What Should I Watch Out for When Buying a New Car?
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New car models have hit the showroom floor, your current vehicle’s transmission just died, or your family expanded and it’s time to get a minivan.
Whatever your reason for buying a new car, you’re hesitant about jumping into the whole vehicle shopping experience.
You’re not alone.
According to a 2016 study by Beepi Consumer Automotive Index, 87% of Americans dislike something about shopping at a car dealership.
Maybe it’s because 61% felt being taken advantage of while there.
For example, more than 6 in 10 millennial women felt pressure to make a fast car buying decision. And almost half felt they were being upsold on features not needed.
Millennial men shared similar experiences when buying a new car but in fewer numbers.
To lower your anxiety about going to car dealerships and to help make the vehicle shopping experience better, here are six things to look out for and some important tips to remember before you make a deal on your next new car.
What to Watch Out for When Buying a New Car
1. Another Buyer Wants this Car
Car salespeople will often use this excuse to rush you into a purchase. You’ve found the car of your dreams with all of the bells and whistles you want for the right price. But, you want to sleep on it.
Auto salespeople want to close a deal without you leaving the dealership.
So, they will often tell you, “Another buyer is interested in purchasing this car,” or “We’re looking to ship this vehicle to another dealership for a buyer who wants to buy it there.”
This is an old sales tactic and one that you shouldn’t believe. If you want time to think about buying a new car, take the time to think.
Remember, this is a significant purchase and you may spend the next four or five years paying for this vehicle. That means you get to decide on your timeline. A 24-hour delay won’t hurt and can often help.
Additionally, you can likely go to another dealership to find the same car or a similar one. Or they can have one shipped to the dealership – just like they claim to do for other buyers.
Tip: Don’t fall in love with one specific car. Know what kind of car you want and the features you need – along with the final price you can afford. This keeps your options open!
2. Let Me Tell You How Great It Is
Buying a new car is the same as buying a new product from a store. But just because it’s an expensive product, it doesn't mean you have to allow someone to talk down to you or trick you in the process.
Whether it’s the amount of horsepower the car has, its ability to self-park, or the media features of a vehicle; there are plenty of different methods you can use to find out all the information you need.
Does a friend or a co-worker drive the same car model? Have you researched the dealer’s website or the car manufacturer’s website? You should know and understand the available vehicle options.
Ask a salesperson all of your questions; however, you can – and probably should – use car websites like Edmunds or Autotrader to research before stepping foot in a dealership.
Tip: Do your homework before going to a dealership when buying a new car. The salesperson can share information and help answer questions. But without knowing anything going in you're likely opening yourself up to experience a strong sales pitch, upsell, and higher price.
3. The Details in the Fine Print
Between the extended warranties, floor mat purchases, and deciding whether you want tinted windows, there are additional details to work out with the dealership once you agree to buy a new car.
These are often handled in the dealership’s finance department. This next salesperson’s job is to ensure you spend more money.
And the additional product sales closed in the finance department are often how dealerships make their most significant profit in new car purchasing transactions. But, don’t be fooled.
Hopefully, you’ve been diligent in your new car buying process thus far and it's important to keep the focus, as this is where one slip-up can cost you hundreds if not thousands of additional dollars.
Pay attention to the details and remember the things you discussed at the beginning of your purchasing experience with the original salesperson.
These things may or may not get carried over into this separate conversation, so you need to stay sharp and address any inconsistencies.
Tip: This is not a time to simply check boxes and sign your name. Remember you have a budget and before you even go to a dealer, research how much the “extras” at the end of a deal cost and take those into account before you ever test drive a car.
4. Your Trade-In Needs Some Repairs
Trading in your old vehicle adds one extra layer to the car buying process.
First, realize this is a separate process from purchasing your new vehicle. You're trading in your car, which requires you to reach an agreeable price for it.
Then you decide on a price for your new car purchase.
Having your current vehicle inspected by a trusted mechanic for maintenance and other issues before going to the dealership is a smart move.
This will arm you with valuable information on your car, saving you time and potentially hundreds of dollars or more when negotiating a price for your trade-in vehicle.
Tip: If you are serious about buying a new car and you'll be trading in your old car, you might not want to spend any more money on your old car. But, if it has any real value, spending money to have it looked at by a trusted mechanic not associated with the dealership matters. Before the dealership has a chance to describe all of the issues they've found with your car, you’ll already have a respected opinion. With these two different opinions, you're better equipped to decide on moving forward with the new purchase or visiting another dealership.
5. Consider the Full Price, not Only Monthly Payments
You might believe it's easier to think of your car purchase in terms of monthly payments instead of the full out-the-door price. But, it’s not.
This is another time where your research and determining a clear budget before you get to the dealership matters.
When people think with their emotions, it’s easy to persuade them to make decisions in small chunks – like a monthly payment.
What’s $40 or $50 more a month going to hurt?
Well, that’s hundreds of dollars each year and thousands over the course of a typical car loan. It's important to understand your total new car purchase price.
Tip: Consider the larger picture – the overall price. They won’t finalize this until you head to the financing department, so be sure you know what your limits are and stick to them – even if you have to pass on the deal.
6. This Year’s Model is Much Better Than Last Year's
There’s a particular draw to owning the latest, and newest, car. However, salespeople often try selling the newer vehicle when last year’s model has comparable features.
While cars typically receive an overhaul every few years – body modifications or new features added – year-to-year there may be few significant changes.
Researching your preferred model online before heading to the dealership to buy your new car allows you to easily compare different years' models so you can see and understand the differences.
Tip: Don’t let the model year fool you. If the features of last year’s model meet your needs and your budget, you’d have to have an excellent reason to pay a lot more to get the newest model.
Creating a Better Experience Buying a Car
The car buying experience for women has generally been more challenging and frustrating than it has been for most men over the years.
And even though it should be a gender-neutral transaction, it still isn’t treated that way by some salespeople.
According to Edmunds, “Women either buy or influence the purchase of 85 percent of all new cars and trucks sold in the United States today.”
It’s important for dealerships and their employees to treat every customer fairly and equally to change the attitudes expressed by their customers.
Consumers need to do their part as well. To create the best experience for buying a new car, become informed by:
- having an idea of what you truly need in a new car
- understanding the value of your current vehicle
- researching new car invoice prices
- setting a budget
- knowing your credit score
- understanding your financing options before going car shopping
- checking for manufacturer's rebates
- obtaining quotes from several dealerships
There are many tactics salespeople use on car shoppers.
However, if you are an informed buyer who uses all of the tips and tools at your disposal, you should walk away feeling like you've been treated fairly and received a fair deal.
Article written collaboratively with Jamye Spiller, a freelance writer who writes about personal finance, higher education, health and wellness, and travel. She can usually be found playing with her pup or trying out new Paleo recipes from Pinterest.