We all make mistakes when buying a car, and a seemingly small mistake related to a car loan can actually cost quite a bit of money and erase the savings that have been negotiated on the actual purchase price of the vehicle selected.
If you want to get a great deal on your next car loan, you will need to do much more than just get a great deal by haggling with the salesperson or over the sticker cost.
The biggest mistakes related to a new car purchase relate directly to the finance side of the process. When you make the right decision and consider all the options, you will be able to save several thousand dollars – or more –over the life of the loan.
Top 5 Mistakes When Buying A Car
Trying to Make a Purchase with a Low Credit Score
Regardless of your credit score, there are lenders out there who will provide you with a loan. What you may not realize is the extreme amount of interest you are eventually going to have to pay. This is simply because you are considered a bigger risk. When you have good credit, it means you pay your bills on time, don’t exceed your credit limits and have a good grasp on your finances. This is reflected in a high credit rating, which lenders are willing to give a great interest rate, reducing the cost of the vehicle purchased.
However, those with low credit can wind up paying obscene amounts of money in terms of interest. This can cost them big in the long run and there are some who actually wind up paying more than twice or more of the original cost of the vehicle that is purchased.
Negotiating a Lower Monthly Cost Rather than the Actual Purchase Price
Purchasing a vehicle based on the expressed monthly payment is essentially a trap. While you do need to know what you are able to realistically afford each month, this is not something the salesperson should know. If you let them know this, then you will forfeit your entire power for negotiating a better deal. You should not let the sales person turn you into a buyer based on monthly payments.