Buying a new car is an exciting milestone and a significant financial decision that requires careful planning. To help you navigate this important purchase, we’ve identified 10 common mistakes to avoid, so you can proceed with confidence.

1. Falling for the “New Car” Illusion

A brand-new car might seem irresistible with its fresh scent, shiny features, and the prestige of being the first owner. However, new vehicles lose significant value due to depreciation – especially in the first year. Opting for a slightly used car can save you thousands while offering many of the same features. A car one year older may cost 20% to 30% less than its brand-new counterpart. Consider the total cost of ownership and compare financing, insurance, and maintenance costs between new and used options to determine what’s best for your budget.

2. Missing Out on Incentives and Rebates

Manufacturers and dealerships often offer incentives, rebates, or special promotions on new cars. Failing to research these savings could cost you. Visit manufacturer websites, check dealership promotions, and ask about employee pricing, cash-back deals, or seasonal discounts. Timing your purchase around promotional events can help you maximize savings.

3. Not Negotiating the Price

The Manufacturer’s Suggested Retail Price (MSRP) is a suggestion. Dealers expect buyers to negotiate, so don’t hesitate to haggle. Research the fair market value of the car you want – typically found by sources like Edmunds or Kelley Blue Book^® – then get preapproved for financing. Also, consider visiting the dealership at the end of the month or quarter, when salespeople may be more willing to negotiate to meet their quotas.

4. Overpaying for Add-Ons

Dealerships often push extras like extended warranties, paint protection, or undercoating, which may be overpriced or unnecessary. Evaluate each add-on carefully and consider your actual needs. Research market prices for these extras and negotiate their cost if you decide to include them.

5. Ignoring the Financing Fine Print

Car loans can come with complex terms and hidden fees. Before signing, review the loan terms, interest rates, and payment schedule in detail. Shopping around for financing can help you secure the best rates. Preapproval from a bank or credit union can also give you negotiating leverage at the dealership.

6. Overlooking the Total Cost of Ownership

The sticker price is only part of the equation. Insurance, maintenance, fuel costs, and depreciation can significantly increase the overall price of the vehicle. Research all costs for the specific make and model you’re considering to avoid surprises.

7. Underestimating Resale Value

Different car models depreciate at different rates. Choosing a vehicle with solid resale value can save you money in the long run when it’s time to sell or trade. Research depreciation rates and choose a model known for maintaining its value over time.

8. Succumbing to High-Pressure Sales Tactics

Some salespeople may use high-pressure tactics to push you into a quick decision. Don’t rush. Stay firm on your budget and take the time to consider your options. Be prepared to walk away if the deal doesn’t feel right. It’s always helpful to have another opinion, as well. Bring a trusted friend or family member for support when visiting dealerships.

9. Choosing the Latest Model Without Comparison

While the newest model may have the latest features, the previous year’s model is often a lower-cost alternative. Opting for the previous model year can save thousands while offering nearly identical features. Compare both options to decide whether the latest upgrades are worth the extra expense.

10. Failing to Future-Proof Your Purchase

When selecting a car, consider your long-term needs. Will your family grow? Do you anticipate needing more cargo space or better fuel efficiency? Choosing a vehicle that fits your future lifestyle can help you avoid replacing it sooner than planned.

Need help navigating the car buying process? Contact our experts today for personalized guidance!