Buying the Wrong Car
Sometimes the car you want and the car you need don’t quite match up. If you go with your heart and not with your head, you might end up with a ride that looks great but can't handle your daily chores or costs too much to operate.
Before you buy, consider not just today’s needs, but your future car needs. While that subcompact Honda HR-V might just the right fit today, it may be too small as your family grows, so a Honda CR-V could be a better long-term choice.
By being honest with yourself about your real needs and budget, you can avoid buying too much or too little car. Do you really need a full-size pickup, or would a compact truck like a Chevrolet Colorado do everything you need it to do?
If you have to replace a car just a couple of years after you bought it, you’ll have to spend a lot more money than if you had just purchased the right car in the first place.
Not Studying the Rankings
In 2018, there's no excuse for not having enough information to make an excellent car-buying decision. Our new car rankings, for example, are drawn from the consensus opinion of America’s top automotive journalists. You can see how nearly every vehicle available today stacks up against its peers.
The ratings aren’t limited to an overall score. You can also see how a car compares to rivals based on its safety, comfort, performance, predicted reliability, and more.
Buying Options You Don’t Need
You can spend thousands more than you have to by purchasing options you don’t need. Often, those options can be found after you buy the car for a lower price.
A great example is a built-in navigation system. Many new cars are equipped with Apple CarPlay or Android Auto. Both systems can stream navigation information to the infotainment system. The map data is always current, includes traffic reports, and does not require costly annual map updates or subscriptions to traffic data services.
Rear-seat entertainment systems can cost thousands of dollars. For a lot less money, you can buy a couple of iPads or other tablets. A bonus is that they can be moved from car to car and used on the airplane when you travel.
Not Comparing Options Versus Option Packages
When you are building the perfect vehicle, be sure to compare the a la carte cost of the options you want with available option packages. If you just want a couple of features, buying the individual options may be cheaper. However, if you want more features, a package may be the better deal.
Finding a car on a dealer’s lot with an option package may be easier than finding one with just the options you want. If it is in dealer stock and does not need to be ordered, you’re likely to get a better deal on the car.
Insisting on All-Wheel Drive
Drivers in many parts of the country insist on all-wheel drive for inclement weather traction. It will usually cost a couple thousand dollars extra when you buy the car, while adding to your maintenance costs and lowering your fuel economy by a couple of miles per gallon.
Another option is to buy the two-wheel-drive version of the car and a set of quality winter tires for the snowy season. While all-wheel drive can help you get going on slippery roads, it doesn’t do much to help you steer or brake. Snow tires help you do all three.
Not Looking at Aftermarket Options
Often you can save a significant amount of money by purchasing options or accessories from aftermarket suppliers. Roof rack systems are an excellent example. Instead of buying Subaru-branded roof rack parts for your new Outback, you should look at rack components from companies such as Thule or Yakima.
Both Thule and Yakima offer adapters that fit their hardware to factory rack crossbars. A great benefit is that you can move the parts from one vehicle to another, just by getting a different adapter. When you trade your current car in for the next one, your expensive bike rack can be installed on the new car.
Some aftermarket parts are superior to ones offered by carmakers. The FloorLiner series of mats from Weathertech.com, for example, provide more edge-to-edge coverage than factory floor mats.
Being Too Specific About the Car You Want
The more specific you are about the car you want, the less likely you are to find it in stock at a local dealer, and the higher the price that you will likely have to pay when you locate it. Even locking yourself to a specific color or trim level reduces your negotiating power.
If a dealer orders a car for you, there’s little chance that you will be able to haggle on the price. It’s not like you can go to another dealer and get the same vehicle.
Not Negotiating the Price
Car buying is one of the last arenas of free-wheeling price negotiation. The price on the sticker is called the manufacturer’s suggested retail price (MSRP), and it only represents what the dealer would like to get for the car, not necessarily what you should have to pay.
In reality, the sticker price is one of the least important numbers that you should think about when buying or leasing a vehicle.
Whether you choose to buy or lease, the price of the car is up for negotiation. You can offer whatever you want to pay, and they can counter with what they are willing to accept. Hopefully, you'll meet somewhere in the middle and get the car. Sometimes you don’t, and you have to be prepared to walk away from a deal that isn’t right.
Unlike nearly every other purchase you make, when buying a car, haggling is both acceptable and expected.
Buying Costly Add-ons at the Dealer
You can add thousands to the price of a vehicle by adding expensive extras after you have settled on a price. Often, high-pressure sales tactics are used in the dealer’s finance office to sell these costly add-ons. In many cases, they are simply unnecessary, overpriced, or available outside of the dealership.
Before you buy anything beyond what is included on the car, you should do some research.
Even some essential add-ons, like gap insurance on a lease, can be bought from other places. Most car insurance companies also sell gap insurance, and you should compare both the coverage and the price of the policy.
Some add-ons, such as nitrogen in the tires and window etching are almost pure profit for sellers.
Not Reading the Fine Print
You have been at the dealership for hours, and you just want to hop in your new ride and go home. There’s a pile of paperwork for you to sign, but you don’t want to take the time to read every page. You can trust the seller, right?
Of course the answer is no, you need to read the documents that you sign. Pay particular attention to ensure that the price listed is the one you agreed to, the loan terms match what you are expecting, and no add-ons have been slipped into the deal at the last minute.
If a seller ever tells you to sign a document with incorrect information, promising they will fix it later, politely tell them that you will only sign it when it is 100 percent correct. Otherwise, you might find them conveniently forgetting that they offered to correct the documents.
Not Buying at the Right Time
There are good times to buy a car and not-so-good times to buy a car. Mondays, certain holidays, and the end of the year are excellent times to be in the new car market, according to TrueCar (a U.S. News partner for our Best Price Program).
Getting a deal by arriving just before a dealership closes is an urban myth.
Many of the new car reviews on the U.S. News Best Cars site include buying insights that tell you whether it’s a good time to buy. Just scroll to the bottom of the review for the expert market advice.
Not Taking Advantage of Deals
Cash back deals, financing offers, and lease incentives are like free money that you don’t have to negotiate to get when you buy or lease a car. Automakers offer the incentives when cars are selling slowly or they need to make room for newer models.
U.S. News Best Cars tracks the best offers available. You can find them on our lease deals page and new car deals page. Used car buyers can find attractive deals on certified pre-owned cars on our used car deal page.
Not Knowing the Value of Your Trade-In
Trading your car in or trying to sell it without knowing what it is worth is an open invitation to getting a low-ball offer from a dealer or a private-party buyer. The “What’s My Car Worth” tool on our used car page tells the approximate value of your current ride.
To get an accurate estimate of your car’s value, you’ll need to know what equipment your car has, its condition, and how many miles are on the odometer.
Not Walking Away
The greatest power that buyers have in any negotiation is their ability to walk away from a deal that they don't find acceptable. It's also the seller's greatest fear. The trouble is, many buyers are afraid to walk away, even when it is obvious it's a horrible deal.
You can walk away if any part of the deal isn’t acceptable – the car’s price, the value of your trade-in, the financing they offer, or even a salesperson’s pushy attitude.
If you don't want to slam the door completely, you can leave a phone number or email address with the seller stating that when they are willing to make a fair offer, they should contact you. As often as not, you’ll have a call from them by the next day.
Be firm, but polite. When it comes down to making you a good deal, they’re more likely to want to help out someone who has been pleasant, rather than someone who has been a jerk.
Not Using the U.S. News Best Price Program
Whether you choose to buy or lease, you can save money by using the U.S. News & World Report Best Price Program. We work with local dealers to find consumers guaranteed savings. On average, buyers save $3,279 when they use the program.
Not Looking at the Weather
Would you buy a convertible in the dead of winter? No one else would either, making it a great time to buy one. Same goes for all-wheel-drive vehicles in the middle of summer. The strategy of buying on off-seasons works just a well for used cars as it does new.
Use our new car deals, lease incentives pages, and Best Price Program to find some of these seasonal price differences. Don’t be afraid to offer a seller a bit less than you might normally bid if you are in the off-season for a specific car. They may just accept your offer.
Falling For a False Sense of Urgency
If someone tells you that you have to buy today, you should consider it a huge red flag and run, not walk, away from the deal. The only exception is if you are trying for a manufacturer-sponsored deal that has an expiration date that the seller can show you.
Car salespeople are professionally trained, and one of the tactics they use is to create a false sense of urgency. Threaten to walk away, and the urgency might evaporate.
Becoming Emotionally Attached to One Car
Allowing yourself to become emotionally attached to a car can cost you a lot of money. When you get too focused on what it will take to get your dream car, your vision can become clouded about other options. Try to remember, buying a car is a business transaction, nothing more.
One tactic that some dealerships employ is to alloy potential buyers to take the car home for a few days. While taking a comprehensive test drive is important, the dealership’s goal when they lend you the car is to get you emotionally attached to it. They might even try to guilt you when you return it, saying you’ve already put wear on it.
You want to keep yourself in a position where you can look at the transaction with clarity, and thoughts of “I have to have that car” will get in the way.
Bundling the Transaction
The car buying process consists of three components: financing, the price of the car, and the value of your trade-in. The dealer will want to bundle all three together, but your wallet is much safer if you treat each as a separate transaction.
In fact, you should not even tell them how you plan to pay for the car or that you have a trade-in until after the price of the vehicle is guaranteed in writing.
Telling Them You Are Paying Cash
Having the ability to pay cash for a car is fantastic, as you can save thousands of dollars in financing costs. However, proudly stating to a dealer that you are planning to pay cash tells them that they won’t be able to make any money on financing. They’ll have to make their profit by charging you more for the car.
Instead, tell them you are not sure how you’ll be paying for the car until you have the price of the car in writing.
Not Making Dealers Compete for Your Business
It used to be that you would have to drive all over town to get multiple offers on a new vehicle. Now you can let your fingers do the driving by requesting offers from several dealers’ internet sales departments. Making them battle to earn your business can save you big money.
You can also search for dealers where demand for certain vehicles isn't as strong as others. Look for hybrid sedans at rural dealers, for example, or full-size pickup trucks at urban outlets.
Not Test Driving the Car
Whether you are buying a new car or a used car, it is imperative that you take a test drive. With a new car, it could prevent you from buying the wrong vehicle. With a used car, a thorough test drive can help you identify problems that could cost you money down the road.
When you do take a test drive, you should have a checklist of things to examine in mind. Start with an exploration of the interior before you start driving, and then use all of your senses as you move along. Pay attention to bad smells, unexplained noises, and how the car feels as it hits bumps and travels around corners.
Any issues you find should be addressed before you make an offer on the vehicle.
Not Paying Attention to Fees
There will usually be some fees you have to pay when you buy a new or used car. Some are not negotiable, while others are. You have to pay sales taxes, registration, and title fees. Savvy buyers can negotiate others, such as documentation or dealer prep charges.
Remember that if fees are included in the amount you finance, you will be paying interest on them for the full life of the car loan.
Not Considering Leasing
Leasing allows you to get a new car with the latest features and lower monthly payments than you'll typically find if you purchase the same car. Leases are usually written for two to three years, after which you simply return the car to the dealer.
When you lease, you have no ownership interest in the car, and you won’t get any money back at the end of the contract. Leases also come with strict mileage limits, becoming very costly if you exceed the mileage cap.
You can learn more about the pluses and minuses of leasing in our story on buying versus leasing.
Not Understanding the Leasing Process
Leasing is simple in concept – you pay for the amount of depreciation that occurs while you have the car, plus taxes, fees, and interest. However, the lease process itself can be very complicated, with different vocabulary and rules than normal car-buying.
If you don’t understand the lease contract that you sign, you could be forced to pay more than you expect to pay for your new car. You can learn more about the leasing process by reading our article on how to lease a car.
Not Negotiating the Cost of the Car
Many first-time lease customers don’t realize that they can (and should) negotiate the price of the vehicle before they start to work out the rest of the lease terms. In fact, you should have a written offer for the car before you even bring up the idea that you want to lease.
Our story on avoiding costly leasing mistakes can help you to prevent this and many other leasing errors.
Leasing a Vehicle With Terrible Depreciation
Leases are priced based on the amount that the car is expected to depreciate over the length of the contract. By choosing a car that depreciates slowly, rather than one that loses its value quickly, you can save a tremendous amount of money.
You may even be able to lease a slowly depreciating model like the 2018 Honda Pilot for around the same price as a quickly depreciating Fiat 500L. The Pilot holds a spot in the top-third of our rankings of midsize SUVs, while the Fiat is scored at the bottom of our rankings of wagons.
Buying New Instead of Used
Some people never buy new cars, insisting on letting others absorb the rapid depreciation cars endure during their first couple years on the road. It’s a great money-saving strategy if you don’t covet state-of-the-art features or that new car smell.
In many cases, a three-year-old car will cost half of what it cost when it was new.
You have to buy right, however, so you don’t get into a car that is outside of warranty and has issues requiring costly repairs.
Not Getting a Pre-Purchase Inspection
One way to avoid buying a used car that will cost you in the long run is to get a thorough pre-purchase inspection from an experienced mechanic. Even if you are buying a certified used car, you should have your own mechanic check it out.
If you can find a mechanic that is familiar with the car that you are thinking of buying, it’s even better. Different vehicles have different issues, so finding a mechanic who is familiar with Jeeps would be an excellent choice when it comes to checking out a used Grand Cherokee, for example.
When sellers resist your desire to have a pre-purchase inspection, you should consider it a red flag and walk away.
Not Getting a Vehicle History Report
In addition to the pre-purchase inspection, you should also get a comprehensive vehicle history report from a company such as Carfax.com. It can tell you whether the vehicle has been in an accident and is not worth as much as the seller is charging.
You can read more about what such a document can tell you in our story about vehicle history reports.
Cars with salvage or otherwise “branded” titles are not worth as much as those with clean titles. Knowing that a car has a branded title can help you avoid overpaying for the vehicle.
Not Considering Certified Used
Do you like the idea of buying a used car but also want a warranty? You should consider a certified used car. Though more expensive than a traditional used car, they include warranty coverage and extra features that can save you money in the long run.
Not all certified pre-owned, or CPO, programs are created equal. U.S. News Best Cars looks for the best of the best, and you can see the top programs in our listing of Best CPO programs. The L Certified program from Lexus won the award for this year.
Manufacturers often offer financing deals on certified pre-owned cars. You can find them on our used car deals page.
Buying a Used Car From a Dealer
When you buy a used car at a dealer, the buying process can be straightforward, as they do it every day and understand all of the paperwork that has to be completed. The car is also likely to have undergone at least some cleaning and refurbishment.
Buying from a private party, however, can save you a lot of money, as they don’t have all the overhead of a dealership. A private party seller is also less likely to be a trained negotiator, so you might be able to work a better deal than you would be able to get with a professional car salesperson.
Not Taking Advantage of Free Maintenance
More and more manufacturers are offering free maintenance for a couple of years after you buy a new car from them. Not taking advantage of the offer is like throwing money away. Depending on your vehicle, the free maintenance can be worth thousands of dollars.
When you take the vehicle back to the dealer occasionally for the free maintenance, you can also be assured that any updates, service bulletins, or recalls are taken care of as well.
Paying for Things That Are Covered by Warranty
While independent mechanics can be much less expensive than the service departments at franchised new car dealers, you can find yourself paying for repairs that would be covered under warranty if you had taken your car back to the dealer to have the issues examined.
If your vehicle starts misbehaving and it is still covered under the manufacturers basic or powertrain warranty, it’s worth a trip to a dealer to get it checked out. If it’s not covered, you can always take it to your independent service shop.
Buying Premium Gas For a Car That Doesn’t Need it
If your vehicle requires premium fuel, it is a good idea to use it, especially if you want to get maximum performance from the engine. If, however, premium fuel is “recommended,” you can probably skip the extra expense with little harm to performance or efficiency.
Americans unnecessarily pumped premium fuel into their vehicles more than 270 million times in the past year, according to the AAA. Overall, it cost consumers an extra $2.1 billion.
With premium fuel now adding as much as 50 cents to a gallon of gas, the unnecessary hit on a family’s monthly budget can be substantial.
Not Considering Insurance Costs
Before you buy a vehicle, it’s a great idea to give your insurance agent a call to find out how much it will cost to insure. You might save hundreds of dollars per year by simply choosing the V6 model of the 2018 Chevrolet Camaro, for example, instead of a V8 Camaro SS.
You also want to consider who in your household you want to have covered, and with which vehicles. Adding a teenage driver to a sports car policy is much more expensive than adding them to the family sedan’s coverage.
Not Considering the Long-Term Costs of Maintenance
Before you buy any vehicle, you need to look at the total cost of owning it. Some cars are much more expensive to maintain than others. Our used car rankings include information about the total cost of ownership. In general, sports cars and luxury cars will cost more to own than mainstream models.
Even selecting different options on the same model will have an effect on the cost of ownership. Choose those fancy 20-inch wheels with low profile performance tires, and you can expect to pay more for maintenance. Performance tires tend to wear faster than all-season tires and are more costly to replace.
Not Considering the Costs of Subscription Services
It's easy to get hooked on satellite radio, telematics systems like GM's OnStar, and 4G LTE data connections. Once the trial periods end, however, you'll quickly realize that the features aren't free. Depending on the services you choose, you can add $10 to $100 to your monthly car expenses.
If you’re streaming a lot of content to your vehicle’s theater system or to mobile devices using the car’s Wi-Fi hot spot, your bill for connectivity can be even higher.
Consumers can save money by looking at the apps that are available on their smartphones and only subscribing to car-based services that aren’t available on the phone for a lower price.
Not Considering Fuel Economy
We’ve had several years of relatively inexpensive gas in America, but once the price of fuel starts to climb, you’re going to be thinking about your vehicle’s fuel economy. It would have been better to think about that before you bought that full-size SUV.
Fortunately, there are fuel efficient choices to be found in nearly every vehicle segment. Using our new car rankings, you can organize all of the vehicles in each class by efficiency and see which cars sip gas and which ones drink more fuel.
Buying a Luxury Vehicle Without Looking at Long-Term Costs
While there are benefits to buying luxury vehicles, lower total cost of ownership is usually not one of them. Many luxury cars require premium fuel and are equipped with options that are more expensive to maintain or repair if they fail.
Instead of purchasing a car with a luxury nameplate, consider a high-end mainstream model. For example, look at a top-trim 2018 Honda Civic Touring model, which is better-equipped and a couple thousand dollars less expensive than a similarly sized 2018 Acura ILX.
Pricing for the base model of the 2018 Cadillac Escalade starts at $74,695. You can get a loaded 2018 Chevrolet Tahoe with every option available for a couple thousand dollars less. The Tahoe was a finalist for our 2018 Best Large SUV for Families award.
Killing Your Car
All cars cost money to own, but you can manage the amount that your vehicle costs over the long haul by taking care of it. There are lots of ways to kill your car, as you can read about in our article on the subject.
By reducing wear, doing preventative maintenance, and paying attention to the messages your car is sending, you can keep a little more money in your wallet. Changing a few driving habits can prevent damage, save fuel, and maintain the safety of your car.
Failing to Shop Around for Financing
As you start shopping for a car, you should also be shopping for the best way to finance it. If you get a lousy deal on a six-year car loan, you’ll be overpaying for the next six years.
The last thing you want to do is rely only on the offers that a dealer provides. Many dealers don't make much money selling cars; they make it by selling financing deals. To save the most money, you want to explore financing options at local banks, credit unions, and online lenders.
Not Having a Financing Deal in Place Before You Shop
While you may eventually choose to go with a financing deal offered by a car dealer, you need to have a pre-approved financing deal in place before you start shopping. If you don’t have one, the dealer won’t have any incentive to compete for your business, and you’ll likely take whatever they offer.
Most dealerships can do the final paperwork for outside financial institutions, so you’ll never have to visit the bank or credit union that makes the loan.
Taking Out a Long-Term Car Loan to Reduce the Monthly Payment
Would you trade a lower monthly payment for a longer car loan? Many buyers do, but it is a costly way to buy a car in the long run. You’ll end up paying significantly more in interest payments, and you risk owing more than your car is worth for much of the loan term.
Bottom line: If you have to take a car loan out for more than six years, you’re probably buying a vehicle that you can’t afford.
Not Knowing Your Credit Score
Well before you start looking for a new car, you should find out what your credit score is and work to improve it and correct any errors. The last place you want to learn of credit issues is in the dealership’s finance office.
When that happens, any chance you have of getting a good deal on financing evaporates. The best lease and finance deals are only offered to customers with top-notch credit.
Rolling the Balance of Your Existing Loan Into the New One
You decide that you want a new car before you have your last loan paid off. The dealer offers to take the trade-in and pay off your old loan. If you owe more than your trade-in is worth, they’ll simply add the balance to your new financing.
It’s a horrible way to buy a new car. It is both costly and risky to your financial future. You are essentially paying for two cars with each monthly payment, and you owe far more than your car is worth. If your new car is totaled or stolen, you’ll likely be left with no car and a massive loan balance.
More Shopping Tools From U.S. News & World Report
The expert journalists and researchers of U.S. News Best Cars work hard to keep you from overpaying for your car. Our new car rankings and reviews help both buying and leasing customers find the right vehicle by exploring the factors that they tell us are important to their decisions.
Used car shoppers can use our used car rankings and reviews to see the long-term costs of cars they are considering.
Our car deals, lease deals, and used car deals pages help you find manufacturer incentives that can save you thousands of dollars. The U.S. News Best Price Program provides both buying and leasing customers with guaranteed savings at local dealers.
For the latest in automotive consumer advice, follow us on Facebook and Twitter.
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Avoid These Common Car Buying Mistakes
Buying or leasing a car can be loads of fun, but overpaying for your ride can take all of that joy away. When the reality of what you paid up front – and will have to pay through the car's lifespan – becomes apparent, you may realize that the choices you made have expensive, long-term consequences.
Paying too much isn’t limited to the price you pay when you get your new or used vehicle; it can also come from buying the wrong car, paying too much for financing, or the underestimating the total cost of owning the car.
Take a look at the following slides to see the many ways you can pay too much for a car, and how you can avoid some of these common mistakes.