If you are like majority car owners, purchasing a car is not only a smart decision to make, especially if you need to get from home to work as conveniently and efficiently as possible, it is also an emotive decision.
There are many reasons why people buy cars and there are correspondingly as many types of cars to choose from in the market today. Whether you need an environmentally friendly car, a city car, a rough terrain car, or a van, you can find many different variations and configurations of the car.
The important thing is to match the needs and the budget that you have with the car that is actually right for you. In this day and age, it is possible to find the right combination of functionality and the right price due to competitiveness among the many car manufacturers.
It is therefore important to avoid making common mistakes that car buyers make when financing or purchasing a car. Below are the biggest mistakes that are often made.
- Thinking that buying a new car is a good investment
Most people think that buying a new car is a good investment decision. Whereas it may be very important to have a car to move you around and help you get your daily work done, the truth is that the value of the car drops drastically in the first few months and years after you purchase it.
In fact, once you drive a new car out of the lot, the clock starts ticking immediately and you can hardly get back the exact value of the car you bought a few minutes ago from a car dealer. Typically, the value of the car goes down by up to 40% within the first 2 years after you buy it.
With this in mind, it is smarter to buy a car after someone has already taken the initial hit of the cars depreciation. You could get some of the best, used, top cars of 2015.
- Buying a car in several monthly installments
If you want to pay the most for a car, and you shouldn’t, buying it through many monthly installments is how to do it. Most car dealerships assume that car buyers will make the purchase through monthly installments. They therefore rarely anticipate that most people will buy a car as a one off payment when negotiating for the car of their choice.
If you can buy the car at once, use this knowledge to bargain aggressively and get the car at the best possible price.
- Forgetting that there are other costs associated with the car
When most people buy a car, they easily forget that the value of the insurance and other repair and maintenance for the car will depend on the value of the car. In short, an expensive car means an expensive insurance cover, for example. You should be able to afford the insurance and other repair and maintenance costs on a yearly or month to month basis.
Edna J. Rock has been a car loans expert for the last 16 years. She has financed several clients who have purchased their vehicles from //idealautousa.com/. Visit her blog for more details.