• Top seven car-buying mistakes

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    Buying a car is exciting, and it’s easy to get swept up by your emotions. But as with any major expense, it’s worth taking the time to weigh your decisions carefully so you don’t end up with a deal you regret. Here are the most common mistakes people make when buying a new set of wheels:

    1. Getting hung up on one model.
    Sometimes people fall in love with a particular car and fail to look at comparable models that may offer better value. This is an especially big problem if the car you’re daydreaming about is impractical for your needs — a four-wheel-drive Jeep sounds like tons of fun, but it’s probably not the best choice if you’re running errands in the suburbs. In addition, getting overly enthusiastic about one model leaves you vulnerable to salespeople who may try to take advantage of you.

    2. Not doing your research.
    Even if you've narrowed your choice to a couple different models (you can get a head start here), you've still got work to do before you set foot on a dealer's lot. Check each vehicle's safety record. Read reviews from indutry experts and current owners. Research the available options and decide which ones you really need.

    3. Buying too much car.
    Many car buyers, lured by low monthly payments, end up purchasing a vehicle they can’t comfortably afford. To avoid this situation, determine exactly how much you can you can spend before you hit the lots. Many experts suggest spending no more than 15 percent of your after-tax income on car payments. And remember that cars depreciate quickly, so while car loans can carry terms of up to five years, you’ll get better value with a three-year loan.

    4. Not considering all your financing options.
    Dealers offer incentives that sound tempting, including the promise of zero-percent financing. But because these offers usually entail paying a higher purchase price, you can often get a better deal from an outside lender. If you have good credit, you’ll be able to consider a range of options, such as personal loans or home equity loans. If you have bad credit, you may need to look at other auto loan options. It’s best to go to the dealer armed with a pre-approved loan. If the dealer thinks they can beat your loan rate, make sure that the term they’re offering is the same and there are no hidden charges.

    5. Not taking a test-drive.
    You wouldn’t buy a suit or a dress without trying it on. Yet many people buy a car after only taking a quick spin around the block — or without test-driving at all. Make a list of characteristics you want and questions you have, then take the time to do a thorough test-drive. It should take at least half an hour. 

    6. Negotiating from the sticker price.
    Smart car buyers ignore the manufacturer’s suggested retail price (also called the sticker price) of a new car. Instead, they start their comparison-shopping by looking at the invoice price — that is, the amount the dealer paid to the manufacturer. You should negotiate your price upward from the invoice price, not 

    7. Buying unnecessary extras.
    Dealers have all kinds of tricks designed to get you to pay more. You can’t avoid sales tax, destination charges and licensing, but you may be able to dispute advertising fees or other administrative charges. They may also try to slip in treatments such as rust-proofing, stain-proofing the seats, or etching the vehicle’s ID number into the window to deter thieves. Most are unnecessary, and if you really want them, you can often arrange to have them done cheaper on your own.