Mistakes car buyers make

 May 19, 2015

It may be easier and more affordable than ever, but buying a new car can still be stressful. Every day car-buyers drive away with a gleaming new model, however many make basic mistakes when closing the deal.

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Rushing in and/or not doing your research
Impulse purchases can be great fun but with cars they can also be costly, landing you with a vehicle you may not need.
It's something Sydney mother Amie Easy learnt when buying her new SUV. With the registration running out on the family's old wagon she felt compelled to act quickly.
"We didn't have time to do much research because of our time constraints... In the end a lot had to do with price," she said. Amie says she is "really happy" with the car they bought but admits, "We should have bargained a bit harder... or at least got some more accessories".
A bit of forward planning can go a long way and there's never been more information available on the web including reviews from experts and drivers.

Don't forget the servicing
Buying a new car is only part of the deal. As you drive out with your shiny new set of wheels you're practically entering into a service contract that could cost you thousands.
But it's easy to estimate your liability. Each of the top 10 selling brands offers capped price servicing, with full pricing on their websites which will allow you to compare brands.
And keep in mind that high-powered or diesel model cars generally cost more to service.

The extras you didn't need
As a general rule, the best value car on the lot is the cheapest one. It will likely have less margin in it for the manufacturer and dealer, which means more metal for your money.
That's also why dealers will often be keen to step you into the more expensive model. Sure, it's got more features, but it also represents more profit for them.
Not that profit margins are necessarily huge for new cars. On cheaper models, many dealers lose money on the sale of a car (once you consider overheads), which is why they're keen to upsell you to high-margin extras such as paint protection or accessories.

Not worrying about the price of your old car
It's easy to get wound up in the negotiations on your new car and forget about the one you're getting rid of, as Amie Easy discovered. She was lured into the dealership by the new-car deal, but when it came time to trade in her old car she was only offered $1000.
"We probably could have got more if we shopped around or sold it privately, but it was a lot less convenient," she said.
The changeover price (the difference between new and old) is the only price you should be interested in, so start negotiating on the price of your old car as soon as you get to the dealership.
Better still, consider selling your car privately, because in most cases you'll get more for it.

Check when the car was built
We all know a newer car is worth more than an older one. But few people check exactly when their car was built at the time of purchase.
Cars have two plates under the bonnet – a build plate and a compliance plate. The build plate tells you when it rolled off the production line while the compliance plate tells you when it was certified for sale in Australia and the two dates can be months apart.
A car's year model officially goes off its compliance plate, but many dealers will value it off the build plate when you're trading it in.

Not shopping around on finance
You've gone for the test drive and even agreed on a trade-in price for your old car.
The next step is paying for it and, for most people, that means finance. Dealerships offer their own finance, usually backed by a major finance company and rebranded.
But that dealer finance includes a margin, something that will ultimately come out of your pocket. It doesn't mean you should avoid the dealer finance, but make sure you know what else is available.
If you're able to avoid these six common pitfalls then you – and your family – should be able to enjoy your new car guilt-free.


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