Car buying mistakes to avoid

Common car buying mistakes

Some of the biggest mistakes you can make in the car buying process apply to both used and new vehicles, including:

• Not doing your research: Going to a dealership without knowing which car is right for you increases the odds of being sold a car you don't want at a price you can't afford. Check out our lease vs. buy calculator to estimate the total cost of leasing or buying a car.
• Not getting pre-approved for financing: If you don't shop around for the best car loan offer you can get, you may be stuck with what the dealership will offer you. They won't have any incentive to make it a competitive rate unless you give them a competitive pre-approval.
• Not buying based on the price of the car: One of the many pitfalls of being focused on your monthly payment budget is that you can end up paying more for the car. A dealership can make a monthly payment look very attractive if they extend the financing period to five, six, or seven years.
• Not saving the trade-in until later: You may get asked about a trade-in early in your sales process. The dealer will include it in the price negotiation process and make it look like they're saving you a bunch of money with your trade-in. Often, they haven't done anything to reduce the price of the car you're purchasing.
• Not buying while you have time on your side: A car isn't an impulse buy. It's an investment that can have long-term financial implications. Rushing the process often means just accepting what the dealership offers you — and whatever they offer you is typically in their best interest, not yours.
• Not walking away from a bad deal: It's easy to get emotional about a car purchase or stubborn about the time you've spent trying to get the right price for the right car. Sometimes people think they've already spent too much time on the process and just want to get it done. So, rather than walk away, they accept terms they didn't want and ultimately resent the purchase.
• Not getting insurance: Car insurance is required by law in nearly every state. If you’re already insured, contact your insurer to add your new vehicle to your policy.

Mistakes to avoid when buying a new or used car

Whether you're in the market for either a new or used car, there are common mistakes to avoid for both. However, there are also specific mistakes to avoid whether you're buying a new car or used car. Here are some considerations.

Mistakes when buying a used car

Some of the most common mistakes involve not doing your due diligence when purchasing a used vehicle, such as:

• Not test-driving the car thoroughly: You learn different things about a used car when you drive it on local streets versus driving it on the highway. Get a good feel for how the car handles in both driving situations. Learn more about how to test drive a car at a dealership.
• Not looking at maintenance ratings: New cars get vehicle safety ratings, but they're too new to have maintenance ratings. Over time, the make and model of a car tends to develop a reputation for how much it costs on average to maintain. Accumulated data shows how often repairs or replacements have been needed.
  For example, if a particular car has a reputation of needing a new transmission at 60,000 miles and you're looking at a used model of that car with 50,000 miles with the original transmission, you might have second thoughts about buying it.
• Not getting a mechanic to look at it: An inspection can be very affordable, and a small investment here can save you money in the long run. Learn how to have a mechanic look at a used car before you buy.
• Not asking about the vehicle history: Ask the dealership to provide you with a vehicle history report, from a service such as AutoCheck or Carfax. The report provides valuable information about a vehicle's past, such as recalls, accident history, service records, title information, and odometer readings.

Mistakes when buying a new car

Buying a new car is often easier than buying used because you don't have to worry about running it by your mechanic or checking on the vehicle's history. You can make other mistakes, some of which are even more costly than what could happen with a used car purchase, such as:

• Not asking for the car you want: For a dealership, it's much easier to sell a car they have on the lot than to have the one you want shipped from another dealer. Some salespeople may try to steer you toward a car on the lot that isn't what you want.
• Not negotiating the dealer's offer just because it's under MSRP: You may feel like you're getting a deal when the dealer offers you the car below MSRP. But there may still be a large difference between that price and the dealer's actual cost, which means you could be overpaying. Learn more about MSRP price and when you should pay it.
• Not reviewing the final sale paperwork carefully: Whether you buy or lease, or finance through the dealership or with your bank, there may be times when the information on the window sticker, or the information the salesperson gave you, doesn't match what's on the final paperwork.

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