Become a Smarter Car Buyer in 5 Minutes

Buying a new vehicle is a big decision. The last thing you want is to have buyer’s remorse a couple of weeks down the road. To make sure you choose the right vehicle and the right deal for your particular situation, we’ve put together these nine common car-buying mistakes to watch out for.

1. Not researching online. These days, there’s no excuse not to do your research. Websites such as NADA, Kelley Blue Book, Cars.com, Edmunds and AutoSmart provide free reviews and owner ratings on just about every vehicle, so you can feel confident about your purchase.
   
   Before you begin your research, decide what type of vehicle you want. Once you have a general idea of what will best suit your lifestyle and price range, narrow down your search to a few different makes and models. Get the Vehicle Identification Number (VIN) of the specific vehicles you’re considering and plug them into a car history search site such as AutoCheck. With this information, you’ll be able to confidently compare prices and schedule test drives.Car manufacturer websites may offer additional details that could help you with your new auto purchase research.

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2. Not reviewing your credit before shopping. Your credit score plays a significant role in determining the interest rate of your auto loan. Know the state of your credit before you go shopping to make a better-informed decision. You can get a free copy of your credit report annually from each of the three major credit reporting bureaus—Experian, Equifax and TransUnion. If you bank with Mountain America, you can also access your score for free on our online branch or on our mobile app. Additionally, checking your credit early on in the car-buying process will give you time to fix any errors or inaccurate information you may find. Don't worry if your credit score drops a bit because of a hard inquiry after financing your auto loan. This is normal and it can be built back quickly in a few months..

3. Negotiating for a specific monthly payment instead of the full purchase price. Negotiating the price of your new vehicle can be nerve-racking, even for an experienced car buyer. If you feel nervous during the negotiation process, remember that sometimes it’s better to say too little than too much. Although it’s important to be aware of what you can afford each month, don’t be too quick to give that information to a salesperson. Doing so too early could eliminate any leverage you have to negotiate.

4. Agreeing to dealer financing too quickly. Accepting financing at the dealership is easy, and sometimes it’s your best option. But do you know for sure that you’re getting the best deal? In all the excitement of purchasing a new vehicle, it’s easy to get antsy and sign before reviewing the deal offered to you. Before signing on the dotted line, make sure you take a step back and take the time to understand all the terms and conditions associated with your financing.

5. Not taking the shortest loan term. The beauty of a shorter-term loan is that it keeps you on track to pay off an expensive purchase and enjoy it before it wears out. Cars depreciate astonishingly fast. Talk to your loan officer to see what kind of payment options are available to you. Although a shorter loan term requires you to pay more each month, it could save you hundreds, even thousands, in interest. Putting more money down or having a trade-in may also help with lowering your monthly payments.

6. Not doing the math. When you’re comparing dealer offers, do the math for each scenario before making a final decision. At first glance, you may think you’re getting a great deal, but you could be overlooking hidden fees or other negative terms and conditions. The financial experts at Mountain America also advise that anyone in the market for a new vehicle should calculate how much interest they’ll pay over the life of the loan they are considering. If you don’t have confidence in your math skills, try using our auto calculator. Knowing this number can give you a better understanding of exactly how much you will be spending on your new vehicle.

7. Financing the cost of add-ons. Add-ons may look shiny and pretty, but they are really just anchors that weigh down your loan and end up costing more than they’re worth. Although it may be tempting to drive off the lot with a souped-up new vehicle, try to add on those brand-new rims and accessories, little by little, on your own—it’s usually a much better financial decision.

8. Not being willing to walk away from a deal. Just because an offer has been made doesn’t mean you have to take it. You always have the option to negotiate. Know what you want to spend before you go and stick to it. Remember, you are the one who decides what terms and price you end up with at the end of the day. If the seller doesn’t want to meet your price, be prepared to walk away (on good terms). Let the dealer know that they can contact you if they’re willing to negotiate further in the future.

9. Underestimating the total cost of car ownership. Once you feel like you’ve found the right car for you, it’s easy to let your emotions take over and forget about the true cost of vehicle ownership. When figuring out how much your new wheels are really going to cost you, over time, your monthly payment isn’t the only thing to consider. Ongoing costs—like insurance, gas, taxes and maintenance—must be factored in as well. Do your research and add these costs in to your calculations.

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