Car buyers now have more tools to get the right vehicle at an affordable price. However, mistakes can still happen. Often, car buyers get caught up in emotions or rush into making a decision.
Experts from Edmunds reveal the four biggest mistakes car buyers often make and provide tips to avoid them.
CHANGING VEHICLES WITH NEGATIVE VALUES
Situations where someone is in ‘negative equity’ when changing vehicles are becoming more and more common. According to Edmunds’ latest report, nearly one in four consumers financing a new vehicle trade-in in the second quarter of 2024 will be in this situation.
The term ‘negative equity’, upside down or underwater refers to a bad situation where all three terms mean the vehicle owner owes more than the car is worth. Not only has the number of such cases increased since 2022, but the amount of debt in that situation has also increased.
For example, if you owe US$5,000 more than the value of your current vehicle and decide to trade in and buy a new car, you will have to pay the price of the new car plus US$5,000. That causes your monthly payment to be higher. The best solution is to continue using the current vehicle until the debt balances with the value of the vehicle.
It may be difficult to wait because you want that new car but if you can ensure that the trade-in value of your vehicle is equal to the loan amount, you will not have to pay extra for the purchase of a new vehicle.
IN A HURRY TO BUY A VEHICLE
There are reasons and circumstances that force a person to accelerate the purchase of a vehicle. Maybe the car was badly damaged in an accident, or it’s a total wreck and not worth repairing.
Either way, you need a new car right away. However, many buyers do not consider doing research beforehand.
There are new automotive features and unusual technologies worth knowing about, especially if you’re buying a new car.
If you are not in a hurry to make a decision, you can get several offers before making a decision and have time to inspect the vehicle if it is a used car.
Even if you need to replace your car quickly, it’s usually best to find alternative transportation while you research your new vehicle purchase. Renting a car for a few days may cost hundreds of dollars, but it’s better than choosing the wrong vehicle or getting stuck with a bad deal.
ONLY GO TO ONE DEALER
That mistake is often made by buyers who are in a hurry to find a new vehicle. Make sure you give yourself time to make a wise decision even if you need a car immediately.
Most price comparisons can be done online or over the phone without leaving home. Avoid going straight to the car shop and making a decision without looking at other options.
Car dealers are usually in competition with each other, so make sure they are doing it in your best interest. Let the dealer know you’re comparing and show them offers from other automotive manufacturers so they know you’re serious.
CONFUSED WITH THE PRICE
Some buyers may feel overwhelmed by salespeople who show lots of numbers, including asking price, trade-in value of your vehicle, down payment and monthly payments.
Although there are fewer traders using misleading tactics like they used to, it is good to be prepared for this situation if it happens. First of all, do research to find out the market value of the vehicle you want to buy before starting negotiations. That number will be the basis of your strategy and provide a reference.
After that, it is better to focus on two numbers which are the sale price plus fees such as tax and license and the trade-in value of your vehicle.
Also, beware of potential add-ons that traders may use to increase their profits.
That includes anti-theft devices, additional warranties, paint and fabric protection, floor mats, wheel locks and more.
You may be able to negotiate for an additional price, but it may interfere with your main goal, which is to get the best deal for the vehicle itself. Buying a car without extras is the best way to avoid this situation.
Taking some time to consider all the options and thinking carefully about the terms of a car purchase can save you thousands of ringgit. It is well worth the time and money. – AP