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10 May 2019 · New Cars

Top 10 Myths About Buying a New Car

There are a lot of myths about new cars being passed around that range from the mundane to those that stand out as simply ridiculous. The majority of these are harmless though, yet there are some that can cost you time and money in the long run.

In this article, we’ll take a look at some of the common misconceptions that people have when buying a car and clarify them for you.

1. Buy Today or Say Goodbye to the Deal

Unless the car you’re looking at is truly in limited supply or is on sale for a really good price, the odds are that you may still get the same deal a week later or even after a month. This may take a different form such as having a low-interest rate compared to a rebate, yet the total amount they’ll be asking for the car will still be roughly similar.

It’s important to keep in mind that you’re getting a car you want at a price that’s good for you. If you’re not going to get it, just walk away and find another dealer that can give you want you’re looking for.

2. Never, Ever Finance at the Dealership

As opposed to what’s often said, many dealerships today actually have agreements with local credit unions. This means that the buyer can actually get similar rated deals whether they get it from a financing agency or directly at the dealer.

Choosing to have your dealership finance can, in fact, save you time, money and effort in the end. There are also times wherein the rate may even be better!

3. The Internet is the Best Place to Get a Good Deal on a New Car

There are plenty of dealerships and brokers on the Web right now who sell your browsing data to auto dealers at a pre-set rate for the vehicle you want. Let’s assume that the dealership actually has the car you want in stock. The usual case here is that you’ll often end up paying for the price of the vehicle only. Other products such as the trade-in price, finance interest rate and even extended warranties still have to be negotiated.

You can still use the Internet to get yourself educated on what you should expect to pay. However, don’t think that this is going to be the full deal.

4. Special Ordering Your Vehicle Will Cost You More Money

For many models, you can, in fact, save more money if you choose to special order. This is especially true for European vehicles which allows customisation in numerous ways.

If waiting a few weeks isn’t that big of a deal for you, special ordering a new car could be a more suitable choice for you. It can also give you the exact choice that you want.

5. You Have to Get Your Car Serviced at the Dealership You Bought it From

There is a big percentage of cars that come in to get serviced at a dealership which wasn’t bought there originally, and it continues to happen. These dealers make a ton of money for just servicing cars alone and so they want to get their hands on as many as they can. There’s really no good reason why you should choose a mechanic closer to you and is more ideal for your needs than going to a dealership far away.

You can buy your car wherever would be most beneficial to you. Don’t limit yourself on this misconception as you can get your vehicle serviced wherever you want.

6. You Can Out-Negotiate or Trick the Dealership Into Giving You a Better Deal

There are hundreds of transactions being negotiated by these car dealerships every month. People only buy a new vehicle every few years or so. Even if you believe that you’re a smart negotiator, dealerships are going to have more data and will be the one in control throughout their transaction with you.

What you can do instead is to do your research beforehand so you can at least know whether you’re getting a good deal or being overpriced by the dealer you’re talking to.

7. New Vehicles Face a Depreciation of Fifty Percent the Moment You Leave the Dealership

Any car, whether new or old, will eventually face depreciation from being used. Half of its price range, however, is simply a stretch but it is still true that the resale value of a car drops off as soon as you leave with it. That’s why it’s important to consider how long you wish to keep the vehicle together with its total ownership cost. If you’re planning to use the car for more than 10 years, then depreciation isn’t of concern for you.

8. Paying in Cash Lets You Buy the Car at a Cheaper Rate

This myth about new cars isn’t true all the time. Although advantageous, paying in cash will only work during certain scenarios such as when the dealership offers incentives for cash payments. Many auto dealers are being incentivised by banks in financing new cars and may even decide to lower interest rates for a buyer to improve their profits for the transaction. This goes to show that dealers benefit more when you decide to finance or lease the car.

As a result, they will also be less likely to give you a discount if you choose to pay with cash.

9. Dealers Will More Likely Take You Seriously If You Tell Them You’re Paying in Cash

Most dealerships are already used to this tactic and won’t likely fall for it. Just like what was mentioned above, you shouldn’t assume that they’ll give you a better deal by stating you plan to pay in cash. In fact, they may choose another client that decides to get financing from them because it gives them more incentives in the long run.

10. Wait Until the Last Minute to Tell Them You Have a Trade-In

Again, dealerships have probably seen all the tricks buyers pull on them and this isn’t something new. This will only add more hours wasted at the dealerships since the trade-in evaluation isn’t going to begin until the rest of the deal has been set. Furthermore, it won’t likely change a thing in the final amount anyway.

What you can do instead is to do your research ahead of time, so you’ll know if you’re getting good value for your trade-in.