subject: Avoid These Mistakes Made By Car Buyers [print this page] A lot of people who buy cars do so blindly, without considering some of the vital aspects like car payments, maintenance and upkeep. All they think of is that they like the car and want to own it.
Most of the time, car buyers make some common mistakes that can cause them financial distress after they have bought it. Given below are five of the most common mistakes made by car buyers, and you, as a buyer, can easily avoid them.
1)The most common mistake you can make is to go in for a car that costs more than you can handle financially. We suggest that if you are in the market for a new car, dont spend more than 15% of your monthly income after taxes.Multiply your after tax pay by 15%. If you are planning to make monthly payments on your car, the payment should not exceed the amount you come up with.Also, you have to take into account factors like car insurance and payments for repairs and maintenance.
2)It is possible for you to obtain a car loan for up to six years, which is 72 months.The majority of people opt for the five year plan (60 months).The longer the duration of the loan, the more you will have to pay in interests and related fees.Moreover, in the case of a five year loan, the value of the car will have depreciated by the time the loan is paid off.It is much better to opt for a three year (36 months) or a maximum offour year (48 months) loan period.
3)Your newly purchased car starts depreciating the minute you drive it off from the lot.It goes on depreciating quite a lot for the first twenty four months.If this is financially difficult for you, then you should consider going in for a used car.However, if you tend to be particular about what you want and would rather have a full warranty, then it would be better for you to buy a new car.But be sure that you are able to do this financially.This is another instance of the mistakes car buyers make, just because they have decided to buy a new car.
4)Very often, car buyers dont know if a car rebate or a low interest rate would be financially better for them.To avoid this common mistake, you need to calculate and see what would be more beneficial for you.
5)You have to avoid another common mistake, and that is going in for an upside down car loan; this is a loan in which the car debt is greater than the current value of the car itself.In such a case, you have to settle for a car that costs less, or go for a used car which is not more than two years old, where you will be able to pay off the balance much quicker.It will not be in your interest to trade it in, because you will still be owing more than what it was worth, and you are likely to lose money by doing this.
So factor in these aspects when you are thinking of buying a new car and do your homework carefully you will be a better car buyer if you do so.
