5 Misconceptions About Your New Car Purchase

Oct 26, 2016

Buying a new car is among the most exhilarating purchases you will make. Driving off the lot in your pristine new (or new to you) ride is a high that only comes, on average, 13 times in your entire life. It’s a major decision, and one that you don’t want to go into blindly. From fears of being hoodwinked by a salesman motivated solely by profit to the uncertainty that a better deal may be just around the corner, there are many factors that can certainly put a damper on your car-buying enthusiasm. It doesn’t need to be this way, however, and many of the most commonly accepted ideas about the car sales industry are actually based in myth rather than fact.

Car Dealerships are out to take advantage of you

Although perhaps the most widespread of car-buying myths, the notion that dealerships are out to take advantage of their customers is actually the most bizarre. Car dealerships in general are regular businesses, governed, as all successful businesses are, by the triune pillars of customer service, consumer trust, and profit. If trustworthiness sinks and customer service is not up to par, profit and the opportunity to make profit also decrease. It’s therefore in the best interest of the dealership, as well as you as a customer, that car dealerships take your needs and trust very seriously.

Good deals on cars are limited or one-time-only

This one goes hand-in-hand with the above: once again, dealerships are businesses. It’s in their best interest to offer deals and incentives on cars to their customers all throughout the year. The particular offer that got your attention may expire or only be for a limited time, but there will always be another one. And upon closer examination, you’ll probably see that they add up to the same thing.

Just showing up on the car lot is your best bet

It may come as a surprise that not everyone in the market for a car has done their homework. With such a plethora of possibilities available, some simply may not know where to start. It helps to take note of what you like and prioritize in a vehicle before you’re ready to buy. Conduct your own, independent research using word-of-mouth referrals or one of the many websites for comparing cars before ever stepping foot on the lot. Armed with knowledge, you’ll be better prepared to negotiate and insist upon the features that really matter to you, ensuring that you leave satisfied with your purchase.

New cars are marked up by exorbitant margins

Actually, and perhaps surprisingly, new cars are marked up by significantly lower margins than used cars are. This is true primarily because the dealership can only purchase a new car for so low a price, while a used one may be acquired for much lower than its market value. Additionally, car sales yield most profit from adding services and features, so marking up the vehicle is unnecessary.

Buying a new car is a bad idea because depreciation happens so quickly

Depreciation does happen, so gently used can be a good option for scoring extra features that may make a new car too pricey. However, the car continues to decrease in value throughout its life and use, and you only skip the first period of depreciation by purchasing a pre-owned vehicle.