Mistake 1: Talking too much
There are three things you should never say: "I need this car right now" (need drives up the price); "I really love this car" (if emotions control the transaction process, it only makes you more vulnerable); and "This is the maximum amount I can pay per month." (Once a dealer knows how much you want to pay per month, they will come up with other ways—fees, security deposits, financing, etc.—to make up the difference. You should negotiate the absolute price of the car, not the monthly payment.)
Mistake 2: Not doing your homework beforehand
It is not a good idea to walk into a dealership without doing your research and listening entirely to the salesperson's pitch—this is likely to make you vulnerable and lead you to impulsively buy a car you don't need, can't afford, or don't actually want. Checking information and understanding the price of the car you want to buy will help you know how to bargain. Some media outlets may provide valuable references: Kelley Blue Book, NADA Guides, Cars.com, AutoTrader.com, and Edmunds.
Mistake 3: Having unrealistic expectations about your true needs
Before stepping into a showroom, it is best to take the time to carefully consider your driving habits. Do not take it for granted that you need a brand-new car; think about your driving schedule for a week or even a month, and figure out the time, location, and length of your daily commute. Then, buy a suitable car based on these needs. Never impulsively think: "Maybe one day I'll want to tow a boat, so I need to buy a truck with a 3-ton towing capacity."
Mistake 4: Leasing a car because you can't afford the down payment
Leasing a car, especially a luxury car, does not require a down payment, and monthly payments are generally cheaper than buying a car. However, this may not be right for you. You need to determine if you want a new car every two to three years; there is no down payment, but you do not have ownership, and it does not count as your personal property.
Mistake 5: Assuming you must use the dealer's financing method
Dealers often set a monthly payment amount, assuming they will make up the difference in the financing method. Instead, it is better to arrange your own financing through your own bank or other credit institutions, and choose a short-term auto loan. Long-term contracts allow consumers to buy cars they cannot actually afford, and by the time the loan is paid off, the car may have completely depreciated.
Mistake 6: Buying a car at the beginning of the month
Dealers do not offer the best promotions until the end of the month to meet their monthly sales targets. So, try to be patient.
Mistake 7: Buying a car at the beginning of the year
Dealers generally do not offer any promotions at the beginning of the year. At this time, they have a large inventory of new models and 12 months to meet their annual targets. But by December, they have to clear out stock to meet their goals. This is the best time to buy a car.
Mistake 8: Discussing a trade-in agreement while negotiating for a new car
You should certainly be honest and state that you may have the intention of trading in an old car. But remember, the negotiation for buying a new car and the trade-in should be separate. If you mix the two, the dealer is more likely to deceive you on the actual amount you are paying for the new car.
Mistake 9: Assuming hybrid cars are greener
Hybrid electric vehicles are more energy-efficient than gasoline-powered cars of the same model, but they do not provide huge benefits: the Mercury Milan hybrid (41 city/36 hwy) priced at $28,180 only offers 2 mpg more on the highway compared to the Milan I-4 (23 city, 34 hwy) priced at $21,860.
Mistake 10: Only looking at one dealer
You should look around and compare prices at three different places. The more information you have and the more you know about the promotional policies offered by various dealers, the more confident you will be when actually making a purchase, which will help with bargaining. If you live in a small town with only one showroom, you might want to call and ask about the situation at dealers in nearby metropolitan areas (prices in metropolitan areas are usually lower than in rural areas), and then you can try to ask if the local dealer can offer the same price.
