10 myths about buying used cars you shouldn’t believe
Buying cars always has its share of popular myths and beliefs. You may have heard from the grapevine that the best time to buy a car is in August, or the end of a month, or even a holiday. Some beliefs have ingrained themselves into the minds of countless car shoppers.
These car buying mantras have been widely accepted everywhere as a part of the car buying process. In this article, we debunk some popular car-buying myths by providing solid facts rather than baseless conclusions. It is always better to be careful rather than sorry, even if you are considering buying used cars.
The best time to buy a car is at the month-end
Car sellers work on a clear propaganda when it comes to selling their automobiles, to meet a predetermined quota set by the automaker. By fulfilling these quotas, the sellers receive their share of commission during the end of the year, quarter or month. So normally this myth came into place that the best time to buy a car is during the end of the month. Car dealerships are determined to meet their manufacturer’s sale targets, so they entice you with a mouthwatering deal if that car is in stock.
However, in the case of popular cars like the 2021 Honda Accord, dealerships may have already met their monthly goal or they may not have that at all. In this situation, the deal that you get on the last day of the month will be the same as the deal on the first day of the month. On the contrary, if you do conjure up a deal, you may have to compromise on your favorite car color and accessories, as they may not be available. Our advice is to always buy a car when you are ready with your finances and research, regardless of the day.
Buying a used car saves money
While considering a used car, there is always the matter of depreciation on hand, which ends up saving you a substantial amount of money compared to a new car. However, used cars require a lot of financing, which may end up costing you more in the long term. For new cars, dealers offer more financing options like cash rebates to convince you into buying new.
A lower loan rate may be the best deal you can get while settling for a new car. Also, the bigger difference in the interest rates between new and used cars ends up saving you more money if you settle for new ones. With great negotiation skills, you can unlock more incentives.
Buying a new car saves more cash in the long term
A new car always has that fresh scent of paint and a plethora of new technology inside that makes you feel on top of the world. People believe that new cars are more dependable than old cars, but that isn’t necessarily true. As car automakers step up their game with their manufacturing quality, used cars are more dependable than ever before. New cars always face the inevitable depreciation arc, as the car loses 30% of its value within the first year of ownership.
There is also a common myth that new cars are easier to maintain. However, this isn’t always true as even used cars today require the same level of maintenance as new cars. Besides, most used cars from 3 years back have the same level of features as a new car and they are available at a much lower sticker price. This may help you save thousands of dollars.
Red cars cost more to insure
The red color is largely associated with a sign of danger, so people have a weird belief that red cars cost more to insure. Practically speaking, the color of your car doesn’t affect the cost of your car insurance.
As a matter of fact, car insurance companies don’t even inquire about the color of your car. Thus, people tend to avoid buying red cars, meaning you can get such cars at a lower rate. This may help you save money.
I have no idea of negotiating good deals
Although a car salesman may know more than you, it doesn’t hurt to research a car and your area prices beforehand. This may help you to better understand if the deal is worth your time or not while negotiating with a used car seller or a private dealer. The key here is confidence and holding your ground if you feel the deal isn’t right. You aren’t required to buy a car on the spot, and you can always walk out to search for better alternatives out there.
I can negotiate myself a great deal at the dealership
While confidence is always appreciated, overconfidence may be your downfall while negotiating yourself a deal. Car salesmen know better than you as they have been invested in this field for years. Their experience involves hundreds of transactions every month. The solution here is to get all your facts right before arriving at the dealership and to bring an experienced acquaintance with you as well to place more weight on your opinion.
Always buy online for the best value
Most online shopping websites like Costco, AAA, or TrueCar entertain a preset price for a specific vehicle. Buying online also affects the interest rate on financing, trade-in price, upgrades, and an extended warranty. Negotiating all of this online may be a bit troublesome for first-time buyers.
Always buy with cash
Payment with cash can sometimes offer you a great deal while buying a variety of stuff, but the same cannot be said about cars. Automakers today hardly offer any cash-only incentives nowadays.
Also, the dealership often has a tie-up with finance companies, which ends up making it more money in the process. If you offer to pay with full cash, the dealer may be hesitant to offer you a discount.
If you buy a car, you can afford it
Finance experts at car dealerships often end up convincing you to buy a car even if it doesn’t fit within your budget. They suggest loans and a number of financing options to sweeten up the deal.
Even if the car looks affordable on paper, you shouldn’t settle for it if the overall price is too high for you. Almost no one enjoys paying extra 2 to 3 years of loan payments when in the end you pay more for the car than its actual overall value.
If you can afford a car, just go for it
If the car fits in well within your budget, it isn’t always necessary that you should consider buying it right away. The deal that you get today will probably be the same even if you come back another time around the month. It is extremely important to know the “true cost” of your car.
Always consider the overhead costs like depreciation, loan interest, taxes, fees, insurance, fuel, maintenance, and repairs before finalizing a car deal. These costs constitute a major part of your car budget, so make sure to factor them in before making a final purchase.