Whether new or used - buying a car may be one of the largest purchases you will make in your lifetime. It is important
Web-based dealerships and third-party sites have transformed the way Americans buy cars. In the past, consumers had to rely on what the salesman told them about a vehicle - including its value. Today, car shoppers are more informed than ever before.
As you contemplate a new or pre-owned vehicle purchase, here are some things to keep in mind:
- Third-Party Sites Are Your Friend - So Use Them: Web-based companies like CarGurus and TrueCar offer a convenient way for buyers to find local vehicles for sale. These sites provide consumers with data for each listing including dealer reputation and quality of the deal. While some of these sites will rank vehicles based on how much a dealer pays to list it, CarGurus lists cars in order of market value and dealer reputation. The site also claims
that,“For every listing, we show you on market, price history, a full local-market price analysis anddealer reviews. Everything you need to know before you contact the dealer.” CarGurus and TrueCar are both free for consumers and are exceptional resources car buyers should take advantage of.
- Research Dealerships: The dealership you choose to do business with will play an important role in your overall car buying experience. DealerRater is a great resource that provides unbiased reviews of local dealerships. Every review on the site must pass automated and human moderation before going live, which helps ensure authenticity. The site provides a glimpse into every area of the dealership including sales, management, and the maintenance department. Whether you use DealerRater or something else, do your homework and know what you are getting into before you go.
- Approach Extended Warranties with Caution: If you’ve purchased a car in the past, then you are well aware of the various up-sells presented by dealers toward the end of a sale. Many of these extras are frivolous, but the extended dealer warranty may not be one of them - especially if you are buying pre-owned. New vehicles come with factory warranties, and adding an extended option on top of it may be redundant and unnecessary. On the other hand - if you plan to drive your new car until it stops running, an extended warranty may be worthwhile. Used cars, especially those with expired factory warranties, are better candidates for extended coverage.
- Secure Financing Up-Front: It can be tempting to secure financing through a dealership - especially when a 0% rate is being offered. However, if you plan to negotiate the price of your car purchase, consider securing a loan first. Making an offer and writing a check on the spot will better position you to get the price you want - while financing through the dealership may not. After you settle on a price you can still go through the dealership financing process if you choose.
- Don’t Shop Based on Payments: One of the biggest mistakes car shoppers make is telling a salesman what they want their monthly payment to be. The value of a new or used car shouldn’t be dependent on interest rates, loan duration or trade-in value. While these will ultimately affect your monthly payment, they should not factor into the overall price of the vehicle.
Enjoy the excitement of car shopping and avoid buyer’s remorse by keeping these five tips in mind on your next trip to the dealership.