5 Myths About Buying a New Car
We break it down for you so you don't waste your time on car buying myths.
1. Using the Internet to Buy a Car
We love the internet. We use it for everything. We. Mean. Every. Thing. From directions to lyrics to how to properly cook meat, it's the best thing since sliced bread in our digital, 21st century age. And while it can be helpful when you are researching which type of car you want to purchase, buying a car on the web is a different story altogether, like negotiating the full scope of the car deal. Plain hard. Some companies, such as TrueCar and Costco, will sell your information to dealers, who in turn offer a pre-set price for the car you want. However, the only part of the deal that has been agreed upon is the price, and everything else (the lease or finance interest rate, trade-in price, and additional products such as an extended warranty) still have to be negotiated.
2. Cash Payments Will Get You a Better Deal
Myth busted. Using cash to pay for a new car is only beneficial when the dealer offers cash only incentives. Otherwise, dealers usually make more money on lease or finance deals, which means they are less inclined to offer a lower rate for cash deals.
3. Good Deals Are Hard to Come by
False. There are hundreds of great deals at all times. You just need to do your homework and, in most cases, negotiate with the dealer. What it really boils down to is your patience. It's likely that you'll be able to find a similar deal to the seemingly great one you encountered. It just might mean you wait for a week or two maybe even a month. The features or perks may be different/switched around, such as a lower interest rate rather than a rebate, but the end total will be more or less the same.
4. It's Better to Have Your Own Financing
Nope. When you come to the dealership with your own financing, it’s comparable to paying for the vehicle with cash. Which means that the dealer will likely be less motivated to give you a discount on the selling price. Manufacturers will often offer discounted interest rates that may be a fair amount lower than what the bank or credit union is offering.
5. A Low Selling Price = a Good Deal
Think again. It’s important to look at the whole picture rather than the sticker price when it comes to buying a new car. When you only zero in on the price or monthly installment, you neglect to factor in other fees that increase the overall total. Do yourself a favour and think big.