AUTO BUYING MISTAKES TO AVOID

Pay attention...by avoiding the mistakes below, you can literally save thousands of dollars on your next car purchase.

Purchasing new as opposed to pre-owned/used is a mistake!
New vehicles depreciate anywhere from $2,500 - $6,000 the instant you drive them off the lot into the street. Therefore, utilizing any auto loan on a new automobile purchase will equate to you owing more than your car is worth almost instantly (more commonly known as being 'upside-down'). A new car does have lots of appeal. However, is said appeal worth instantly losing all that money? We suggest that instead of buying new, purchase the same make and model, just one year older. Not only will you avoid the impact of the instant depreciation associated with new cars, your purchase price will be significantly cheaper and your car will also come with all the warranty perks as a new car. Learn more about the benefits of buying used.

Not doing your due diligence!
Nowadays, with the advancement of the Internet, car buyers have an amazing amount of resources for doing research for a new or used car purchase. Cars.com, Edmunds, and Kelly Blue Blook all offer free info about all makes and models of new and used cars. This includes owner ratings, pricing, features, reliability, suggestions, and a whole lot more! Prior to even looking at cars, a good idea would be to visit the above sites and compare several different cars that fit in your price range, determine what vehicle is best for you and your needs as well as what price you should expect to pay.

Even more important is to make sure any car you are considering buying has a clean vehicle history report. Eliminate the possibility of buying a lemon or a car that has been in accidents. You are going to want to take the VIN (vehicle identification number) and run it through Carfax's system. New automobiles need to have their history's checked as well. You don't know what happened in between the factory and the dealer. It is also common for dealers to attempt to sell a used car as new. In addition, new cars are always getting damaged by hurricanes, floods, etc..

Don't get hustled by dealers and the price of your car!
One of the biggest dealer hustles is for them to work off the amount you want to spend each month for your car loan as opposed to what you want to pay for your car. The dealer will compute your payments with a really long loan term. The longer the rate, the lower your monthly obligation will be but the more you are going to pay for your car. For example, a $30,000 vehicle with a five year loan term will have close to the same monthly payment as an $18,500 auto with a three year loan term. The major difference is going to be that you will wind up paying more than $3,000 additional in interest costs for the $30,000 vehicle. Some people don't care and would rather pay more and get more car. A good idea would be to ask for a complete breakdown as to what the price of the vehicle is and what you can expect in terms of monthly auto loan payments and total interest costs. Determine how much to spend on your car purchase.

Do not buy dealer add-ons!
Optional features that can be added to a vehicle are called dealer add-ons. Some of the more common types of dealer add-ons include stereos, alarms, window tinting, chrome tires, etc.. Dealer add-ons are a tactic of adding overpriced features for the purpose of increasing the final sale price of the car. It is important to note that add-ons should not be considered investments for increasing the cars worth since almost all add-ons do not add any long-term worth to the automobile. In fact, add-ons can damage the re-sale value of your car since your tastes may be unique and not the same as the majority of consumers. We suggest that if you are looking to tint your car, improve the stereo, etc. that you research outside sources that can likely provide the same service and merchandise for significantly less than the dealers.

Avoid dealer financing offers!
Car loans being offered by dealerships almost always have a few extra points tied to them than if you were to obtain your loan from your credit union or online lender. Therefore, you should do some research prior to hitting the dealers to see what types of rates are being offered and learn how to get the best auto loans rates. Obtaining a loan at 4% as opposed to 9% will save you a tremendous amount of money! BUT, dealership financing can also be the best available deal for you! If you have stellar credit, you may be able to take advantage of those 0% offers you see on television all the time. 0% offers are difficult to qualify for, but if you do, you should take advantage of them. Also, if you have poor credit and are unable to achieve financing from any outside source, and the dealer can get you approved, you will need to utilize them for your financing. Therefore, to ensure you get the best deal for your wallet, determine and assess all of your options prior to selecting what type of financing you are going to proceed with.

**Learn more about the variety of auto loans for people of all good and bad credit types.

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