Car Buying Mistakes
Buying a car is a big move for most people - or at least it should be!
Having said that, it’s easy to make mistakes which is why we’ve outlined the most common ones and listed how to avoid them.
Be prepared when you’re looking for that perfect vehicle.
Mistake 1: Wants over needs
It means deciding you WANT a certain car, rather than needing it. For example, imagining how great it would be driving something cool you’ve seen on the roads, then acting and deciding on those emotions.
Would a small sports car really suit your lifestyle? Would paying more for a big 4x4 really be useful when you usually only travel to work and back on busy roads?
- Top tip
Make sure to think about how and why you use a vehicle. How many times per year do you drive long distances and with whom? Or, how often do you make use of cargo space?
It’s easier to match a vehicle to your lifestyle rather than changing your lifestyle to suit a vehicle - and paying for the privilege.
Mistake 2: Early announcements
This one usually applies to excited buyers. It means telling family, friends and colleagues that you’re “getting a new car” or “going to buy a new make/model next week” for example but the paperwork and finances aren’t even signed.
Sometimes, people make these announcements without even researching vehicles or looking at finances at all.
This creates a feeling of expectations and puts them in a position where they may feel they have to buy a new car.
“I thought you said you were getting a new car?”
Comments like these can push people into making rash decisions.
- Top tip
Discuss plans with people you trust and keep a feeling of “thinking about buying” or “looking at possible cars”. This way you won’t back yourself in a corner.
Mistake 3: Ignoring red flags
This one mainly applies to used vehicles. Sometimes, people fall in love with a car too soon and look past things like missing service log books, damage or high prices.
It can also mean skipping important steps like a professional inspection, thorough test drive or second opinion.
- Top tip
Take the time to check and recheck. If you’re not familiar with cars, it might be worth paying for a professional inspection as these reports often list any repairs or servicing that you will need to pay for down the track.
Mistake 4: Minimising options
Choosing a car because it’s for sale nearby or offered by a friend of a friend and therefore won’t need negotiating can lead to ignoring other (or better) vehicles on the market.
It might be an easy option to simply buy a used car from someone you know, but is that the right vehicle for you?
- Top tip
Use all resources. It might take a few Saturdays, but it’ll be worth it. Get online and use all the resources you have to investigate vehicles for sale that suit your needs.
If you find one interstate, don’t be discouraged. Transport is easy to arrange, especially if buying from a dealer, and if the price is right, it may offset the cost of trucking it to your location.
Some people choose to organise and pay for a professional inspection on a vehicle interstate and, pending the report, fly over and drive it back.
Mistake 5: Miscalculations
The cost of a car is more than just the sales price. It can be tough (and tedious) to factor in registration, stamp duty, servicing and other running costs.
If missed, these can cause considerable pain down the track so make sure to calculate all car costs.
- Top tip
Get all the figures before agreeing to a sale. This may also include any upgrades or modifications you may wish to make.
If you’re buying a new car, optioning up a car can add significant amounts on top of the price.
Ideally, write down all the expenses associated and crunch the numbers.
Mistake 6: Dealer finance
For many car buyers, finance is a great option as it allows them to get into a new vehicle without having to save for years and it often gives them more employment opportunities.
Some car dealers offer finance which may seem easy and attractive, but is it the best option? In many cases, dealers only have limited finance options meaning that if your circumstances don’t fit the bill, it might attract higher rates - if you can get approved at all.
Furthermore, when purchasing a vehicle on dealer finance, you may be limited to specific sales prices of vehicles meaning no negotiating.
- Top tip
Explore options online without formally applying until you’re sure. A great way is by using a loan calculator as you’ll be able to play around with numbers without affecting your credit report.
Each time someone formally applies for credit, it can put a hit on their credit report and that can mean a lower credit score which can affect the outcome of future loan applications.
Better yet, talk to a broker. Brokers are financial experts who deal with a huge range of clients and finance products and can offer solid solutions.
Ideally, you’ll match your circumstances to the right loan product before applying.
Better prepare yourself
Make sure every advantage is on your side and at the ready. That means knowing all the facts and exploring all the options.
Take some time to research any complaints or issues from current owners of the makes and models you’re looking at. Also, read or watch some reviews online and check out all sales Australia-wide.
There’s nothing wrong with asking for other opinions, especially from people in the know and who you trust. Ask friends and family to give a hand, they might spot something crucial - even a simple second opinion.