Sometimes buying a brand new car may not be financially feasible for you, which is why you can go for a used car. If you are also planning to buy a used car, you may come across multiple choices that can prove utterly confusing at times. You are not expected to know the nitty-gritty of the trade, but some dealers are lurking around to take advantage of the situation.
Buying a new car is a significant investment, and you should cautiously go about with the process. Here are a few traps that most first-time car buyers fall into and how to avoid them:
Not knowing the car and dealer
The automobile market is operated by a plethora of dealers who stock different types of used cars. More often than not, you may land up approaching an unreliable dealer who has defective cars. You should take out time to research on the cars and dealers, and compare different options by going through online reviews, special sales, and financing options. Look and feel of the car don’t always matter.
Always following what the dealer says
You may come across dealers who try to take advantage of your desperation and show your cars and financing options that benefit them more than you. They may show you an expensive car and provide a financing scheme that doesn’t suit your pocket. You should gain prior knowledge of financing schemes and ask your dealer what they offer.
Considering only the monthly interest payment
You may be lured by the affordable monthly interest payment you have to make on your used car loan, but it’s a trap. You may make the mistake of just considering the APR and not the overall cost of ownership. A low-interest rate loan doesn’t mean you don’t have to think about insurance or other car-related expenses, which should be included in the cost computation.
Going for a long-term loan
Lastly, you should avoid going for a long-term loan. You can certainly lower your monthly payments this way, but you might land up increasing the overall cost of the car. To get the best deal, you should consider buying a used car with a bigger down payment or going for a short-term loan.