A car purchase in Canada takes dedication financially and mentally. It’s less of a bother for folks who’ve had plenty of past experiences in buying cars, as they’re familiar with what to expect, what to do, and what are the systematic procedures that constitute a car purchase. However, for young adults that’s sheepishly approaching their first used car purchase, it’s a daunting endeavor. That’s perfectly understandable, considering it’s a big chunk of financial investment for most people living in the Kitchener Waterloo area. However, there are a few novice mistakes that can often be averted by taking your time which will help ease the process, and here are a few common errors we’ve noticed just for reference.
Doing too little research
One of the biggest oversight Ontario buyers often commit is underestimate the amount of research they have to do. If you spend the time and look around, there will certainly be a lot of used car dealerships in Kitchener Waterloo. On a brief look around, you can often identify the really dubious dealerships that you should avoid at all cost. However, to really unearth the unscrupulous dealers, you’ll have to scrutinize them on the Internet. If you’re fortunate, you can discover and avoid them before even approaching them.
If you end up doing business with them though, these duplicitous dealers can steer you towards questionable “lenders” that wouldn’t hesitate to hand over your privacy details or straight up lead you to a horrendous deal. Loaning can be a quagmire for first-time loaners, hence we have our own on-site finance specialists boasting over 2 decades of experience who works only with reputable lenders to ensure our customers have the smoothest experience in getting a car loan for your next vehicle.
Assuming brand new is always the way to go
A common misconception is thinking that you’ll always be better off avoiding headaches by purchasing new cars. While with contemporary manufacturer’s warranty and generally excellent quality control mean that it’s a good rule of thumb, it’s not always the case. New cars almost always suffer from catastrophic first-year depreciation and command higher insurance premiums. Again, better modern quality control also means that the used cars, even with higher mileage, can be a worthwhile option. Reputable used car dealers often offer warranty coverage as well, and buying used generally means that you take much less of a hit in depreciation, save cash, and pay less in insurance. Also worth noting for completely new models or a new generation of an existing model is that you can avoid early year recalls or flaws.
Buying cars with your heart instead of your head
Emotions cloud judgement. Love at first sight is a very real thing when you’re perusing a used car lot. This drives the buyer to make an irrational decision, whether if they’re buying what they want for too much money, or ending up with a car that doesn’t even fit their needs or ability. One way to mitigate this problem is to bring a pragmatic, down-to-earth friend with you that’ll gladly restrain you from committing to any rash decisions.
Only inspecting a car on the surface
It’s important to not overestimate your own mechanical aptitude when it comes to used cars. A car is a complex machine that comprises of thousands upon thousands of intricate parts. If you’re really keen on a car, it’s almost certainly worth the money to opt for a pre-purchase inspection if you are buying from a private seller, either by your choice via a trusted mechanic or a professional, even if it ‘looks good’ or ‘feels good’. On the other hand, a reputable dealership will sell you a certified vehicle covering all of the above and beyond including a comprehensive vehicle history (Carproof Reports).
Not understanding a finance contract fully
Finally, the biggest mistake a first-time car buyer can make is failing to thoroughly apprehend the fine print when reading an auto finance contract. There are a few finance jargon that you should understand before applying for financing that’ll save you from buyer’s remorse. The most eminent bit of text you’ll probably notice is the annual percentage rate. This essentially translates to the interest rate of the loan you’re applying for. Obviously, the lender has to make money somehow, and the major way is through this percentage rate – they’re charging you this extra percentage from your total loan as the fee for lending you a sum of money.
Then there’s also the less obvious one, which is the finance charge. It’s the fee charged for the cost of taking out the loan, included in the monthly payment. Following that is amount financed, which basically means the amount of money that’s being borrowed to make the purchase, potentially deducted from the initial price of the purchase if you make a down payment. Moving on, there is the total of payments. It denotes what the buyer pays for over the duration of the loan like amount financed and finance charge. Finally, there’s the total sale price which indicates the total sum incurred, or grand total amount for the car purchase.
The above are just a few common mistakes that people often make while being eager about their first car purchase. If you still have any lingering doubts, feel free to contact us. If you live in Cambridge, Kitchener, Waterloo, Guelph or surrounding areas you can visit us at Garston Motors and we’ll gladly answer your questions in person.