Car Buying Articles

The 11 Biggest Mistakes Car Shoppers Make

The Blunders That Can Really Cost You


  • Don't Buy From a Salesperson You Don't Trust

    Don't Buy From a Salesperson You Don't Trust

    There are good salespeople out there who deserve your business. Thanks to dealership reviews, it's increasingly easy to find them. | June 10, 2014

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When you're shopping for a car, there's a lot at stake, including time, money and your family's driving happiness for years to come. You don't have to do everything perfectly when you're car shopping, but there are some big mistakes you definitely should avoid. As you start your search for your next car, stay away from these top buying blunders. They can really cost you.

1. Skipping the research phase
With any major purchase, you need to do your homework beforehand. Thanks to the Internet, there are reliable sites (like Edmunds.com) that supply a wealth of information on car makes and models, reviews, pricing, rebates and incentives and negotiating techniques.

2. Shopping at just one dealership
When it comes to finding a great deal, it pays to shop around. Plan on checking out at least three different dealerships. You don't want to do this in person — and you don't have to. You can use Edmunds.com and dealership Web sites to view vehicle inventory, and you can ask for prices via the quote-request systems.

Compare deals, and when you're ready to buy, let the dealerships with whom you're talking know that you're keeping your options open. This can help you secure a great price. Also remember that it's not just about money: You also want to choose a dealership you're comfortable doing business with. Edmunds.com has dealer reviews that let you read what other shoppers have to say about the dealership with whom you might be working.

3. Ignoring the Internet department
Most people aren't even aware that dealerships typically have an online operation that lets you negotiate a price and make a deal remotely. That's a huge stress reliever for those of us who hate negotiating face to face. For the ultimate in stress-free car shopping, check out Edmunds Price Promise®, which offers shoppers an up-front, no-haggle price.

4. Focusing on the monthly payment
Many buyers go in with a set amount they'd like to pay every month, and are happy to share that figure with the salesperson.

"When you do that, you're not actually talking about the total price of the car," says Edmunds.com Senior Consumer Advice Editor Phil Reed. "You also need to take into consideration the interest rate, as well as the length of the loan." For example, a dealer might suggest a longer loan so the car fits in your budget. But a longer loan also means you pay more in interest. In the end, you wind up overpaying for the car.

5. Not doing an appraisal of your trade-in
If you're planning on trading in your old car, be sure to look up its value on your own. You can get an estimate of your car's trade-in value from Edmunds.com: Be sure to print out the details and bring them with you to the dealership. If you don't think you're getting a fair deal, you might be better off selling the car on your own, either to a private party or to the used-car superstore CarMax.

Does your vehicle need some minor work, such as new tires or wiper blades? It's probably not worth fixing, says Matt Jones, senior editor, retail experience at Edmunds. It won't add much value to the trade-in. You're better off putting the money toward the new car.

6. Failing to do a thorough test-drive
You're driving a car that doesn't belong to you, so it's normal to be a bit nervous. That's why the salesperson usually directs you where to go during a test-drive, which probably involves going down some local roads and making a few right-hand turns. But does that really give you a sense of how the car handles and how comfortable you are driving it?

"Many of the complaints we get about cars could have been avoided with a good long test-drive," says Jack Gillis, director of public affairs at Consumer Federation of America and author of The Car Book.

Buyers need to think about how they are going to use the car on a daily basis: driving on the highway, transporting kids and pets and parking under various conditions, for example. The test-drive also is the time to check out visibility when backing up, how a car seat would fit into the back, if that third row is really so easy to get in and out of. Make a checklist of your "must-have" features and refer to it during the drive. Our article "How to Test-Drive a Car" has some useful tips.

7. Skipping the call to your insurance agent
You need to look at the big picture when you're buying a new car, especially when it comes to insurance. Will you be paying more or less with this new vehicle? Do you need gap insurance? These are questions that should be addressed with your insurance company, says John Ulin, a second-generation insurance agent at Allstate in Levittown, New York. "Many people let the dealership handle everything, but agents often think about issues buyers forget about, such as asking for a Carfax [vehicle history report] if buying a used car. The dealer will pay for it, but you have to request it."

8. Buying from a salesperson you don't trust
Too many of us buy cars from salespeople we don't particularly like or trust. Even worse, says Reed, many people buy from salespeople because they feel sorry for them. Remember, this is a business deal, and the result is for you to get the right car at the right price. If a salesperson makes you feel uneasy for any reason (she's too pushy; he doesn't seem to know much about the cars), walk away.

Ideally, the salesperson can demonstrate the features of the car and help match a customer to the right car. So look for a salesperson who listens well and answers your questions directly. Then, as you move from the test-drive to the deal-making phase, you will have established a rapport that should make the rest of the process easier.

9. Underestimating the importance of F&I
You've negotiated the deal, and you're headed to the finance and insurance office (F&I). You're in the home stretch, right? Wrong. While this step seems like an afterthought, it's actually an essential part of the deal-making process, says Reed. "F&I is where the verbal promises made by the salesperson are carefully put into the contract. It's also where they try to sell you extra things, such as extended warranties, gap insurance, etc. that can wind up costing you more than anticipated."

This is another place where research pays off. If you think you might want an extended warranty, check out what they cost and negotiate for a better deal.

10. Taking dealership financing without shopping around
The convenience of one-stop shopping at the dealership can be hard to pass up, but it's smarter to look into financing with local banks or your credit union first. Better yet, get a pre-approval for a car loan before you get to the dealership. You will know exactly how much you can afford to spend on the car, and you'll immediately know if the dealer can offer you a better deal on the interest rate.

11. Buying under pressure
You may hear that a car is "the deal of a lifetime" that happens to only be good on that particular day. But shopping for, buying and driving away with a car in just a few hours is unwise. After all, this is a major purchase that can affect you financially for years to come, so you have the right to sleep on it. And Reed points out that when you express hesitation, you may well get a better offer later on. If you get too much pressure to buy the car that very day, it may be best to walk away.

Forewarned, Forearmed
With any major purchase, it pays to be informed and prepared. Now that you're aware of these common car buying mistakes, you can ensure you'll find the right car for your family — as well as getting the most bang for your buck. Who knows? You might actually enjoy the process this time around!

Comments

  • #9 is a huge one. They do the nice friendly 'we've agreed on a price now we'll just get you in to sign the paperwork' thing. But if you don't know what interest rate you qualify for they'll mark that up and pocket the difference. If you don't know what the add-ons and accessories cost they'll mark those up and pocket the difference. Want tinted windows? Call tint shops before you buy for quotes or the dealer will just make up a nice high number for that price and... pocket the difference. Want an extended warranty? Call around about those before you buy. People will go to a different dealer to save a couple hundred on the car and then overpay by $500 or more for the warranty. And check the brand of warranty they are selling and how reputable it is. Most dealers sell aftermarket warranties even though a lot of manufactures have their own simply because they can make hundreds more in mark-up on the aftermarket ones. The spot where you sign the paperwork and get warranties and extras is where the sales department makes their money. Just about everything in there is as negotiable as the price of the car and the mark-up percentage is huge compared to the car. Don't even buy floor mats for the car there unless you've priced them elsewhere first. And read every line of the contract that has a dollar value next to it until you know exactly what that amount is for.

  • here's another idea for Edmunds to use. Everyone and their uncle has a car pricing service but how about a service where the customer pays Edmunds to look over the deal before they sign? After recently knowing two well educated, knowledgeable people that got taken at least slightly in car buying experiences it hit me that customers need someone there for the final signing, not just the settling on a price. The customer pre-registers and then when they find the car they like and settle on a price they have the dealer fax the paperwork to the Edmunds "on your side" service before they sign. Then they get a message on their phone app that highlights what items are good and what items may be overcharged or unnecessary. I can see the commercial already; the dealer is handing the meek customer the paperwork to sign and the customer says "great, just let me have my friend from Edmunds.com take a look at it first and startled the salesman suddenly sees a professional looking person behind the customer. Tagline "Edmunds on your side, everyone wants a friend in the car business with them when they sign" follow-up commercial blurb shows a salesman cringing as he sees the Edmunds guy walking behind a customer and a new salesperson asks "what's wrong?" to which he replies "he's got an expert on his side, we won't be getting anything past him"

  • henryn henryn Posts:

    I like that idea, just above. I really, really like that idea.

  • darthbimmer darthbimmer Posts:

    My wife and I have employed pretty much all of these techniques on our last several car purchases, and we're happy we did. The MOST VALUABLE tips are #2-3. We shopped for competitive pricing at multiple dealerships (half wouldn't negotiate but half did) and worked with the internet/fleet managers as much as possible because they tend to come to reasonable terms quickly rather than chew up your time & theirs arguing for several hours.

  • isellhondas isellhondas Posts:

    > @zimtheinvader said: > #9 is a huge one. They do the nice friendly 'we've agreed on a price now we'll just get you in to sign the paperwork' thing. But if you don't know what interest rate you qualify for they'll mark that up and pocket the difference. If you don't know what the add-ons and accessories cost they'll mark those up and pocket the difference. Want tinted windows? Call tint shops before you buy for quotes or the dealer will just make up a nice high number for that price and... pocket the difference. Want an extended warranty? Call around about those before you buy. People will go to a different dealer to save a couple hundred on the car and then overpay by $500 or more for the warranty. And check the brand of warranty they are selling and how reputable it is. Most dealers sell aftermarket warranties even though a lot of manufactures have their own simply because they can make hundreds more in mark-up on the aftermarket ones. The spot where you sign the paperwork and get warranties and extras is where the sales department makes their money. Just about everything in there is as negotiable as the price of the car and the mark-up percentage is huge compared to the car. Don't even buy floor mats for the car there unless you've priced them elsewhere first. And read every line of the contract that has a dollar value next to it until you know exactly what that amount is for. "Pocket the difference" Yep, that's called (gasp) making a profit. When you buy a gallon of milk, the store marked it up from what they paid for it and they "pocketed the difference".

  • isellhondas isellhondas Posts:

    > @zimtheinvader said: > here's another idea for Edmunds to use. Everyone and their uncle has a car pricing service but how about a service where the customer pays Edmunds to look over the deal before they sign? After recently knowing two well educated, knowledgeable people that got taken at least slightly in car buying experiences it hit me that customers need someone there for the final signing, not just the settling on a price. The customer pre-registers and then when they find the car they like and settle on a price they have the dealer fax the paperwork to the Edmunds "on your side" service before they sign. Then they get a message on their phone app that highlights what items are good and what items may be overcharged or unnecessary. I can see the commercial already; the dealer is handing the meek customer the paperwork to sign and the customer says "great, just let me have my friend from Edmunds.com take a look at it first and startled the salesman suddenly sees a professional looking person behind the customer. Tagline "Edmunds on your side, everyone wants a friend in the car business with them when they sign" follow-up commercial blurb shows a salesman cringing as he sees the Edmunds guy walking behind a customer and a new salesperson asks "what's wrong?" to which he replies "he's got an expert on his side, we won't be getting anything past him" Nothing new there. That's called "using a first baseman". Sometimes the first baseman helps and sometimes they will kill a sale both for the store and the person they are trying to help. Sometimes the first basemen are knowledgeable and other times not at all.

  • tmg09 tmg09 Posts:

    When I test drove my 2012 Dodge Caliber SXT, I didn't check if keys could be removed from the ignition while in 'Park", Nuetral and Drive' shift positions. Keys should only come out of the ignition when car is in 'PARK" and car is turned off. My car rolled away, crashing down a hill of trees. I turned off my car and for reason unknown, knocked my shifter assembly to perhaps the 'Nuetral' position. Car is still under warranty but Chrysler paid $283 for a new shfter assembly only. I put another $1,000 into getting the car winched out of trees and replacement/repair of components to make car safe to drive and pass state inspection. I got a total cost estimate for $3,000 damages. It still has damage and potential resale value is less. Chrysler Headquarters would not reimburse nothing of the headlight, fender damage. realignment or other repairs made.

  • galacticcat galacticcat Posts:

    Buying a car or truck is the single worst investment you make . Just keep this in mind when U need a vehicle. And when U drive that shiny new car or truck off the dealer's lot it instantly drops 20% in value

  • stever stever Posts:

    Except for the odd collector model, cars have never been investments. They are tools. Some used tools get the job done fine, but some newer tools get the job done faster, or more efficiently or do the job more easily or comfortably. And what else are you going to spend your hard earned dollars on? Drive what you like - life is short.

  • karhill1 karhill1 Posts:

    All are good standards for any vehicle purchase. Number 9 is probably the area where most people are at risk. Finance folks have two jobs. One is benign which is to assure the deal is consummated and the paperwork correct. The second job is contrary to the goals of the buyer. That is to increase dealer profit and line the F&I person's pocket with a nice commission. Finance folks are experts at praying on buyer's ignorance, fear, and elation. Other than dealer financing which can sometimes better any other rate,the only word a buyer should utter in the F&I office is NO. Everything is overpriced and of dubious value.

  • plekto plekto Posts:

    The best thing to do is to go through the steps, play along, and then pay for it immediately with a pre-approved loan. Just write a check and deal with your bank or credit union, which will always give you a better deal. No funny paperwork, no running your credit 6 times to find a deal that works best for them. All up front and normal and the money gets taken out of your account every month without any issues. Better yet is to go through the bank's new car department which will do it all for you. The games the dealership will try to do with accepting the payment from the bank can be a whole ordeal in itself. If you do have to get a check to the dealership from your bank, drive it over in person or have your bank send it via a courier service. And, yes, I did have them remove the alarm system and didn't even buy floor mats. I got some really nice ones online for a fraction of the cost. And get them to put the original wheels back on it or give you them. You'd be amazed at the number of dealerships that put rims on a car that doesn't need it to increase their profit margin.

  • stever stever Posts:

    Getting a pre-approved loan is great but it doesn't hurt to let the dealer try to beat the rate. The dealer makes money packaging the loan and they don't really care what the interest rate is, so long as their lender is okay with the rate. So you may be able to get another .25% off the rate you got from your bank or credit union.

  • plekto plekto Posts:

    I've never once seen or heard of a dealership's finance department beating a bank and not putting some sort of extra profit or pulling some shenanigans. I suppose it could happen, but I've never seen it. Nobody that I know of has, either.

  • stever stever Posts:

    [Here's one] example a quick search found. [edit - looks like my link got lost - here's [another](http://forums.edmunds.com/discussion/comment/4146603/#Comment_4146603 "another") try] It's pretty simple - you do your deal and in the F&I room when you sit down to sign the paperwork, you invite the dealer to beat your rate. It doesn't mean redoing the deal. You get a better rate and the dealer picks up the kickback fee from the financing.

  • henryn henryn Posts:

    Once, when I was buying a 3 year old CPO Cadillac, the dealer matched my credit union and I let him do the financing. Another time, buying a new 2008 Passat, the dealer was only 0.1% over the credit union, so I let him have the deal.

  • stever stever Posts:

    I suppose if the finance person offers to beat your rate, you could really be a grinder and say okay, but you have to throw the floor mats in for free. :smile: Some hardnosed buyers play the game with a twist. They do their best deal, letting the dealer think they are payment buyers. At closing they say, btw, I've decided to let my credit union do my loan and I'm going to pay with one of their checks. The theory is that the dealer will shave some money off your car price, figuring they'll collect the fee for packaging the financing with their lender.

  • stever stever Posts:

    Another interesting take on "dealer reserves". "Many lenders establish a minimum dealer reserve, so even if the buy rate is the same as the loan interest rate, the dealer will receive a commission. If both a percentage paid and minimum amount are used, the minimum is typically applied after the percentage paid is applied." ([PROM Software Inc](http://www.promsoft.com/dlr_reserve.htm "PROM Software Inc")). I think this helps explain why some dealers will meet your preapproved rate without changing the rest of your deal. The Consumer Financial Protection Bureau has been trying to do away with dealer reserves (aka kickbacks), but hasn't made much progress. [CFPB promises clarity on discrimination; NADA skeptical](http://www.autonews.com/article/20140625/FINANCE_AND_INSURANCE/140629937/cfpb-promises-clarity-on-discrimination;-nada-skeptical "CFPB promises clarity on discrimination; NADA skeptical") (Automotive News) Going to a flat fee would eliminate the issue but dealers make a lot of money putting car loans together.

  • But in my example rather than it being an obnoxious uncle helping out it would be a professional that would give honest "that is a reasonable document fee" and "that is within the range for what that accessory costs" information on the paperwork as well as things like "we already ran your credit and you qualify for 1% lower than what they are quoting. > @isellhondas said: > Nothing new there. That's called "using a first baseman". >Sometimes the first baseman helps and sometimes they >will kill a sale both for the store and the person they are trying to help. >Sometimes the first basemen are knowledgeable and other times not at all.

  • To an extent. Yes, profit is necessary in a business. What isn't necessary are the deals I've seen where they have an aftermarket place put moldings on the side of the car for well under $100 and sell it to the customer for $500. But that is on the customers for not doing their research. Or the $100 alarms for $1000. There is markup and then there is screwing the customer. The grocery store isn't saying "we'll have the gallon of milk for you, it will be $50 and then just calling the 7-11 to have them bring over a $3 gallon to you. They aren't advertising the milk for $5 and then after 3 hours of waiting taking you into a room where someone sells you overpriced add-ons for the milk. I don't fault business for trying to make money but I do fault them for getting so greedy that it angers customers when they find out the actual worth of their purchase. That is why I think customers need to be better informed and prepared. > "Pocket the difference" >Yep, that's called (gasp) making a profit. >When you buy a gallon of milk, the store marked it up from what they paid for it and they >"pocketed the difference".

  • isellhondas isellhondas Posts:

    All the customer has to do is simply say NO to unwanted accessories and alarm systems. I know as a customer, if I get "angry" I simply walk out.

  • henryn henryn Posts:

    > All the customer has to do is simply say NO to unwanted accessories and alarm systems. >I know as a customer, if I get "angry" I simply walk out. There are other things you can do, other than just "walk out". Back in 1993, the wife and I were shopping for a new custom van, primarily looking at 3/4 ton Chevys. We found the one we wanted, at a dealership about an hour's drive from our home. The price was reasonable, but they were low balling our trade-in, so we left. Two days later, the salesman calls me back, says they are prepared to go an extra $1k for our trade. We drive up afer work, a full hour's drive one way. When we get there, the sales manager comes out and deliberately insults my wife and I, saying "If you can't afford the new van, why don't you look at used ones?" I'm sure this was a deliberate ploy on his part, make me mad, make me want to prove that I could afford it. But this time it backfired. I stood in the middle of the showroom floor and cursed him and everyone in the dealership for 15 minutes until the police arrived and escorted me out. And no, I did not get arrested. The police officer shook my hand and said he admired me for telling the "$#&$^%" what I thought of them. And the dealership most certainly did not want to press charges. Imagine how that would have looked on the evening news! The only way all of this is going to change is when they (the car manufacturers) start selling the cars directly. And I do believe that day is coming. Tesla is the future.

  • isellhondas isellhondas Posts:

    Well, I can't say that I blame you. I would have omitted the cursing part but I would have let that Sales Manager know what I thought of him in no uncertain terms. In 1993, Al Gore had yet to invent the internet so writing a bad review wasn't possible like it is today. I know I've left some glowing reviews and a few bad ones. You could be correct about selling cars directly. Every one pays MSRP and leaves happy!

  • That's not true. I was on the internet in the late 80s. :). Any kind of 'reviews' back then, or any advice for car shoppers, were quite primitive--mostly buried in forums that held only text messages.

  • bkhart54 bkhart54 Posts:

    Buying a new or used car is still one of the worst business transactions in America. I sold both for a six month period at a defunct Saturn Retail Store as I waited for a security clearance upgrade. The Saturn model worked great. Set price, same price, no one feeling or being ripped off. So, why not do this everywhere? Money. "Dealers" want to control the pricing process inorder to make as much money as possible. Never mind how many future sales are lost because a buyer felt robbed (even if they weren't). We are blessed to live in a land with so many transportation choices. Automobiles are engineering marvels yet we continue to sell and buy them using archaic, outdated processes. "Zimtheinvader" mentions using Edmunds as "protection" against dealer mischief, a service paid for by the buyer. This is fine, but, can Edmunds or any other "watcher" know the true cost of a vehicle? Dealerships make arrangements with manufacturers all the time for additional money or lower unit pricing if the dealership can move a certain number of models or generate new business. The larger, big-name dealerships negotiate independent "deals" with manufacturers because they move a high number of units every month! Car salesmen, lawyers, and politicians earn their reputations as the most despised people on the planet. It is easy for car salesmen to remove themselves for "the bottom three". Openness and honesty is all that's required. Sadly, lawyers and politicians will always be nothing but bottom feeding, urine swilling, back-stabbing, sub-human devourers of excrement.

  • henryn henryn Posts:

    @bkhart54 - don't hold back! Tell us how you really feel!

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