09 Aug 5 mistakes people make when buying a car
Looking to buy a new car? Good luck with that!
Don’t worry, you don’t need luck to make the right buying decision, you just need the right information and some smart thinking. When you finish reading this article you will have the tools you need to buy the car you want!
People make lots of mistakes when buying new or used cars (maybe you have made one or two of these), it may be from rushing into a purchase, not having pre-approved finance, or having an unhealthy credit rating, but if you make any one of these mistakes you could find yourself losing money, or under huge amounts of stress and worry during the process.
Here are our top 5 mistakes people make when buying a car (we all know there’s more than 5, but let’s narrow it down!)
1. Leaving financing to the last minute
Many people have this around the wrong way, they wait until the end to sort out their financing. They research, talk to their friends, get recommendations, visit dealerships, watch reviews, and even make offers before sorting out their finance.
Let’s flip it! Begin your car-buying journey by finding out how much you can borrow. There are various ways of doing this, but one of the best is by booking a free, no-obligation appointment with us and we will walk you through the process.
Start here! Don’t wait till the end to sort out your financing.
2. Not doing a budget
Did you know around 86% of Australians do not know how much they are spending every month? No wonder people make the huge mistake of not putting a budget together before they look at buying a new car!
Whether regarding a car loan or anything else in life, living well above your means can have severe consequences. All it takes is one unexpected problem that requires immediate monetary attention to throw everything off balance.
Don’t make this mistake! Take 30 minutes and scratch out your monthly credits (e.g. salary) and debits (e.g. bills, existing loan repayments, etc.) and figure out what is left over. This will tell you what you can afford and guides your car search (maybe scaling back from a Ferrari to a Mazda CX6)
3. Not knowing or understanding their credit score
If you don’t know your credit score, that’s OK, you’re not alone! But finding out how healthy your credit score needs to be discovered before you apply for finance.
An unhealthy credit score can severely impact your borrowing capacity, including affecting the interest rate and your choices of lenders and/or finance packages.
You can order a free credit report from a few different places including Experian and Equifax, or you can easily contact us at Finestream and we will organise a credit report in no time.
The credit report not only gives you your credit score but lists other information including existing loans, defaults, and credit checks you’ve undertaken. Things to pay attention to are any possible errors in the credit report (and follow up accordingly), paying your bills and loan repayments on time, and minimising credit checks conducted against your name.
4. Not having pre-approval before going car shopping
Confidence is everything when buying a new or used car, not having pre-approval gives the dealer the upper hand from the ‘get go’. Let’s trackback to our number 1, don’t wait till the end to sort out your financing!
Having your pre-approval sorted out gives you confidence going into the buying situation. It disables any perceived power the salesperson has and allows you to drive the price down to their lowest point. Get your pre-approval sorted out and get shopping (after following tips 1-5!)
5. Going with dealer finance
When a dealer says “0% interest” what do you think? Well, what you probably think, along with scores of others is, ”You little beauty!” But guess what, they are thinking the same thing!
If something sounds too good to be true, you and I both know it probably is! You may be in for a shock when you read the fine print and learn of all the hidden fees and charges involved, and how (quite possibly) the interest jumps after a certain amount of time.
There are so many mistakes that can be avoided by engaging with a quality car finance broker. From being able to arrange pre-approval for you to taking the time to explain anything and everything about the finance package you’re interested in, they’re worth their weight in gold.
Here’s a couple of reasons why using a broker is a must:
- Not tied to any one bank or lender, they have access to literally hundreds of financing options
- Individual service, catering to your specific needs
- Arrange your pre-approval
- In-depth explanations and answers to your questions
Well there you have it, the top 5 mistakes people make when looking to buy a car. If you want more information or you want to discuss your options for personal financing please contact us right away. We would love to chat! Call us on 08 8 223 3308 or email email@example.com
Some final thoughts for you: Don’t rush this process. Buying a car is a big deal! It’s exciting and thrilling, but it can also be very daunting and full of doubts. Do your research, learn from other people’s mistakes, and stay calm.
And finally, don’t forget to negotiate during the buying process. Whether it’s with a dealer or a private seller, you are within your rights to strive for the best price you can get. Negotiating can fill people with anxiety and stress, it can be uncomfortable! If you are going to negotiate, don’t forget to have your finance pre-approved, be educated and do your research, stay calm and keep your emotions in check, and be prepared to walk out of there if you are not getting what you want.