Four Huge Car Buying Mistakes

You're at a point where you have done your research and have found a pre-owned vehicle you want to buy. You probably have even compared the price to similar cars, and have hopefully looked for the lowest rate for financing a vehicle. It's all downhill now, right? Getting a great deal after all this work should be as easy as signing on the dotted line.

Hold on for a second, there are still some very costly mistakes that can raise the amount you pay for the vehicle drastically. Here are 4 common mistakes that will turn a great buying experience into a nightmare very quickly:

Having the dealership payoff the balance of your trade-in: Dealers will offer to pay the remainder of your loan on your trade in. The problem is that the offer is not as great as it seems. The dealer will pay off your trade but the balance above what the vehicle is actually worth will be rolled into your new loan amount. As an example, a $30,000 car you buy can actually have a loan balance of $35,000 to account for the $5,000 you still owe on the car you are trading in.

Having a 60-72+ month loan: Getting the best rate is only one part of getting a great loan. You also need to put quite a bit of thought into the length of the contract. A 72 month or longer loan will end up costing you much more than a shorter loan. A common rule of thumb amongst finance gurus is to only buy a car that you can afford at a 48 month or shorter term.

Not doing a quality test drive: We have talked before about the importance of a test drive and what to look out for, we will go over it again (yes, it's that important!). Always take the car you're considering buying on a long test drive. Even if you have already had the vehicle inspected and it's considered a quality brand. A shorter test drive does not give you enough time to understand how the car reacts under all driving conditions. By taking a longer test drive you will be able to check for any faults of the vehicle and truly evaluate long term comfort of the vehicle.

Not getting insurance quotes up front: Even if everything else is perfect and in your budget, car insurance might be much more than you're budgeting for. Sports cars and vehicles that are targets among car thieves will come with a more expensive insurance cost. Don't fall into this trap, call your insurance company (and a couple competitors) and get quotes before signing on the dotted line.

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