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Mistakes Buyers Make When They Buy A Car

Although now may be a good time to buy a car, there are a few things to keep in mind,  For example some of those cash-back offers from dealers apply only if you accept the dealer's financing.

Be Realistic

There are many car-buying mistakes commonly made by buyers in the auto industry, in what can be a confusing process to buy a vehicle.  Most dealers are honest, reliable and hardworking local businessmen and women–but there are some precautions consumers should take before they purchase a car.

Mistake 1: buying the car you think you'll need, rather than buying the one that suits your current needs best.  People often think that someday they will need to tow a boat or camper and so they buy a big truck or SUV but subsequently end up purchasing a more expense vehicle not needing the features it has.

Mistake 2: Purchasing a car at the beginning of the year. This mistake especially applies to luxury vehicles, which charge a premium for being the very latest and the very best in their class. In January, February and March, dealers have all year long to meet sales goals and sell inventory, but by the end of the year they'll be anxious to clear their lots for new stock. What's more, the minute the calendar changes to Jan. 1 and a newer model year becomes current, anything older than that immediately loses desirability.  In December often vehicles are heavily discounted or other incentives are offered.

Know the Market

Due diligence is so important and can prevent the buyer making many mistakes.

Mistake 3: Entering a showroom without knowing the prices of vehicles in mind, a list of must-haves and a budget.  Impulse buyers can make big blunders in this situation.  Determine the market value of the car you'd like to buy before hitting the lot – this will help when negotiations with the sales person starts.

Use Kelley Blue Book, NADA Guides, Cars.com, AutoTrader.com and Edmunds.com to find the true market value and the expected residual value of the car you want. EBay.com and Craigslist.com are also good resources for determining the street value of a car you're considering.

Mistake 4: Talking too much.  Don’t tell the dealer more than they need to know, and never let on how desperate you are to buy a car.  And if you don’t feel that you can do this then take someone with you who can do the talking for you.

Mistake 5: Not factoring in all costs associated with buying a car.  Buyers need to include other costs such as insurance, finance, maintenance and servicing to get an overall picture of the true cost of the vehicle and compare that to their budget.  The residual value of the vehicle is important also for when the time comes to sell.

Mistake 6: Assuming you'll use the dealer's financing.  Dealers often set monthly payment amounts assuming they'll make up the difference with the financing agreement. Instead, arrange for your own financing at your own bank or financier, and choose the shortest-term car loan you can: Long-term loans coax people into buying cars they can't really afford by stretching the payments out over such a long period of time that the car is almost fully depreciated by the time it's paid for.

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