When it comes to buying a new car, you need to plan which model you should invest in carefully. However, despite long term deliberation, you end up with a financial trap. Most car buyers have a mindset that they can get a car at low prices by negotiating with a car salesperson.

It is not surprising to see you haggling over €1,000 on the car's price to only end up buying a car worth €3,000. This all happens because of the financial traps mentioned below. Homework is a must before you step into the market. Just believing the words of a car dealer and salesperson is not enough to make a deal.

No sufficient research for financing

When it comes to shopping for a car, most people try to pick from a range of models they like. They often forget to take into account the affordability factor. It is not necessary that you can afford the car models you want. Some users shop bearing the amount of monthly payment they can afford, but they slip up, including the financing's overall cost.

The monthly payment is just a fraction of the whole of the money you have to pay in the form of principal and interest. You should know the total price of the car. It includes processing fees, additional charges, and the interest you will pay over and above the car's market value.

You should also know the amount of down payment you will have to make. Depending on the financing option, it can be between 10 and 20%. The higher the value of the car, the higher the down payment will be.

Ensure that you have calculated the overall cost to check if the model you are buying fits in your budget. When you go to the showroom, you are likely to spend more than you decided because your car dealer is ready to finance your car despite your poor credit rating.

Solution:

To avoid this trap, you should prefer to get an auto loan from a bank. If your credit rating is bad and cannot qualify for the loan, seek car finance in Ireland for bad credit from a reputed direct lender. Do online research and get a quote before buying the car. This will clearly let you know how much you can afford to pay.

Buying on the first offer

One of the biggest financial traps is you clinch the deal on your first visit. This curtails down the opportunities for comparison.

Car dealers can easily make more money from you because you do not know about the cost and think about what you have been offered at is affordable.

Comparison is a must because it will help you know the cost of financing. While you choose a financing deal, you must have answers to the following questions:

• What will be the repayment length of the auto loan?
• What will be the total cost of the deal?
• How much will you pay as a down payment?

You will likely end up with a bad deal if you do not know the answers to these questions.

Solution:

You can avoid this trap easily if you do proper research to find out which model suits you fine.

Being influenced by dealership tactics

Many people get blown away when they meet a car dealer. As you find dealership promises like low payments, discount for huge saving, and no charge, you find that the deal is amazing. You do not even bother to research and compare your deal.

Do not forget that the dealership will never bother about your budget. Even though you have come up with an advertisement if a big sale offer, do not take it as a significant saving offer. Further, you will be told about the pros of the car you intend to buy.

They will not tell the drawbacks. For instance, they may not disclose that the car you are looking to buy is not fuel-efficient.

Solution:

To avoid falling in the trap of dealership tactics, you should do your homework. Have a list of all questions with you and ask the dealer. Do not keep your knowledge limited to what they inform you. Choose a fuel-efficient, reliable car, offers high salvage value, and above all, fits your budget.

Falling for longer repayment plans

Some car dealers may offer you a deal with a more extended repayment period, for instance, up to 6 or 7 years. Such deals can whittle down the monthly payment size, but you will end up paying more money in interest. As a result, you will likely spend much more than the worth of the car.

Solution:

Deals with longer repayments are usually better when you get them at very low-interest rates. Credit Union car loans come with lower interest rates. Instead of car dealers, you should seek deals from online lenders. Since they follow FCA guidelines, they will help you get the deal that suits your budget.

If you are buying a car, you can easily avoid financial traps by following the tips mentioned above.