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10 Mistakes to Avoid When Buying a New Car

 In the market for a new or used vehicle? With more to be mindful of besides the initial cost, a vehicle is one of the most expensive purchases many of us will make. So before heading out to the car lot, check out this list of 10 common mistakes to avoid when buying a new car:

1.   Failing to Set a Budget

If owning a vehicle were your only financial concern, splurging on a car with all the bells and whistles might not be an issue. But if you’re like most people, you must consider how vehicle ownership will fit in with your other bills such as rent or mortgage, food, utilities, and more. Bottom line: you don’t want to end up with more vehicle than you can afford. When considering a comprehensive vehicle budget, remember to include not just the purchase price but also taxes, registration fees, insurance, and ongoing maintenance costs. Be sure to consider how the monthly payment will fit into your overall financial picture.

2.  Not Researching the Vehicle

Whether you’re buying new or used, make sure to research the vehicle thoroughly before making a purchase. Consider resources like Consumer Reports, Kelley Blue Book, and vehicle history reports from a service like Carfax to gather information on the vehicle’s history and value.

3.  Skipping the Test Drive

Don’t pass up an opportunity to see how the car feels on the road, how it handles and whether it suits your driving style. If it’s a used car, pay particular attention to strange noises and poor handling.

4.  Overlooking Financing Options

Don’t assume that you must go with the dealership’s financing. Before you go car shopping, consider all your financing options. Compare interest rates, terms, and conditions to ensure you’re getting the best deal. Trailhead offers pre-approval for a vehicle loan. Being pre-approved for a loan helps you stick with your budget, and you can negotiate as if you’re a cash buyer.  

  • Check out Trailhead’s auto loans and car-buying page to learn more about current rates, preapproval, loan rate discounts, protecting your purchase, and refinancing.

5.  Not Considering Total Cost of Ownership

The total cost of owning a vehicle goes well beyond the purchase price. It includes fuel, insurance, maintenance, repairs, and depreciation. Some vehicles might have a lower upfront cost but could be more expensive to own over time due to poor fuel efficiency, high insurance premiums, or costly repairs. Be sure to factor these costs into your decision.

6.  Focusing Only on Monthly Payments

If you walk into a car dealership and tell the salesman, “I can only afford $300 a month for a car,” guess how much your payment will be? If you guessed $300, you’re probably right – but for how long, and at what interest rate? While it’s important to not buy more car than you can afford, focusing just on monthly payments can lead to longer loan terms with higher interest rates, ultimately costing you more. Be sure to consider the total cost of the loan, including interest, and aim to pay off the vehicle in the shortest time frame possible.

7.  Not Having the Vehicle Inspected

Even if the used car you’re considering looks great and drives well, there could be issues you can’t see. An inspection by an independent mechanic can reveal potential problems and give you leverage in negotiations or help you avoid a bad purchase altogether.

8.  Not Negotiating the Price

Negotiation is expected in car buying, and failing to negotiate can result in paying more than you need to. Do your research on the fair market value of the vehicle and be prepared to haggle. Remember, you can negotiate not only the price but also other aspects of the deal, such as trade-in value, financing terms, and added features or warranties.

9.  Not Solidifying Car Insurance Before Driving Off the Lot

Don’t assume that you can sort out vehicle insurance after the purchase. Not only is it illegal to drive without insurance in most states, but accidents can happen the moment you leave the dealership, and you’re on the hook for repairs. Before finalizing the purchase, make sure you have an insurance policy lined up that covers your new vehicle. If you’re trading in an old car, contact your insurance provider in advance to transfer or adjust your coverage accordingly. This ensures you’re fully protected from the moment you take ownership.

10.  Falling for Deceptive Car Dealership Practices

Some car dealerships employ high-pressure tactics or deceptive practices to maximize their profits at your expense. One common scam is bait-and-switch, where a dealership advertises a vehicle at an attractive price but claims it’s unavailable when you arrive, only to push a more expensive model. Other tricks involve adding unnecessary fees or forcing you to buy add-ons like extended warranties or overpriced accessories. To protect yourself, read reviews of the dealership, be wary of deals that seem too good to be true, and don’t be afraid to walk away if you feel pressured or uncomfortable. Always ask for an itemized list of fees and avoid signing any documents until you’re completely satisfied with the terms.

What to Know When Buying a Car

Set a budget, do your research, and be prepared to negotiate every aspect of the deal. Don’t rush into a purchase. Take the time to understand the process and remember you can always walk away if the deal doesn’t feel right.  

If you have questions about vehicle financing, common mistakes when buying a car, or the car-buying process in general, call Trailhead at 503-220-2592 or visit your nearest branch, and we’ll be happy to help.