Car buying is a stressful process. You’re forced to make important decisions in a very short amount of time, and the dealership wants you to make those decisions on impulse.

It’s no wonder so many people walk away feeling as though they got ripped off. We’ve put together this list of common car-buying mistakes and how you can avoid them:

10 Things You Didn’t Know About Buying A New Car

Takeaways
Car buying can be complex, but education and research can help protect you from scams and ensure you get the best deal.
When buying a car, it’s important to consider factors like your budget, the type of car you need, and the condition of the vehicle.
Financing options for car buyers include auto loans from banks and credit unions, financing from car dealerships, and lease options.
Negotiating on the price of a car and any financing or add-ons offered by the dealer requires research and preparation.
Before purchasing a used car, having the vehicle inspected by a trusted mechanic can help identify potential issues and ensure you pay a fair price.

Table of Contents

1. Some Cars Are Much More Expensive To Insure

Some cars are much more expensive to insure than others, and it’s not just because of the kind of car you’re driving.

Insurance companies have access to data on how likely a car is to get into an accident or be stolen, and they use that information when setting their rates.

If your insurance company thinks your ride is more prone to accidents, whether because of its size or otherwise dangerous design elements (think spoilers), then you’re going to pay extra for coverage.

According to our Ultimate Car Buying Checklist, it’s important to research the car you want and the dealership you plan to buy it from. This can help you avoid getting scammed and ensure that you get the best deal possible.

2. You May Not Have To Put Money Down

Some dealerships will let you drive away with the car with nothing down, but this is rare. In most cases, you will need to pay at least a deposit as an indication of your intention to purchase the vehicle and make monthly payments on time.

This can be negotiated during negotiation of the purchase price or trade-in value of your current car. The amount you put down is usually negotiable; if a salesperson tries to tell you otherwise, find someone else who will negotiate with you instead of listening solely based on what they say is their policy (which may not actually be).

Putting down more money up front means that there’s less risk for the dealership and its lender if things go wrong (like missing payments).

The more money that’s invested upfront—whether it’s through financing or cash—the better interest rate buyers get overall (and lower monthly payments), because lenders know that buyers won’t default without significant effort first.”

When it comes to car buying scams, knowledge is power. Educate yourself on common scams like bait and switch and spot delivery fraud, so you can protect yourself and your finances.

3. The Sticker Price Isn’t The Real Price

The sticker price is just a starting point. The sticker price is the amount the dealer paid for the car, but it doesn’t take into account any fees or other costs associated with selling that vehicle. While some dealerships will include these fees in their asking price, others may not.

The sticker price isn’t the real price of most cars either; it’s usually inflated to cover various expenses and make a profit on top of that amount. Before you negotiate a final price, ask yourself if this number matters at all—and if so, how much?

4. Buying A New Car Doesn’t Guarantee A Warranty

If you’re buying a new car, you may be able to take advantage of the manufacturer’s warranty. Warranties usually cover parts for up to three years and up to 36,000 miles of use. You can often extend this coverage for a fee.

There are also some manufacturers that offer limited warranties on used cars, including:

Ford 5/60k Powertrain Limited Warranty
Chevrolet 3/36k Powertrain Limited Warranty (for vehicles with less than 80K miles)

5. You Can Buy An Extended Warranty On Almost Any Car

You might already know that you can get an extended warranty on just about any car, but did you know that it doesn’t mean much?

An extended warranty is essentially a bunch of insurance policies that are bundled together. You pay a flat fee, which will cover repairs for a certain amount of time—usually three years or 100,000 miles (whichever comes first).

And since the prices for different warranties can vary greatly from company to company, it’s important to do your research before buying one.

A regular warranty covers the same things as an extended one: namely, parts and labor costs associated with any defects found in the car during its first few years after purchase.

So if something goes wrong with your new ride within those first few years and requires maintenance work performed by an outside service center (as opposed to being fixed at a dealership), most automakers will cover those costs under their standard factory warranty policy anyway.

Want to finance your next car purchase? Our guide on the smartest way to finance your car purchase can help. From understanding interest rates to improving your credit score, we’ve got you covered.

6. Used Cars Are Getting Better And Better

You can get a better deal on a used car than you would on a new one. The best way to save money is to buy your next vehicle used.

Not only do you not have to pay the manufacturer’s markup, but you’ll also be able to find more vehicles in your price range.

And since most people drive their cars until they’re falling apart, the timing may be right for upgrading to something nicer than what you currently have—but without having spent too much out of pocket at once!

The only downside: there are fewer features available on older models than there are on newer ones (though this is changing). But if you’re looking for practicality over bells and whistles, then buying preowned might be your best bet!

7. Buying A Used Car Doesn’t Mean Buying Someone Else’s Problem

Used cars, despite their reputation for being unreliable, can often be better than new cars. The average used car in the U.S. is driven for 11 years, but it spends 15 years on the road before being scrapped and recycled into parts for new models.

New cars lose value as soon as you drive them off the lot (and sometimes even before), but used cars tend to retain more of their worth over time — at least until they get too old to drive safely or legally on the road.

If you pay attention to what kind of car you buy and how much mileage it has on it, then you can get a great deal on something that will last longer than a brand-new vehicle would have lasted anyway!

That way, when those vehicles do finally come off your hands after years and years of use later down the line — whether through sale or trade-in — they won’t depreciate nearly as much as they would have if they were still too new when sold/traded-in by then anyways.”

Don’t get taken advantage of when buying a car. Check out our guide on avoiding common car buying mistakes to get insider tips on negotiating a fair deal, verifying the car’s history, and avoiding hidden fees.

8. There May Be Benefits To Buying At The End Of The Month Or Year

You can get a great deal on a new or used car if you go shopping at the end of the month or year. At that time, dealers are usually trying to meet their monthly quotas and will be willing to negotiate on price. If you’re buying after the end of year, dealers might also be anxious to sell off inventory before they have to pay steep taxes for it.

9. Buying Is Sometimes Cheaper Than Leasing In The Long Run

There’s a good chance that, when you hear the words “lease,” your mind automatically goes to the monthly payment. You picture a shiny new car with low payments and no responsibilities beyond taking it in for regular checkups. But leasing may not always be a bargain over the long run.

You might think that leasing is cheaper than buying because of lower monthly payments—but that’s only true if you don’t factor in the cost of depreciation (the difference between what you paid for it and how much its market value has declined) over time.

What’s more, there are other ways to save money on your lease payments by purchasing your vehicle outright through financing or even trading it in early for something else entirely.

	Buying	Leasing
Upfront Costs	Requires a down payment, taxes, and fees.	Requires less upfront costs and may only require a security deposit and/or the first month’s payment.
Monthly Payments	Often higher than leasing payments.	Often lower than buying payments.
Ownership	You own the car and can keep it as long as you want.	You only have the car for the life of the lease and must return it or lease/buy a new one when the lease term ends.
Mileage Limits	No mileage limits.	Comes with mileage limits and charges fees for exceeding them.
Maintenance and Repairs	You are responsible for all maintenance and repairs.	Often covered by warranty for the duration of the lease.
Resale Value	Depreciates over time, but you can sell it whenever you want.	No resale value since you don’t own the car.
Long-Term Costs	Can be cheaper than leasing in the long run, depending on how long you keep the car and how much it depreciates.	Can be more expensive in the long run if you continue to lease and never own a car outright.

Note: The above data is based on general industry trends and may vary depending on the specific car model and leasing/buying terms.

10. Leasing Isn’t Always So Bad

There are some people who should never lease a car. In many cases, they can’t afford to do so because of the high monthly payments and down payment required by most leasing companies. There are also some situations in which you might want to stick with buying a new car instead of leasing it.

For example, if you prefer driving a practical vehicle that will last for many years without breaking down or requiring costly repairs, leasing probably isn’t going to be right for you. You may end up paying more than twice as much per mile as someone who bought their car outright and then kept it for 10 years or longer!

11. Your Trade-In Might Be Less Valuable Than You Think

You’re not the only one who thinks that your car is worth a lot of money. Probably, you think it’s worth more than it really is.

That means your trade-in might be less valuable than you think.

Trade-in value is based on the condition of your car and its demand in the market, which can vary from one year to another (especially if new models are being released).

Last year was a good time to buy a used car, but now that everyone has bought them up, there aren’t many left for sale. This puts pressure on their prices—and your trade-in value will likely reflect this change in market conditions as well!

Looking to score a great deal on your next car purchase? Our guide on the top 15 ways to score a great deal on your next car purchase offers practical tips on researching pricing, timing your purchase, and negotiating like a pro.

12. A Low Interest Rate May Not Always Be Best For You

You already know that getting a lower interest rate is better. That’s why you’re reading this article. But sometimes, it’s not the best decision for your budget.

First, let’s talk about affordability. When you buy a car and finance it, there are three main costs: car payments (the part where you pay money to the bank), insurance premiums and gas expenses—all of which will vary depending on the type of vehicle you choose.

You want to make sure those costs aren’t going to eat up all your income every month so that you can still pay rent or feed yourself without worrying about falling behind on bills because of an unexpected expense like repairs on your car or getting into an accident while driving uninsured (and thus having major medical bills).

The next thing to consider is how long it will take before selling the vehicle will recoup its purchase price—in other words, whether or not selling would be worthwhile at all given time invested in fixing things up before putting it back out onto the market again with another owner who might use those repairs as bargaining chips during negotiations over price reduction terms.”

Pros	Cons
Can reduce the total cost of your loan	Low interest rates may only be available to individuals with excellent credit scores
May allow you to afford a more expensive car	Longer loan terms with lower interest rates could mean paying more interest over time
Can offer more flexibility in terms of financing options	Low interest rates may be tied to specific dealerships or car models

Note: The above table is data-driven and based on general market trends. Different lenders and dealerships may offer different interest rates and terms. It’s important to research and compare options before making a final decision on financing.

13. The Trade-In Value Of Your Car Is Just An Offer, Not Etched In Stone

You can find out what a dealer will pay you for your trade-in, but that’s only an offer. It’s not etched in stone and there’s room to negotiate. Don’t be afraid to ask for a better deal on the trade-in value of your car and remember that it doesn’t hurt to ask!

Conclusion

One of the most important things you can do when buying a car is to get educated. The more you know about what makes a good deal, the better equipped you’ll be when negotiating with dealers or private sellers.

We hope these tips help make your next car purchase a little easier on both your wallet and your nerves!

FAQs

What should I look for when buying a car?

When buying a car, it’s important to consider factors like your budget, the type of car you need, and the condition of the vehicle. You may also want to research factors like the car’s safety rating, fuel efficiency, and resale value.

Should I buy a new or used car?

The answer to this question will depend on your individual needs and finances. New cars generally come with more advanced features and a factory warranty, but they also come with a higher price tag. Used cars can offer more value for your money, but it’s important to have the car inspected and check its history before making a purchase.

How can I finance my car purchase?

There are a variety of financing options available for car buyers, including auto loans from banks and credit unions, financing from car dealerships, and lease options. It’s important to consider the total cost of the loan, including interest and fees, when determining which financing option is best for you.

How do I negotiate the price of a car?

To negotiate the price of a car, research the car’s market value, be willing to walk away from a deal if it isn’t fair, and be prepared to negotiate on the price of the car, as well as any financing or add-ons offered by the dealer.

Should I get a car inspected before buying?

Yes, it’s always a good idea to have a used car inspected by a trusted mechanic before making a purchase. This can help you identify any potential issues with the car and negotiate a fair price based on its condition.