Through my years in the car business I have come across and dealt thousands of different buyers and buying scenarios.
For the most part, the exercise of buying a car hasn't really changed much through the years. The biggest change to the car buying process has been facilitated by the use of the internet.
But even with the tons of information available at the finger to potential car buyers, there are still some very common car buying mistakes that people still tend to make.
When I say mistakes, I mean in the form of paying too much and/or just being dissatisfied with their purchase.
As a part of this car buying guide, I'm going to go over with you some of these mistakes that people make. Some of which you won't believe... but believe me... they happen everyday.
By reading through this portion of the car buying guide you'll discover what you should (and more importantly) what you should not do when it comes to buying your next car. And if you implement your new found knowledge of the car buying process, you will save yourself money!
1/8/10
1/6/10
Car Buying Guide - I
I always get a kick out of talking with people and friends about buying cars and the whole car buying process.
As you can imagine, I get asked all kinds of questions.
But, one in particular that gets asked is what are some of the big or most common mistakes that people make when buying cars.
In fact, just the other day this topic came up amongst a group of friends I was out with... so we got to talking about it and it was quite enlightening for me and the other folks.
With that topic of a car buying still on my mind; I wanted to put together a little mini car buying guide course that would help folks along with the car buying process and to avoid these costly and frustrating buying mistakes.
These mistakes are the ones that I continually saw people make in my years in the car business.
So... with that in mind... let's get started.
And... by the way if you'll keep these notes tucked away and review them at a time before you are about to get started on your next car buying quest, I'll guarantee you, if you follow the advice you'll end up happier and can save yourself quite a bit of money!
Starting from the top... and not necessarily in order of importance... because they all are very important to you...
The No Research Mistake:
As I mentioned, many times when I am discussing how to buy a car, offering some car buying tips to friends, or responding to their emails I get; I find myself discussing what to do or the best way to do something in the car buying process.
Sometimes, however, the more effective approach may be to talk about what not to do when you are trying to get your best car deals.
So with that in mind, let's take a look at some of the pieces of the car buying puzzle and what you should not do while car shopping and car buying.
The first mistake you can make before you even get started; and a mistake that will ultimately put you behind the proverbial eight ball is not doing your due diligence when it comes researching your buy.
This is really inexcusable. I mean really... let's be honest.
With all of the online abilities, and the ease at which this crucial car buying research can be obtained, there is no excuse for not doing this.
So, shame on you, if you don't.
You're going to need to know the invoice price on the car you are looking at because (if you have happened to have read my eBook) you know that you never negotiate from the MSRP (sticker price) down. You always car price negotiate from invoice up.
Besides, if you don't do any research, are you really going to know a good deal if you see one?
Seriously, if you can't confidently answer that question with a 'yes',then you'd better do some more homework.
And while your researching possible vehicles, be sure to include in your research numbers how each car holds its resale value, because when it comes time to trade, this can save you some bucks as well.
So car buying guide tip number one... doing your research or not doing your research well, is a recipe for overpaying when you buy a car. Once you get started you'll be amazed and maybe somewhat overwhelmed with the amount of information available.
There are any number of excellent websites that offer you a wealth of great information and even services that can take a lot of the work and worry off of your plate when you're working on buying your next car.
In fact, as you visit these websites and start doing your preliminary research, I strongly encourage you to start making a folder. Yes, right there on your computer, you should create a folder for your research.
Early on this will be quite a lot of general research, but as you progress and narrow down your choices you'll have a very helpful and informative 'folder' that will serve as an invaluable sales person deterrant and save you money.
Ultimately, once you get ready to head out to some various car dealers, you'll want to physically print out your info from your folder and take it with you as you begin your early shopping.
Step number one - begin your research on some models that you have in mind.
If you'd like to jump ahead and get all the details on the entire car buying process and how get your best possible deal, I've leveled the playing field for you with my complete car buying guide.
As you can imagine, I get asked all kinds of questions.
But, one in particular that gets asked is what are some of the big or most common mistakes that people make when buying cars.
In fact, just the other day this topic came up amongst a group of friends I was out with... so we got to talking about it and it was quite enlightening for me and the other folks.
With that topic of a car buying still on my mind; I wanted to put together a little mini car buying guide course that would help folks along with the car buying process and to avoid these costly and frustrating buying mistakes.
These mistakes are the ones that I continually saw people make in my years in the car business.
So... with that in mind... let's get started.
And... by the way if you'll keep these notes tucked away and review them at a time before you are about to get started on your next car buying quest, I'll guarantee you, if you follow the advice you'll end up happier and can save yourself quite a bit of money!
Starting from the top... and not necessarily in order of importance... because they all are very important to you...
The No Research Mistake:
As I mentioned, many times when I am discussing how to buy a car, offering some car buying tips to friends, or responding to their emails I get; I find myself discussing what to do or the best way to do something in the car buying process.
Sometimes, however, the more effective approach may be to talk about what not to do when you are trying to get your best car deals.
So with that in mind, let's take a look at some of the pieces of the car buying puzzle and what you should not do while car shopping and car buying.
The first mistake you can make before you even get started; and a mistake that will ultimately put you behind the proverbial eight ball is not doing your due diligence when it comes researching your buy.
This is really inexcusable. I mean really... let's be honest.
With all of the online abilities, and the ease at which this crucial car buying research can be obtained, there is no excuse for not doing this.
So, shame on you, if you don't.
You're going to need to know the invoice price on the car you are looking at because (if you have happened to have read my eBook) you know that you never negotiate from the MSRP (sticker price) down. You always car price negotiate from invoice up.
Besides, if you don't do any research, are you really going to know a good deal if you see one?
Seriously, if you can't confidently answer that question with a 'yes',then you'd better do some more homework.
And while your researching possible vehicles, be sure to include in your research numbers how each car holds its resale value, because when it comes time to trade, this can save you some bucks as well.
So car buying guide tip number one... doing your research or not doing your research well, is a recipe for overpaying when you buy a car. Once you get started you'll be amazed and maybe somewhat overwhelmed with the amount of information available.
There are any number of excellent websites that offer you a wealth of great information and even services that can take a lot of the work and worry off of your plate when you're working on buying your next car.
In fact, as you visit these websites and start doing your preliminary research, I strongly encourage you to start making a folder. Yes, right there on your computer, you should create a folder for your research.
Early on this will be quite a lot of general research, but as you progress and narrow down your choices you'll have a very helpful and informative 'folder' that will serve as an invaluable sales person deterrant and save you money.
Ultimately, once you get ready to head out to some various car dealers, you'll want to physically print out your info from your folder and take it with you as you begin your early shopping.
Step number one - begin your research on some models that you have in mind.
If you'd like to jump ahead and get all the details on the entire car buying process and how get your best possible deal, I've leveled the playing field for you with my complete car buying guide.
1/5/10
Car Buying Guide - II
Earlier we talked about the importance of doing your research and getting you started on putting together the all important information folder that you will ultimately use at the dealership... and getting this done ahead of time and before you actually get out amongst the sales people.
This time we're going to stay somewhat on the topic of researching car information... but just a bit indirectly.
We're going to talk about something now that will directly affect your budget and your pocket book and therefore should be very much a part of your researching module and be kept in your folder.
This particular mistake falls under the "Ooops... I just blew my budget" category and although perhaps not directly related to hammering out your next best new car deal, not knowing what the affect your new car is going to have on your monthly car insurance cost can be a big mistake.
Now granted, when you're all pumped up about getting into your next new car, taking a bit of time to investigate your insurance costs isn't the most glamorous task on your to do list (we will be getting to those soon enough) but, how much your insurance coverage is going to cost you is certainly money out of your pocket just like your car payment.
I am sometimes a bit curious when I talk with people and I bring this topic up and they look at me and go "oh yeah, that's right. I hadn't though about that". Well, you should think about it. Chances are even if you are looking at a used car; if it's still new to you, your insurance will probably go up.
As you are in your initial stages of researching some cars, it's easy to find out how cars are rated by insurance companies. Insurance companies just play the odds and the statistics. By that I mean, if a car is near the top of the list in vehicles stolen, your car insurance is going to cost you more.
If the vehicle type you're looking at is that little sporty model that is fun to go fast in and has a higher rate of accidents, your car insurance cost is going to be higher. If the car you are looking at has expensive replacement parts, your car insurance is going to cost you more.
So, once you've narrowed your car choices down to a chosen few give your insurance agent a call and get a quote and some feedback. In fact, you should shop your insurance around and get more than just one quote rather than just the quote from your agent.
Again, you are the consumer, and it is your money. It doesn't take but just a few minutes to get this done and it could save you money, or save you from making a very expensive mistake.
It's so very easy to get online car insurance or a quote these days and the process doesn't take much time at all. So, add getting insurance quotes to your to do list so you don't get really surprised by what your insurance is going to cost you after you have already bought the car.
Be sure to stop by and check out the details of the whole car buying process and my complete car buying guide.
This time we're going to stay somewhat on the topic of researching car information... but just a bit indirectly.
We're going to talk about something now that will directly affect your budget and your pocket book and therefore should be very much a part of your researching module and be kept in your folder.
This particular mistake falls under the "Ooops... I just blew my budget" category and although perhaps not directly related to hammering out your next best new car deal, not knowing what the affect your new car is going to have on your monthly car insurance cost can be a big mistake.
Now granted, when you're all pumped up about getting into your next new car, taking a bit of time to investigate your insurance costs isn't the most glamorous task on your to do list (we will be getting to those soon enough) but, how much your insurance coverage is going to cost you is certainly money out of your pocket just like your car payment.
I am sometimes a bit curious when I talk with people and I bring this topic up and they look at me and go "oh yeah, that's right. I hadn't though about that". Well, you should think about it. Chances are even if you are looking at a used car; if it's still new to you, your insurance will probably go up.
As you are in your initial stages of researching some cars, it's easy to find out how cars are rated by insurance companies. Insurance companies just play the odds and the statistics. By that I mean, if a car is near the top of the list in vehicles stolen, your car insurance is going to cost you more.
If the vehicle type you're looking at is that little sporty model that is fun to go fast in and has a higher rate of accidents, your car insurance cost is going to be higher. If the car you are looking at has expensive replacement parts, your car insurance is going to cost you more.
So, once you've narrowed your car choices down to a chosen few give your insurance agent a call and get a quote and some feedback. In fact, you should shop your insurance around and get more than just one quote rather than just the quote from your agent.
Again, you are the consumer, and it is your money. It doesn't take but just a few minutes to get this done and it could save you money, or save you from making a very expensive mistake.
It's so very easy to get online car insurance or a quote these days and the process doesn't take much time at all. So, add getting insurance quotes to your to do list so you don't get really surprised by what your insurance is going to cost you after you have already bought the car.
Be sure to stop by and check out the details of the whole car buying process and my complete car buying guide.
1/2/10
Car Buying Guide - III
For this car buying guide edition, let's get into an area of the car buying process that can really cost folks big... financing your car.
Every car dealer has a F&I (finance and insurance)department and you can bet the house they are going to try very hard to get you to allow them to handle the financing for you (and sell you other high profit items too).
Simply based on my experience in the business and subsequently talking with people on the subject of getting your best car deal, I probably shouldn't be surprised at the amount of people that think car dealer financing is just this innocuous process that takes place at the dealership that ties the deal together, and allows them to sign up for their payments and get on down the road.
Wrong!
Car dealer financing and what goes on in a dealership's F&I (finance and insurance) department was a no brainer for me when thinking about some of the most common mistakes people when it comes to car buying.
Let me make this perfectly clear to you... A dealer's F&I department can be an excellent source of profit for the dealership!
But, let's back up one second. For some reason, there is a great many people that don't consider the financing or the cost thereof, part of the cost of ownership puzzle, or part of getting a good car deal.
If you don't... then do, or you'll make many a car dealer very happy to see you coming.
I guess it's because you don't actually 'see' this money leaving your checking account each month. After all, it is hidden inside your car payment (basing your buying decision based on monthly payments is another topic for BIG mistakes).
Take the time to have a look at the impact of interest rates and what you'll be forking over, over the length of your car loan. And if you are car financing with a bit bad credit on your side, the financial implication can be very, very hefty.
Take a moment to consider this... and just to give yourself a wake up call, plug in a $20,000 loan for a car for 5 years at a modest 4% interest rate.
You'll note that your payment comes to $368.33. Now change the interest rate to 8% and you'll see your monthly payment change to $405.53. A difference of only $37.20 month.
Hey, that's only one night less a month to go out.
Right?
Well, take your 37.20 times your 60 month loan and the difference between the two interest rates is a hefty $2232.00! I don't know about you... but twenty-two hundred dollars is worth me taking the time to get my financing options in order.
Shop your interest rate! Let me say that again. Shop your interest rate!
Start by getting (and knowing) your credit score.
Even if you have some difficult credit, shop your interest rates. Sure, they'll probably be higher, but there is no reason for them to not be competitive relatively speaking.
Here's the part about car dealer financing and what I am constantly amazed at when discussing this with people...
Many people don't realize that when they get quoted and interest rate from a car dealer's F&I person, they are being quoted an interest rate with a bump of a point or two... or three added on to what the dealer can actually get the money for.
That's right. Even you of immaculate credit ratings.
If the dealer can get you to sign the financing contract at 8% and they can get the money for 6% they have just made a nice dime on you... whether it's due to ignorance, laziness, or whatever, it doesn't matter. And the numbers used here don't matter... just pick a rate.
If I loan you money at 'x' interest rate when I can get the money for 'x' minus 'y' interest rate, then I am going to make some money on financing you!
Knowing how much you qualify for and what that interest rate will be over the term of the loan is a must when car buying!
Besides saving yourself money on your car deal, having this knowledge during the car dealer financing part of the car buying process will allow you to tell the car dealer to beat what you've got. And you never know... they may be able to; saving you even more!
But if they can't... or won't... you can move forward with the rest of the deal with confidence knowing that you took the time to keep your financing costs as low as your possibly could.
Money saved. Good job!
Fast forward to all the details in my complete car buying guide.
Every car dealer has a F&I (finance and insurance)department and you can bet the house they are going to try very hard to get you to allow them to handle the financing for you (and sell you other high profit items too).
Simply based on my experience in the business and subsequently talking with people on the subject of getting your best car deal, I probably shouldn't be surprised at the amount of people that think car dealer financing is just this innocuous process that takes place at the dealership that ties the deal together, and allows them to sign up for their payments and get on down the road.
Wrong!
Car dealer financing and what goes on in a dealership's F&I (finance and insurance) department was a no brainer for me when thinking about some of the most common mistakes people when it comes to car buying.
Let me make this perfectly clear to you... A dealer's F&I department can be an excellent source of profit for the dealership!
But, let's back up one second. For some reason, there is a great many people that don't consider the financing or the cost thereof, part of the cost of ownership puzzle, or part of getting a good car deal.
If you don't... then do, or you'll make many a car dealer very happy to see you coming.
I guess it's because you don't actually 'see' this money leaving your checking account each month. After all, it is hidden inside your car payment (basing your buying decision based on monthly payments is another topic for BIG mistakes).
Take the time to have a look at the impact of interest rates and what you'll be forking over, over the length of your car loan. And if you are car financing with a bit bad credit on your side, the financial implication can be very, very hefty.
Take a moment to consider this... and just to give yourself a wake up call, plug in a $20,000 loan for a car for 5 years at a modest 4% interest rate.
You'll note that your payment comes to $368.33. Now change the interest rate to 8% and you'll see your monthly payment change to $405.53. A difference of only $37.20 month.
Hey, that's only one night less a month to go out.
Right?
Well, take your 37.20 times your 60 month loan and the difference between the two interest rates is a hefty $2232.00! I don't know about you... but twenty-two hundred dollars is worth me taking the time to get my financing options in order.
Shop your interest rate! Let me say that again. Shop your interest rate!
Start by getting (and knowing) your credit score.
Even if you have some difficult credit, shop your interest rates. Sure, they'll probably be higher, but there is no reason for them to not be competitive relatively speaking.
Here's the part about car dealer financing and what I am constantly amazed at when discussing this with people...
Many people don't realize that when they get quoted and interest rate from a car dealer's F&I person, they are being quoted an interest rate with a bump of a point or two... or three added on to what the dealer can actually get the money for.
That's right. Even you of immaculate credit ratings.
If the dealer can get you to sign the financing contract at 8% and they can get the money for 6% they have just made a nice dime on you... whether it's due to ignorance, laziness, or whatever, it doesn't matter. And the numbers used here don't matter... just pick a rate.
If I loan you money at 'x' interest rate when I can get the money for 'x' minus 'y' interest rate, then I am going to make some money on financing you!
Knowing how much you qualify for and what that interest rate will be over the term of the loan is a must when car buying!
Besides saving yourself money on your car deal, having this knowledge during the car dealer financing part of the car buying process will allow you to tell the car dealer to beat what you've got. And you never know... they may be able to; saving you even more!
But if they can't... or won't... you can move forward with the rest of the deal with confidence knowing that you took the time to keep your financing costs as low as your possibly could.
Money saved. Good job!
Fast forward to all the details in my complete car buying guide.
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