(This is a guest article by Paige Green*)
Whether it’s your first car or you’re tenth, we are all prone to some rather basic mistakes when it comes to making the decision to buy. After all, a car is emotive and appeals to some basic primal need we seem to have for things that are shiny and go very fast. (Historically, our great great grandparents were probably suckers for a speedy horse with a well groomed coat). Unfortunately for our ancestors, they probably didn’t have the same access to information that we currently do, so there was nothing they could do if their prize pony turned out to be a training nightmare. Learn how you can avoid the pitfalls of car financing and purchase by arming yourself with information.
Seven Ways NOT to buy a Car
Falling in Love and getting blindsided
Your perfect vehicle, it looks great, drives like dream and you’ll be the envy of all your peers – if you have your heart set on the car of your dreams – STOP! This is one of the most obvious traps of car buying, especially if you’ve spotted the love of your life in a dealership parking lot. Becoming blindsided and committed to a particular vehicle without first determining the implications of the purchase can mean you’ll be drowning in heavy debt or be bound to particularly unfavourable terms.
Not doing your Research
The decision to buy a car is not a light one and before you step into a dealership or start considering internet auctions, you need to do your research and find out what sort of vehicle will suit your needs. Consider your lifestyle requirements as well as your budget and financing options. Don’t forget to account for the future, if you’re not sure what your situation will be like in five years, you might not want to commit to a vehicle that’ll lock you into a particular style of living for the long term.
Buying and Borrowing out of your Budget
If you’re looking at financing options, it’s tempting to borrow up and “get something you really want”. Remember that defaulting on your monthly payments will seriously affect your credit standing and will have a substantial impact on any future financing. Remember to also consider depreciation costs and other factors that will affect the final value of your vehicle and your assets.
Not looking into finance
When you walk into the lot, the dealer usually offers you instant dealer finance to help you with your purchase which always seems tempting since there’s no lengthy and nervous waiting time that comes with bank loans or the unsettling and embarrassing possibility of rejection. The problem is that without doing your research and considering all of your car financing options, you can end up paying exorbitant fees and higher rates in the long run.
Not test driving
As internet auctions become more prominent, it’s sometimes too easy to just purchase a vehicle based on the owner’s description and not actually doing an in person inspection, especially if the seller is out of state etc. It’s hard to get the information you really need to ensure that a car’s performance measures up to the promised description.
Not Doing a Thorough Inspection
Do your own check for oil (you want to make sure it’s clear and not dirty) and look for any signs of water damage as this could lead to expensive problems in the future even if the vehicle is running great now. When buying a used car, it’s best to consider getting the vehicle inspected by a professional mechanic. For a few extra bucks, it’s worth it to hire a mobile inspector to visit the site and do a quick on the spot check to make sure the car is in good working order. Alternatively, bring along a friend who knows about vehicles.
Not Getting a History Check
By running the Vehicle Identification Number (located on the driver’s side dash or in the door jamb) through vehicle check, you can obtain the full history of your car and find out if it’s been in any accidents or has any outstanding debt attached to it. Don’t take a seller on his or her word, but arm yourself with the necessary information to be a wary buyer.
*About the author: Paige Green hails from the Land Down Under and is an expert at driving on the left side of the road. She waits eagerly for Lemon Laws to be introduced there and also writes for Australia’s leading experts in car finance.
*Image Credit: Photograph by Jeremy Brooks [via Flickr Creative Commons]