3 Ways That New Car Owners Overpay

buying-a-car

Cars are one of those things that you shouldn’t overpay for, but that most people do anyway. Much of this is because, though many people use cars everyday, few people have a real understanding of these complex machines. We have almost mystical relationships with our cars, hoping and praying that the sound we hear in the engine just kind of goes away on its own. People who don’t know much about cars are frequently the victim of sales tactics and marketing schemes that are meant to inflate the selling price of a vehicle, or overshadow design flaws which would disqualify the vehicle from prospective purchase. Short of getting a degree in mechanical engineering and studying the history of the world’s automotive models, here are three ways you can make sure you’re not overpaying with your car, current or future.

  1. Auto Insurance. People  auto insurance because they don’t know where to find savings. That’s certainly understandable. There’s nothing more mind-numbing than auto insurance, whether you’re looking for quotes, comparing coverage, or slogging through the fine print of your first insurance contract. The process of finding a good car insurance provider is, at the very least, a little annoying and unpleasant. People don’t like to repeat this process after finding a provider they’re happy with, so they’re unlikely to look for savings once they’ve had a working policy for more than a few months. It’s well worth looking hard at all competitors, if you’re getting car insurance for the first time. It’s also worth giving the competition a call if you currently have a policy. Many insurers will give you discounts for leaving another company to set up a policy with them.
  2. Buying New. Don’t be the guy who buys the new car he can’t afford. Just don’t. Cars depreciate in value very quickly, and the fastest depreciation comes right after the car is driven home for the first time. There are plenty of used cars which are just as reliable as the new thing. Buy used and save. Use the money you saved to maintain your vehicle, or send your kid to college or something.
  3. Not Knowing How to Negotiate. There are lots of negotiating tactics out there for getting the best price on a car. The best one, by far, is to commit to a price you’re willing to pay and be willing to walk away if you don’t get it. This saves time. The best way to go about it is to find exactly the make and model vehicle you want, then find several sources who have it in stock. If possible, buy in cash or have a healthy down payment. Bring the money in cash to the dealership, say what you’re willing to pay, and just walk away if they won’t give it to you. Don’t bluff. Cash is king, and the next place you go is likely to take your offer, especially if you explain that you’ll just go to the competition.

Don’t overpay for a car. Cars aren’t a great asset from a financial perspective, unless you’re able to maintain the car as a classic. If not, get what you can afford and don’t overpay.