Do you know the most common mistakes made when buying a new car?

The new cars are coming and with it are all the billboards, glossy brochures and television commercials all meant to do one thing – to get you into the showroom.  So if this is the year for a new car make sure you avoid some of the most common mistakes people make when making their purchase.

Mistake #1:  Going in unprepared
Before you start looking do some research.  Check out consumer reports, resale value and automobile trade magazines to get reviews and general information on the makes, models and features for the cars on your list.  While you are at it, check out local reviews of the dealerships you are considering. 

Mistake #2:  Falling in love with the wrong one
If the picture in your head is of you driving down the Pacific Coast Highway with the wind in your hair but the reality is a car seat, family dog and grocery bags, stay clear of the models that really do not fit your lifestyle.  While it may be fun to test drive the car of your dreams you may end up with a broken heart, or worse, a car which only you will love while the rest of the family quietly (or not so quietly) steams every time they wedge themselves into your dream car.

Mistake #3:  Falling for the first dealership
Not all dealerships are created equal.  Just because they sell the same brand of vehicle does not mean they have the same pricing.  Shop around you may be quite surprised in the differences between dealerships.

Mistake #4:  No test drive
You think you have decided, you have done the research, figured out the deal you will negotiate, lined up financing, but do not forget the test drive.  If you have not driven the make and model of the car you are interested in take it for a good long spin to check for comfort, blind spots and drivability. 

Mistake #5: Negotiating in a bundle
Negotiating the deal is a bit like a card game – never show your hand all at once.  Start negotiating at the price the dealer paid, not the manufactures’ suggested retail price (MRSP).  Once you get a price you can live with, then ask for the trade-in-value of your car.  If you are considering financing through the dealership, wait until a price is worked out before you bring it up.  If you show all your cards up front you will lose much of your negotiating power and may end paying more than you have to.

Mistake #6: Not knowing the hidden costs
Once you think you have the price nailed down and before you sign on the dotted line be clear on the hidden extras the dealership will add.  Things like the “dealership package,” processing fees etc.  Review them carefully, as you may not need or want them.  Do not finalize negotiations until you know what else is in the final contract.

Mistake #7: Not shopping for financing and Mistake #8:  Focusing on the payment
Not all financing is equal and not shopping for the best deal can cost you money down the road.  Consider all your options and get pre-approved at The Credit Union before you start shopping.   Make sure you understand the total cost of the vehicle at the end of the term.  That means calculating the cost of the vehicle plus the interest and any other fees associated with financing.  If you are looking at more than one financing option, do the same for each and compare the total price of the car at the end of the term.  Lower rate loans do not always translate into the lowest price in the end.  As well, do not focus on the monthly or bi-weekly payment.  While it is critical you have a payment you can afford, it is just as important to consider the full amount you are paying over the term.

Mistake #8:  Forgetting about insurance
When doing research take the time to speak to your insurance agent about the insurance premiums associated with the cars you are interested in testing.  Premiums can be significantly different depending on the make and model.  This cost should be factored in to your budget.