Mistakes happen; it’s a natural part of life. However, some mistakes tend to hurt a little more, especially when it comes to big ticket items like vehicles. Which is why many say “you need to learn from others’ mistakes”, and we agree. To prepare you against any car dealership mishaps, here are a few common mistakes people have made and how you can avoid them.
Do the Homework
Yes, it’s true, information is power and when it comes to buying a car, the more you know the better. Firstly, figure out what car you want and whether its costs suit your budget as well as your lifestyle. Secondly, research car dealerships and find the one that most suits your needs. Thirdly, and to many most importantly, find the payment plan that best suits your needs.
Don’t Get Taken in by Salesman Schmooze
Beaming and eager to please, the car salesman’s first priority is to make a sale and that does not necessarily mean that you will be duped into buying an inferior model. They’re working in sales and like all forms of retail, simply want to close the deal. So relax, and try not to get swept up in all the sale-schmoozing. Focus on why you came there: to get the car that will suit your lifestyle needs.
Don’t Judge a Car by Its Bonnet
Buying a vehicle, which is a depreciating asset (a possession that loses its original value through regular use), should be done based on need and less on looks. So even if that polished exterior is calling your name, stay focussed and buy a car that suits your budget as well as your daily routine. Essentially a car is a tool to get you from A to B, and shouldn’t get you from 🙂 to :(. So prepare yourself by figuring out what you want and simultaneously reduce any impulse purchasing.
Judge It by the Way It Moves
Any car dealership worth its catchphrase will offer you a chance to test drive the vehicle you are interested in. Always accept the chance to do so. You need to know how it will feel driving the car and the only way to do that is to actually get behind the wheel. Driving your potential new car on the road will do two things:
1) Help avoid buyer’s remorse.
2) Will give you peace of mind that the car is indeed running properly.
Financing your car through the bank, the dealership or your wealthy aunt, who has kindly left you a small fortune is three (sadly, two) of the main options available to you. Choosing between the accredited dealer and the bank is dependent on who will have the better interest rate for you. Although most dealership financing is essentially also bank financing, the dealer is basically doing the grunt work by working with the bank on your behalf.
Now whether you choose to go with your bank’s rates or your dealership’s is entirely up to you, both parties are highly regulated through legislation and compliance standards in order to protect the client.
Car dealerships do have a slight edge though. They can sort out your finance directly with your personal bank, based on the following:
- Your deal will be given to all major banks in order to obtain the best possible rate.
- Most banks might fight for a piece of the pie, and the dealership which is doing bulk business is in a stronger position to negotiate rates with banks versus an individual.
- By law they have to offer you a range of add-on products i.e. debt insurance cover, warranties etc. and they should offer you the best product based on the service received from underwriters to their clients.
- Often a condition set by a bank for approval of a deal is the payment of an existing vehicle finance agreement of a trade-in. The dealership being an agent of the bank will take ownership of your pre-existing finance agreement.
- Most manufacturers have national joint ventures with commercial banks; which means that doing your finance through a dealership could attract additional incentives from banks through these joint ventures. These can be used as a discount, to subsidize interest rates or even buying accessories.
Remember to choose a monthly payment plan that will work for you in the long run. This means that even though opting for lower monthly payments may seem great, especially when your monthly budget can handle it, it will eventually end up costing you way more as the interest rates will be higher and it will take longer to pay off.
Now that you’re clued up on the common mistakes that people make when buying a car at car dealerships, you can confidently proceed to make your purchase. That’s right; soon you will be breathing in the fresh interior of your new car, while the open road purrs your name. So buckle up and enjoy the drive.