1 – People don’t test drive or don’t test drive enough Vehicles
Car buyers often don’t take advantage of the service provided by the dealer that is unique to the industry. The test drive is a try before you buy service that everybody should take advantage of. The car is the second largest purchase people make behind a house, however a real estate agent will not allow you to live in the house to help make your decision on whether to buy it or not.
You will spend more time in a car driving it in than looking at it, so how it drives and the feel of it should be vital when making a decision. Also the best way to re-affirm if you are making the right decision is to test drive a competitor vehicle or as many as you see relevant and fit.
2 – Not enough Comparing
Most buyers only consider 3 – 4 vehicles when they are making a decision when in fact due to the large amount of choice in Australia (greater than any other country in the world), you should be expanding your field of choice to around 6 – 8 vehicles. Again, it the is one of the largest purchases you will do in your life and the same amount of comparison and consideration should be given to a vehicle as if you were looking for your dream/perfect home.
3 – Buying on Finance Rate
Increasingly manufacturers are having sales based on finance rates rather than the price of the vehicle, like the Toyota 2.9% offers. People often rush in to a purchase of a vehicle because they think they are saving thousands by doing this – they are but could you save more?
When you take a finance offer at a dealership you are paying a set non-negotiable price for the vehicle. If you fore go this offer you are able to ask for a discount on the price of the vehicle. The key in deciding what to do lies in what you will be paying for the vehicle at the end of the loan term. If you take a 2.9% interest offer and pay $40k for a car, you are worse off than if you negotiate the car down to $35k and get a 6.9% finance deal. All that should matter is what you pay at the end of your loan term.
4 – Forgetting about the trade in
A lot of people when negotiating deals on a potential car spend so much time and energy on getting a good price on the new car they forget that the trade in is also a negotiating tool. By leaving it until the last minute to talk about the trade you are more willing to accept the dealer offer on it rather than what you want or think it’s worth.
Make sure both prices are negotiated together….for instance at the beginning you may state to the salesman ‘I will do a deal if the new car is $35k and I get $15k for my trade”. That is always a good starting point to negotiating.
5 – Blowing the Budget
Always stick to your budget. There are many ways to blow it, ‘it’s only $50 extra a month for leather”, “but the next model up has a sunroof”. The budget you start with should always be where you end. There is very little logical reasons it should change unless your needs in life change i.e. discover you are expecting a child.
The longer the research process takes will also always see a creep up in price and model spec. It gives the individual time to justify the increase.
Test drive a Toyota and see the difference.