Common Misconceptions About Buying a New Car
How true are car buying tips when it comes to helping you save money? 🤔 While some are great and can actually help you spend less, others are just misconceptions that have become commonly circulated and that people have come to accept them as facts. Here are some of the common misconceptions about buying a new car. Let’s dive in!
It’s Best to Buy a Car Online
There are companies that act as a matchmaker between car buyers and dealerships. What happens here is that the companies sell your information to the car dealers who are ready to sell you a car for a pre-set price.
The internet offers a lot of convenience in terms of buying products but the best way to buy a car is still to go to the dealership in person so you can see the actual car you want to buy. You will also get the chance to talk to the salesperson to negotiate prices.
You can use the internet to get an idea of how much money you need to prepare for your purchase but it’s not always the best way to buy a car.
You Should Pay Cash to Save Money
It’s true that there are many benefits to buying a car in full with cash. However, this only works if you have more than enough money in your bank account. If you have to empty your account just to pay with cash, then that’s not a very practical decision. Keep in mind that you still have to be ready for other expenses such as insurance, taxes, fuel, and others.
Sometimes it’s better to choose a good financing option that will not ruin your monthly budget. If paying cash will cause you to spend even your emergency fund, then you won’t be saving money.
With car financing, you only have to pay a deposit and a reasonable monthly repayment amount for a certain period. See to it that you select a repayment term that will fit with your financial situation.
Lower Monthly Payments are Better
The amount you have to pay for financing every month depends on the type of car finance agreement, your deposit, interest rate, and the contract term.
The shorter the contract term, the higher the monthly repayment amount. But the great thing here is that you’ll pay less interest in the long run.
You can get a low monthly repayment amount if you choose a longer contract term such as 72 months or six years instead of three years. However, bear in mind that at the end of the contract, you would have paid more than what the car is actually worth.
If you look at it this way, then it’s not a practical choice. But if you need a low monthly repayment amount because that’s what fits your budget, then you might just need to accept some losses.
You Need to Act Fast on a Car Deal
Salespeople will make it seem like their offer is only good for a limited time. This is to create a sense of urgency so that the car buyer will act fast and make the purchase.
However, chances are you will find another good deal from the same dealership or from another dealership. There’s no reason for you to make the purchase right away, especially if you’re not 100% sure about the car.
If you’re not certain about the car, the deal, your finances, or anything about the purchase, it’s best not to make a decision yet. Remember that this is a big purchase and a major financial responsibility. You are not obligated to take a deal because it’s a limited offer.
When you’re ready to buy a car, you can look for another deal at other dealerships and you might be surprised that their offer is even better than the previous one.
End of the Month is the Best Time to Buy
Dealerships have sales targets so the idea of this commonly accepted misconception is that buying a car at the end of the month will land you a better deal. If you go down this route, then you have to be ready to choose from a limited number of cars, options, and colours because you’ll be choosing from the remaining stock at the dealership.
Another thing to remember is that if the dealership has already hit the sales target for the month, then buying a car at the end of the month wouldn’t make any difference than buying at the start or middle of the month. However, you’d have to choose from a limited number of options though. So, it’s better to assume that this tip doesn’t really work.
Go to the dealership when you’re ready to buy a car so you can get a good selection of vehicles to choose from and not bet on the end-of-the-month offers that the dealership may or may not have.
Buying a new car takes a lot of financial preparation. That’s the first thing to think about. Other tips like buying a car when it’s raining or at the end of the month does very little to affect the outcome of the deal. When your budget is set, you’ll be more confident to go to the dealership and negotiate for a good deal.
Have you heard of these common misconceptions before and have you tried them? Let us know your experience and if any of them actually worked! Also, want to find out if you can change your insurance to your new car in advance? Here's what you need to know! 🚘