The Top 5 Myths about Buying a New Car
Buying a New Car
Buying a new car can be rather painstaking especially with the mundane and absurd myths flying around. These beliefs may seem harmless but can end up wasting your time and money in the buying process. Therefore, we’ve outlined for you the top five car buying myths to look out for to avoid last minute inconveniences when purchasing a new car.
1) The Web Has the Best Deals on New Cars:
The internet is full of brokers and dealerships who will sell your information to the auto dealers at a preset price for your desired vehicle. This means that in most of the cases the online dealers don’t have the car. However, assuming that they do, the only thing you will agree upon with regards to the car sale is its price. Other vital aspects such as extended warranty, interest rates, and trade-in price are left out of the discussion. We recommended that you use the internet only to get more information about the approximate figure to pay. However, do not assume that the web deals are fully negotiated or will save you time and money. That is never the case most of the times.
2) Paying in Cash Lets You Purchase the Car Cheaply:
Paying cash may be advantageous in certain scenarios, but not when buying a new vehicle. It only works when the auto dealers offer incentives for cash payment during purchase. Dealerships are incentivized by banks to finance the car and may even lower the interest rate for you to pay to increase their profit on the transaction. This shows that these dealers benefit more when you lease or finance the car. Consequently, they will be less motivated to discount the vehicle further when you pay cash. Therefore, chose the appropriate financing plan such as a vehicle title loan to get you the car at a better price.
3) Car Dealerships Have Massive Markups on New Vehicles:
A few new vehicles usually have more markups than others. For instance, in most dealers, a large diesel truck is prospected to have more markup than a compact car. It is through this theory that most people believe that new vehicles have thousands of dollars in markup. The truth is that dealerships average less than a thousand dollars in gross profit for every transaction.
4) New Vehicles Face a Depreciation of Fifty Percent the Moment You Leave the Dealership:
New cars are bound to depreciate from their daily utility. However, 50% is way too far a stretch. Also, once you exit the dealership with the car, its resale value drops. It is, therefore, important to establish how long you want to have the vehicle as well as its total cost of ownership. If you want to possess the car for over ten years, the depreciation rate does not matter. Besides, you will have to pay a premium for a new vehicle as compared to used ones, but the cost of ownership is relatively lower.
5) Visit the Auto Dealership on Rainy Seasons or Holidays:
Most people perceive that when the dealer is receiving fewer customers due to bad weather, the prices will go down. It may be true except for the fact that other car buyers have the same thought too. This leads to a rush to the dealerships at these times, making rainy seasons and holidays just as busy as other business days. The best time to purchase a car at a lower price is at the end of a model year. When a model is about to be faced out by an upgraded or new model, its price will go down significantly. Also, end month makes a prime time to make a purchase. Dealers have monthly quotas to reach which are integral to their profit margins. Towards end-month, they will do anything to reach the quota if they were just a few sales off.
For great car deals, it is imperative to check out the internet quotes. However, make sure to visit the dealership for further negotiation on other sale aspects.
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