It will soon be Christmas and I know some of you may be thinking of purchasing a car for yourself or someone else. Buying a new car can be exciting. But it's also a complex process through which you can end up overpaying by hundreds or thousands of dollars or with a vehicle that you won't be happy with down the road. I asked Jody Victor to go over some common car-buying mistakes.
Jody Victor: Here are the first three of 10 mistakes that car buyers often make that can quickly turn that initial excitement into buyer remorse - and how to avoid them.
1. Falling in love with a model. When spending tens of thousands of dollars on a car, emotion shouldn't rule the day. Becoming infatuated with a single model can blind you to alternative vehicles that may be better for your needs or make you skimp on thoroughly researching a vehicle's ratings, reviews, reliability, or safety and pricing information. A wide-eyed approach can also leave you more susceptible to a salesperson's tactics to get you to pay more than you should. To determine which vehicle is best for you, you should set emotion aside and focus on doing your homework, comparing different models, and assessing your real wants and needs. There will be plenty of time for emotion after you've bought the vehicle.
2. Skipping the test drive. The test drive is one of the most important parts of the car-buying process. A lot of vehicles look good on paper - especially in glossy brochure photos - but the test drive is your best chance to see how a vehicle measures up to expectations and how well it "fits" you and your family. You don't want any surprises after you've bought it. That's why it's surprising that many people give vehicles only a token test or, worse, none at all. That is a mistake and a sure recipe for buyer remorse. It's critical that you take ample time - at least 30 minutes - to conduct a complete test drive and perform a thorough walk-around of any vehicle you're considering.
3. Negotiating down from the sticker price. Don't use the sticker price as your gauge when negotiating a deal. A salesperson may offer you a deal that's say, $500 below the sticker price, and many consumers will conclude, often mistakenly, that they're getting a good deal. Unless the vehicle is in big demand and short supply, you can often get an even lower price by negotiating up from what the dealer paid for the vehicle. When you know the dealer's true cost, you'll know how much profit margin it has to work with and can determine a reasonable target price with which to begin your negotiations. You can calculate the dealer's cost by subtracting any behind-the-scenes sales incentives, such as dealer rebates and holdbacks, from the dealer invoice price. Check out Consumer Reports New Car Price reports to find out the Wholesale Prices.
Thanks, Jody! We'll keep these suggestions in mind - looking forward to the rest.