5 Things Overlooked When Buying a Car

Buying a new or used car can be a fun, but overwhelming, time. It's easy to think that you simply walk into a car dealership, find a car you like and walk out with a new set of wheels. Unfortunately, it's not that simple. There are many factors you must consider, from budget to style to reliability and more, depending on your specific situation. If you're in the market for a new-to-you car, consider some of the following things overlooked when buying a car.

The Total Cost

It's common to think the car payment is the only factor to consider when buying a car. It has to fit into your budget, so it makes sense. The underlying problem is that a dealer will do what they can to extend your car payments as long as possible while still keeping those payments within your stated monthly goal. That results in one thing – spending too much money over the life of the loan. Kelley Blue Book reports that one-third of car buyers are taking loans of up to 84 months, which means you pay for close to a decade for the car.

Instead of looking at the total monthly payment, look at the total cost of the car and let that guide your purchase decision. Not only will this help you save money in the long run, but it will also help you see which cars you can consider purchasing.

Overlooking the Role of Taxes and Fees

Unfortunately, your total out of pocket cost doesn't end with the purchase price. You also need to take taxes and fees into consideration. Depending on where you live and the purchase price, these can add thousands of dollars to the total cost. This also doesn't consider any special add-ons your dealer may try to sell you.

That being said, you face a decision of how to handle those taxes and fees. You can either finance them into the total loan amount or you can pay for them in cash. The former will cost you more in the long run as you pay interest on the additional funds. The latter, however, may keep you from buying a car in the time you want. Analyze what you may be responsible for upfront to determine which route is best for you.

Not Shopping Around for the Best Rate

In theory, financing your new car through the dealer is quite simple. Everything is handled in one place, and you're done with the purchase. However, you may be leaving hundreds or even thousands of dollars on the table by getting a car loan in this fashion.

Instead of assuming the car dealer has the best loan rates, shop around for rates before making your purchase. This puts you in a position of power when buying the car as you'll know what you qualify for with other financial institutions. If you don't know where to start, you can compare auto loan rates online to get an idea of what's available. If you're concerned about multiple hits impacting your credit score, keep in mind that multiple reports (when shopping for a car loan) count as one inquiry – often within a 14-day window.


It's easy to think the sticker price is the only price for a car. That may be the case in some situations, but in many times it's not. That will be impacted by things like demand, company policy and season, to name a few. Assuming you don't fall into one of those categories, you have the potential to save thousands of dollars on the purchase price of the car.

Negotiating a car price may be more art than science, but it's important to do your research through sites like Edmunds.com and Kelley Blue Book to see what value they assign to a given car. Go a step further and get quotes from several local dealers to see who will offer the best price on the car you want.

Researching Your Car

Researching a car doesn't stop with the purchase price. There are many other things you want to look in to, such as:

  • Historical reliability
  • Gas mileage
  • Cost to insure
  • Accident history

Some of these items can be found out by requesting a vehicle history report from the dealer. Others may be available through Edmunds.com or Kelley Blue Book. Cost to insure can be determined by calling your insurer before purchase. By doing a little bit of legwork, you can get an idea of whether or not the car meets your needs.

Bottom Line

There are many things overlooked when buying a car, but with a little effort ahead of time you can avoid mistakes and get the right car for you.

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