. This could include everything from window tinting to leather seats. These lead to a higher upfront cost, but may not actually add any value to the car. If you do decide you want to upgrade your car, shop around to find the lowest prices.
By avoiding these common mistakes, you could potentially save thousands of dollars on your next vehicle. This gives you greater freedom to find the right make and model to suit your needs.