Automotive Loans: Top 5 Mistakes When Buying a Car

(1/31/2013) Buying a car can be a stressful prospect. Those looking to purchase and finance a car have consistently made mistakes that can put them in a difficult financial position or, at the very least, make them regret their decision. If you're looking to buy a car and get an auto loan, avoid these mistakes to make the process better and purchase a good car for you.

• Forgetting to research. The more you know going into a purchase, the better shape you will be in financially and mentally. Online research will reveal important information on typical prices, current rebates and incentives, market interest rates, and buyer reviews, all of which can help you make a better car selection and obtain the best price.

• Thinking short term instead of long term. When financing a car, many people opt for less money down, saving money now but increasing the amount paid over the life of a loan. At the same time, buyers will often take the short-term convenience of taking whatever loan is offered by the dealer. Shopping around for loans ahead of time, however, can save thousands over the long-term.

• Thinking monthly payments instead of total cost. Calculating the cost of a specific car, and whether you can afford that cost within your budget, is tricky. Most buyers focus on the monthly payments with a certain car and loan, and forget about the other costs of ownership — gas, insurance, taxes, regular maintenance, and repair. Neglecting to consider these costs can mean purchasing more than you can really afford.

• Focusing on flash. Your car purchase should be primarily based on need rather than want. While sports cars are attractive and seem fun, if you have a large family or a limited budget it doesn't make sense. Alternatively, while bigger cars and SUVs may be popular, if you don't drive very often and rarely haul a lot of people or things they're an expensive impracticality. At the same time, buyers can easily get distracted by specific rebates and promotions, buying a car that may not be ideal for them because there's a deal going on. Instead, focus on what you need and keep other distractions at bay.

• Accepting a car's story. When buying a used car, don't simply accept the history provided by an individual or dealer. Check the vehicle history report and inspection report to ensure you know about any accidents or other damage, as well as any mechanical issues that exist. History reports are available from dealers or Carfax. For inspection reports, be prepared to bring in a mechanic to conduct an examination for any privately sold cars.



For Additional Reading:

10 Common Car Buying Mistakes:

Top 5 Worst Car Buying Mistakes:





Other related articles:

Automotive Loans: Shopping Online

Automotive Loans: Car Buying Incentives

Automotive Loans: Should You Buy New or Used?

Automotive Loans: Negotiating a Loan with a Dealer

Automotive Loans: How Much Car Can You Afford?

Automotive Loans: Buying Vs Leasing

Automotive Loans: Applying for a Car Loan

Avoid advertised auto trade-in, loan pay-off rip-offs

Auto sales, loans hit the speedway

High MPGs and low auto loan rates can save you thousands of dollars

Research your options when shopping for an auto loan

How to drive a hardauto loan bargain

Special Report: Hitting the Brakes on Auto Dealer Loans

Buying vs. Leasing: A Comparison

Closed End Lease or Open End Lease

Amy Lillard A frequent contributor to ERATE® since 2006, Amy Lillard is a freelance writer specializing in turning complex information into useful tips and tricks for readers. For questions or topic suggestions, contact Amy at [email protected].

New and Used Auto Loan Rates

Choose Your State Below

Auto Loans - Hawaii Auto Loans - Alaska West Virginia Auto Loans Virginia Auto Loans District of Columbia Auto Loans Maryland Auto Loans Delaware Auto Loans New Jersey Auto Loans Connecticut Auto Loans Rhode Island Auto Loans Massachusetts Auto Loans New Hampshire Auto Loans Vermont Auto Loans New Hampshire Auto Loans Maine Current Auto Loans Vermont Auto Loans Auto Loans - New York Auto Loans - Michigan Car Financing - Wisconsin Auto Loans - MINNESOTA Auto Loans - Kentucky Auto Loans - Indiana Illinois - Auto Loans Auto Loans - Iowa Auto Loans - North Carolina South Carolina Auto Loans Auto Loans - Florida Auto Loans - Georgia Auto Loans - Tennessee Alabama - Current Auto Loans Auto Loans - Mississippi Auto Loans - Louisiana Auto Loans - Arkansas Auto Loans - Oklahoma Auto Loans - TEXAS Auto Loans - New Mexico Auto Loans - Arizona Auto Loans - Kansas Auto Loans - Nebraska Auto Loans - Colorado Auto Loans - Wyoming South Dakota Auto Loans Auto Loans - North Dakota Car Financing - Montana Idaho Car Financing Washington Auto Loans Auto Loans - Oregon Auto Loans - Utah Auto Loans - Nevada Auto Loans - California

Start by selecting your state