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New Year, New Car!

PFCU Credit Union Helping Me in 2023

Buying a new car can be so exciting! But it’s also a complex process. If you don’t plan correctly, you could end up overpaying thousands of dollars or being trapped in a long-term relationship with a vehicle you don’t like. Below are 10 mistakes that car buyers often make when searching for a new ride:

  • Spending more than necessary. Every dollar you spend on a car is money that you can spend on something else (or save). An excessive car payment may also mean trouble later, especially if your employment or car insurance situation changes. 
  • Buying based on monthly car payment rather than total cost of ownership. A seemingly affordable monthly car payment does not include additional costs such as interest, insurance, gas, and maintenance. A longer loan may mean that you owe more than your car is worth.
  • Not having your financing ready. Know in advance what you can afford and shop local banks and credit unions for the best loan deal before you shop for the car.
  • Not researching your purchase. There's no reason to shop for a car without a target price, buy a car that's a known clunker, or to be surprised by fuel, insurance or depreciation costs after the purchase.
  • Skipping the test drive. It happens all the time - people buy a car that they will own for years without taking a test drive. Or they just drive the car around the block. Make sure the car meets your expectations in a variety of driving conditions.
  • Not performing a mechanical check of used cars. A mechanical inspection can give you more information about potential expenses you may incur sooner than later (new brakes for example). A mechanical inspection may also give you the knowledge you need to negotiate a better deal.
  • Impulse buying. Being pressured to make a purchase on the spot is a great way to pay too much for a car. At the very least, take a night to consider your purchase and an hour or two to call around to other dealerships to get prices for similar cars.
  • Trading in your car rather than selling it yourself. Whether or not saving money is worth the time and effort of selling your car independently is a decision only you can make. If you are considering trading in your car, you can also ask for two price quotes – one including the trade in and one not. Then you’ll see the actual price you’re getting for your old car.
  • Forgetting that buying a car is a financial, not emotional, decision. You may absolutely love one particular car, but is it the best financial decision for you? Even if you find a car you love, take a night to sleep it over before making your decision - chances are it will still be there tomorrow.
  • Getting an insurance quote after buying the car. Insurance rates can vary considerably between cars. High rates may also cause you to skimp on coverage that you would need in the event of an accident. Get insurance quotes before shopping.