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buying The Most Expensive Car Buying Mistake Has Nothing To Do With How Well You Negotiate A Deal

23:00  07 november  2019
23:00  07 november  2019 Source:   jalopnik.com

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But the worst mistake . according to Edmunds, often comes after a savvy shopper closes their deal . “To illustrate how heavy the financial penalty for making such a quick switch can be, consider this The research paid off: You were able to snag a deal for ,643, shaving roughly ,400 from the

The Most Expensive Car Buying Mistake Has Nothing To Do With How Well You Negotiate A Deal . The internet has changed the way cars are bought and sold. It’s now a lot easier to figure out who has the best deal on a new car , but used cars are more complex.

There are a lot of mistakes that buyers can make if they aren’t careful that could end up costing them, including not understanding your budget or comparing deals. But the worst mistake. according to Edmunds, often comes after a savvy shopper closes their deal.

a car parked in a parking lot© Photo: AP

We all know that new cars start to depreciate as soon as they are driven off the lot, and while the rates of depreciation will vary from model to model, Edmund’s car-buying expert Matt Jones (via AP) explains that trading in that new car too early can erase all the hard work you did shopping for your deal. He does so by using a fake but mathematically realistic scenario:

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The Most Expensive Car Buying Mistake Has Nothing To Do With How Well You Negotiate A Deal . If you ’ve ever bought a car or had service done at a car dealership, you know that soon after the transaction you ’ll get a phone call or an email asking you take a survey about your experience.

The Most Expensive Car Buying Mistake Has Nothing To Do With How Well You Negotiate A Deal . People want a better way. But why is car - buying such a stressful process? It all comes down to how our brain handles these types of interactions, because buying a car is not like buying any

'“To illustrate how heavy the financial penalty for making such a quick switch can be, consider this fictitious situation in which you bought a new Honda Accord LX in 2017. You spent hours getting price quotes, comparing interest rates and calculating payments. The research paid off: You were able to snag a deal for $20,643, shaving roughly $3,400 from the MSRP of $24,030. Once all taxes and fees were factored in, your “out-the-door” cost came to about $22,700. By most accounts, this amount would be considered a good deal.

'But soon after the purchase, you realized you didn’t like the Accord and decided that an SUV would be a better fit for your lifestyle. You sell your Accord to the dealership just two years later for a trade-in value of $13,522. That’s a full 40% less than the original all-in cost of $22,700 you paid only 24 months earlier. In actual dollars, the Accord value dropped by $9,185.”'

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The Most Expensive Car Buying Mistake Has Nothing To Do With How Well You Negotiate A Deal . I have huge negative equity thanks to interest and how the loan is structured. I’ve read one of Jalopnik articles that suggested getting a lease to absorb the negative equity, find a vehicle that has

The Most Expensive Car Buying Mistake Has Nothing To Do With How Well You Negotiate A Deal . The car market is more like real estate than a lot of people realize; location has a lot to do with how much you will pay. The good news is if your local market is tough, you can buy a car from

Jones further says that while Hondas typically hold their value better than most cars, this depreciation loss can be even more dramatic if you buy a car with a much steeper resale curve.

As a professional car shopper I’ve spoken with several car buyers who had a fairly new model and were looking to get something different, their situations were not all that different than the fictional buyer above, and more often than not these folks are under-water, meaning the value of the car is less than the remaining balance on the loan. That scenario is even more exaggerated when people try to get out of leases early.

In both cases, if a buyer wants to switch to a different car it will either require them to roll-over large amounts of negative equity into the next loan or lease and/or bring a lot of money to the table to close the gap between the payoff amount and the trade-in value. Often people in tough situations like this want an easy way out, unfortunately, the cold hard realities of math don’t allow for that.

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Jones offers some tips to avoid buying a car that you may not keep for awhile including, honestly assessing your needs and budget, doing a thorough test drive to be sure the car is a good fit, and considering a used car that has already taken some depreciation to give yourself an “easier out.” However, the key point is that if you are going to purchase a car you get the maximum financial value out of it by keeping it as long as possible.

Is the End of the Year Really a Good Time to Buy a Car? .
If you’ve been thinking of getting a new set of wheels, you might be tempted to check out those seasonal promotions. © Photo: ShutterstockUsed car sales are up and new car sales are down, according to Jessica Menton at USA Today, which makes dealers extra amped to unload some of their lingering inventory. On top of that, the federal funds rate cuts this year have led car loan interest rates to drop.

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This is interesting!