A Few not so Typical Car Buying Tips
I've been in the car sales industry for over 10 years now. Maintaining my dealership's website, listing our cars online, providing IT support, and even dealing with internet shoppers were just a few of the many positions I've filled. So, I have a pretty unique perspective when it comes to car sales. One thing I have noticed is there are a surprising amount of people that trade in their new vehicles within a year of purchase. Obviously, some people are financially well-off enough to buy a new car just because they want to. However, most of the time, this is not the case. In my opinion there are too many people that end up trading in new vehicles because they ended up regretting their purchase. Once you drive that new car off the lot, it's now a used car. The value depreciates, and the customer loses money. My purpose in writing these tips is to help you avoid making a purchase you'll regret.
Don't Buy a Car Online
For those of us running on a tight time schedule, the internet is a life-saver! Every car dealer advertises their inventory online, which is wonderful. Researching and locating a vehicle has never been easier. Some dealers even sell vehicles directly over the internet. That might seem like a great option, but buying a car over the internet is not like buying something on Amazon. If it's faulty or you end up not liking it, you can't just box it up and Fedex it back. Many online dealers do offer a satisfaction gaurantee or "grace period," but it's still going to be a hassle. Unless it's a rare vehicle, it's not a good idea to buy a vehicle online. Seeing the vehicle in person and buying from a local car dealer is almost always the best way to go.
Test Drive the Vehicle... Really Test Drive it
This kind of ties in to the above tip. A 5 minute drive around the block is not enough time to decide whether or not a vehicle is the right choice. You might be impressed after a ten minute test drive, but what if you regularly drive an hour at a time? You could love the test drive but end up hating the vehicle. My father is a retired upholster. He once told me "you'd be amazed at how many people bring in brand new cars asking if he could make the front seats more comfortable." Because of air bags and all of the fancy electronics in a seat, the answer is almost always a big fat NO! If by chance the answer is yes, be prepared to spend a lot of money. It's not uncommon for people to trade in vehicles less than a year old because they end up hating it. That's why a good test drive is vital! Even just sitting in the parked vehicle for 30 minutes or so will give you a good idea if it's comfortable enough. A bad back, pinched nerve, or other similar problems could be made worse by driving an uncomfortable vehicle every day.
All too often people expect an unreasonable amount for their trade-in or believe that a dealer can drop thousands off of a car's price. A lot of us self appraise our trade-in online and are very generous in describing the condition of the vehicle (forgetting about all those little dents and stains). In other words, a trade might be in great condition, but the owner believes it is in excellent condition. Another common thing is a customer seeing a similar vehicle to their trade on sale for a certain price. They end up expecting to get the same price for their trade. You're not getting retail value for your trade-in. A dealer is taking a risk in accepting your vehicle in on trade. Whereas you can sell it privately as is, dealers have to make sure the vehicle meets certain requirements. They may have to put thousands of dollars into reconditioning it, and they need to make some sort of profit by selling it. I've seen dealers LOSE BIG on a vehicle they took in on trade.
Also, it is important to note that there is a common misconception that a dealer can drop thousands off of the price of a car. This is usually untrue, especially in the case of new vehicles. In fact, new vehicles don't have a large profit margin these days... unless maybe it's an exotic or high end brand. A dealer might only have a profit margin of a grand or two on a vehicle. Considering the large overhead cost of running a dealership that's not much money. Lower profit margins, the internet, and the "Mega Mart" consumer mindset have caused the need for car dealers to sell higher quantities of vehicles to make a profit.
Read the Fine Print
People will only fall for something so many times, so advertising had to evolve. In regards to car ads, the monthly payment is the biggest factor most of us consider. There are ads all over TV and the internet boasting unbelievably low car payments on a buy or lease. Phrases like "starting at only," and "as low as," are peppered throughout these ads. The fact is most of these deals require excellent credit as well as other certain qualifications like special rebates or a large downpayment. Some examples of these special rebates/incentives could be bonus cash for trading in a competitor brand vehicle, brand loyalty, military discount, etc. These requirements are on top of the factory rebates that everyone qualifies for. Most of us will not meet all requirements, and therefore won't get the advertised price. That doesn't mean you won't get a good deal. It just means that your monthly payment will be a little higher than advertised. This is why it's important to read the fine print.
Don't Be Impulsive
Do you want a new car OR do you need a new car? For most of us, taking on a car payment is a considerable commitment. That new car or truck might look awesome in the commercial. It might be the coolest car ever, but do you actually need it? There isn't a person alive that hasn't bought something on impulse just to quickly lose enthusiasm for it. Whether you want a new car or need one, weigh your options. Don't rush it.
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