You have done your homework and found a reliable used car. In fact, you’ve even done the legwork to compare the vehicle’s market value against other similar cars, and you have shopped around for the lowest financing rates. This means the hard part is over, right? And now, getting a great deal on that used car should be as simple as signing your name.
Not so fast – Unfortunately, there are still a few mistakes you can make which may result in driving up the price tag. Below is a list of five mistakes that could quickly turn your excitement into buyer’s remorse:
- Letting the dealer payoff the remainder you owe on your trade-in: Some dealers offer to pay off the remainder you owe on your trade-in. Unfortunately, this offer is not as great as it sounds. What happens is the remaining amount of what you owe is rolled into the new car loan. For example, a $25,000 sedan you bought could carry a loan balance of $28,000 to cover the $3,000 you still owe on your trade-in.
- Financing a 6-year or 7-year loan: Low interest rates are not the only part of the loan to consider. You also need to take a long hard look at the length of the loan. A 72-month or even 84-month loan will wind up costing you significantly more than a 60 or 36-month loan.
- Not taking an extended test drive: Always take the car for an extended test drive, even if it has been thoroughly inspected and has a high reliability rating. Short 30 minute test drives are simply not enough time to get an understanding of how the car drives under real-world driving conditions. By taking a test drive that last a couple of hours, or even keeping the car overnight, you will be able to better tell if you will enjoy driving the vehicle.
- Not considering the cost of insurance: While the sticker price may be low, the car insurance may be more than you expect. Sports cars and vehicles that are common targets among thieves will often come with a higher insurance rate. To avoid this, be sure to call your insurance company before making any decisions.