One of the most frustrating activities you can engage in is car shopping. (I’m not very fond of any type of shopping, and car shopping is the worst of all.) At least it’s not something you have to do very often.
If you are car shopping, it’s important to avoid the following pitfalls, as they could get you locked into a loan you don’t want:
1. Sitting down to talk numbers
Once you enter the dealership and sit across from the salesperson at the desk, you’re on someone else’s turf. Not only does the pressure to buy go up, but the longer you’re there, the more inclined you are to buy the car. Sometimes the salesperson will even leave to “see what can be done.”
My friend Geoff, who runs FindTheBestCarPrice.com, once told me to negotiate via email or phone — especially for a new car — rather than going in to the car dealership to talk numbers.
2. Focusing only on monthly payments
When the salesperson asks you what you were hoping to pay each month, he or she is trying to get you into the most expensive car possible. The best way to get you to buy a more expensive car than you’d wanted is by focusing your attention on the monthly payment, rather than on the total cost. You can make a more expensive car — with a longer term and a higher interest rate — “affordable” by focusing on the lower monthly payment.
You’ll end up paying more over time, since you got a car that was beyond your desired budget.
3. Revealing your trade-in too early
If you let the salesperson know at the outset that you plan to use a trade-in, there’s a good chance that he or she will take that information into account while negotiating the price. As a result, you might not be able to bring the price down as much as you’d like.
If you can get a lower price at the outset (perhaps negotiating over the phone or email first), and then bring up the trade-in, you may be able to do much better.
4. Dressing nicely
Dressing well can actually work against you when you shop for a car. While you don’t want to look as though you shouldn’t be buying a car at all, dressing too nicely, or driving up to the lot in an expensive and flashy car, can cue the salesperson that you can afford a higher price.
Show up at the end of the month, looking a little scruffy, and the salesperson might be willing to deal, since he or she needs to make the month’s quota. It’ll be all about making the car more affordable for you — based on what you are wearing.
If you can avoid those pitfalls, chances are that you can find a good bargain for your car. You’ll get the best possible price and avoid buying a more expensive car than you’d planned on.
What are your tips for buying a car?
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