How to Avoid Financial Pitfalls When Buying a Car
Tuesday, January 19, 2016, 6:00 AM | Leave Comment
Automobiles are one of the items considered essential for achieving the American Dream. They represent a classy, reliable way to travel to and from home, work and anywhere else you desire to go.
The problem is that buying a new car can become a nightmare. You can run into countless financial pitfalls that can make you pay more for your car than you should.
Let’s examine four financial pitfalls you may encounter when buying a car, and how you can avoid them.
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Overcharging Sellers
When you choose to purchase a car, ensure that you make the seller do the right amount of work while cautiously approaching the sale.
The reason for this is that sellers are determined to make a profit. Showing too much leeway can result in higher prices. Even offering to trade in your car can result in paying $150 to $214 more than if you didn’t offer to trade in your old car.
Increased prices tend to happen when you appear too willing to purchase an automobile. Make the seller work to convince you that you should buy the car. This will keep the price lean and competitive.
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Damaged Automobiles
Cars written off as total losses are generally scrapped, as repairing these automobiles is deemed financially unviable.
The problem is that some damage, particularly the kind that goes along with flooding and other types of water damage, may not present itself as obviously as collision damage. Unscrupulous sellers may try to sell flooded cars to you.
They made have deteriorated electrical systems, engine problems, flooded gas tanks, and countless other problems.
The best way to avoid this pitfall is to do research on your car. The National Motor Vehicle Title Information System allows you to determine if a car has been stolen or damaged. Places like InstaVIN make utilizing this registry simple and convenient.
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Ownership Costs
It’s one thing to look at the cost of purchasing a car, but it’s another thing to consider how expensive that car will be to own. Items like insurance, maintenance and even fuel can quickly add up to become a large financial burden.
When looking for a new car, ensure that you understand the hidden costs associated with it. Sports cars, for example, tend to have higher insurance rates, require performance parts, and use a higher grade of fuel. This makes their cost of ownership significantly higher than a comparably priced sedan.
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Terms of Financing
Most people utilize car loans to make their car purchases affordable. Seldom do consumers have enough to purchase a car with cash in their hands.
The pitfall here is signing for a car loan with a term that is longer than you will have the car. Selling before the term is up will meant that you have to pay the remainder of the loan off before you purchase your next car, which means that the price is even higher.
If you plan to purchase a new car in less than 72 to 84 months, then consider the term of your financing before you sign on the dotted line.
Finding the Best Deal on Your Next Automobile
Vehicles should be safe, dependable and cost-efficient. By performing the right amount of research, and making smart decisions on your next automobile purchase, you can ensure that you avoid many of the financial pitfalls that consumers often fall into.
This will allow you to have a car that is as affordable as it is comfortable to drive.
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