Second only to your house, the most expensive item that many people will pay for during their lives is a new car. When you buy your new car whether it is brand new or a used one, do you know what you are signing up for and the total amount of how much you will pay back? At the time of purchasing a new car, many people are excited, and the adrenaline is flowing at the highest level.
This is when desire can take over and you are at your most vulnerable level where you could happily sign for anything just to get your hands on the product. Many car dealers live and thrive off the desire of customers and feel that their job is so much easier and can manipulate the customer into signing up without them looking at the small print.
Have you ever wondered why car salesman want you to sign there and then, its because the desire for the car is at the highest and the reality and affordability are way down the pecking order. Salesman hates it when the customer says well I would like to think it over first and come back or call later. They know that as soon as the customer leaves the showroom, reality will slowly take over the desire and you will find yourself asking can I afford it, and do I really need it.
When people look at buying a car they only look at the monthly payment which can be very dangerous as there are many hidden costs such as admin fees, interest rates and the amount of deposit you would need to put down to get your expected payment. Car salesmen are very good at making bad deals look good and will always start much higher than they need to so that they can come down to the so-called middle ground which is merely where they wanted to be in the first place.
If you do find a car that you like and really want, take a step back and think about what you are signing before you sign it. Look at the extra products that have been added to the agreement and more importantly the interest rate that you are going to be paying. If you go into a showroom with the intention of your monthly payment being £130 per month, the salesman will do his best to increase that and earn more finance commission for the dealership. They will normally break the additional payment down to a weekly amount as it sounds so much less. If they were to say that they could do the deal but for only £5 per week extra. That’s an additional £20 plus a month more and will take your monthly payment to over £150. If you are paying over 5 years, then that’s an additional £1200 more than what you wanted to pay, and to achieve that payment, you will probably have paid a much bigger deposit than you expected.
All the information is outlined in the finance agreement and the salesman must go through everything by law with you before you sign. You will notice that sometimes or most of the time the salesman will try skipping the interest percentage and other major areas of the deal so that it's not highlighted to you, he will always mention the monthly payment as all the hidden costs are behind that. When you are asked to sign up always ensure that you read the documents fully and check for any products in there that you didn’t ask for.
Once you are happy, read it again as its amazing how many people miss vital parts the first time. When you are happy with everything then sign away but remember that you will always have a cooling off period. It may be beneficial that once you are away from all the dealership distractions, to read it again at home. You will be much happier with your new car if you are also happy with the finance agreement.
So many people are massively unaware of the way car dealers work and regret buying their pride and joy, wouldn’t it be much better to be happy with both your new car and your new agreement so that you can freely enjoy the benefits of it.