63% of Americans Find Some Part of the Car-Buying Process Confusing: How To Handle 6 Major Roadblocks
In a recent poll conducted by GOBankingRates, 63% of those surveyed said they find some part of the car-buying process to be confusing.
If more than half of Americans feel they do not confidently understand the car-buying process, they may potentially lose out on savings and make car purchases that do not meet their needs. Here are some of the most common roadblocks associated with buying a car and what consumers need to know about approaching these roadblocks.
Identifying the Right Vehicle
The first roadblock in the car-buying process is figuring out which car is the right car to purchase.
For most car buyers, the answer should not be based on a flashy brand name alone. Alan McLaren, executive vice president and chief operating officer at Off Lease Only, said consumers need to make the decision based on finances, safety and inventory. Inventory in particular has posed some issues for buyers who know exactly what car they want, but the car itself may not be available at local car lots.
McLaren said consumers may find additional options through eCommerce retailers rather than solely relying on their zip code or state of residence for their vehicle needs. Now more than ever, consumers have options to identify and purchase the vehicle of their choice. Using the hybrid approach of utilizing both online and in-store experiences allows consumers to start their research, get an offer for a trade-in and even get pre-approved for financing. Consumers may even purchase a car, once they know which vehicle they want to buy, from the comfort of their own home through organizations that offer delivery options.
What if you still want to do a test drive before making the purchase? “For consumers who wish to see the vehicle they are hoping to purchase in-person and test drive it, many organizations have dealerships strategically located within a state to make it easier for consumers to do just that,” said McLaren.
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Getting the Best Deal
When it comes to getting the best price or deal on a car, McLaren said transparency by the dealer or dealership is a must. “Oftentimes there is the price of the vehicle as identified by the dealer and then there is the value of the vehicle as identified by Kelley Blue Book,” said McLaren.
Consumers are encouraged to do their due diligence and shop around to make sure they are getting the best price. Ensure that the price you are being quoted is the final price. When and where possible, consumers may inquire if the dealer or dealership is able to share their transparency policy for additional pricing peace of mind.
“Make sure the dealer you are working with has no hidden fees and clearly states what you will pay for your vehicle should you proceed with your purchase,” said McLaren.
Confirming the Vehicle History
If you are buying a used vehicle, you’ll need to learn as much as possible about the vehicle history. A few key questions to answer include if the vehicle has ever been involved in an accident, how many previous owners owned the vehicle and the service history of the vehicle. Consumers purchasing a used vehicle should be able to get a history report from their dealer that answers these questions and provides even more insight into the car’s history.
In some cases, the reports readily available may not feature all incidents or there may be a delay in reporting. McLaren recommends requesting multiple history reports, when possible, for consumer peace of mind.
As consumers review vehicle history reports, it is wise to establish a trusting relationship with the salesperson at the dealership who is working with you to purchase your vehicle. McLaren said there are organizations that have invested in additional tools to take a vehicle history check a few steps further to assist with ensuring customer satisfaction with a used car purchase.
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Financing is a significant roadblock in the car-buying process. 14% of Americans polled by GOBankingRates said where to go for a car loan is the most confusing part, followed by warranties at 13%.
Matas Buzelis, automotive expert and head of communications at carVertical, said this confusion is not helped by dealerships that use gimmicks to get consumers to buy a car. Some dealerships may offer certain incentives, like 0% financing, to entice consumers. Other dealerships may mark up loan interest rates beyond what buyers qualify for. Buzelis said this behavior may cost buyers hundreds or even thousands of dollars over the loan course.
The best way consumers can get over the financing roadblock is to thoroughly conduct research. Research the model of the car you’re interested in buying before making a trip to the nearest dealership. Then, research financing terms and compare financing terms at various financial institutions in order to prequalify for an auto loan.
“Thorough research can point buyers in the right direction and help them avoid buying a vehicle with an attractive, but poor, reliability record and/or a high depreciation rate,” said Buzelis. “There’s a good chance the buyer will find a better deal or learn something new about the car, impacting the final decision.”
McLaren said working with a group that strives to create a simple, straightforward and hassle-free financing process may also be beneficial for customers.
“Companies that have established relationships with credible lending institutions, based on many factors including sales volume, will be able to assist the customer and connect them with financial institutions that are best suited for their individual situations,” said McLaren.
Don’t forget about additional ownership costs you’re now responsible for once you drive off the lot. Phillip Villegas, owner of Three Pedal Mafia, said these costs include insurance, gas and maintenance fees, all of which can quickly add up in your budget.
“Generally, car costs should not exceed 20% of your monthly budget,” said Villegas. He recommends checking with your insurance company to see how much your rates will vary before acquiring a new vehicle. Depending on the vehicle’s brand and model, premiums may go up.
It’s also a good idea to explore the possibility of buying a fuel-efficient vehicle. Compare fuel economy and see if choosing a fuel-efficient vehicle is the best decision for your automotive needs.
This is a lesser discussed roadblock, but there are some situations in which a consumer may make a car purchase and regret some element about it. This can mean anything from feeling uncertain that the vehicle really meets your needs, or that the salesperson talked you into making an immediate purchase.
“Purchasing a vehicle is a big decision and sometimes it takes more than research and a test drive to confirm you are making the right decision and you might change your mind,” said McLaren.
When possible, McLaren recommends inquiring (before purchase) about any exchange policies offered by the dealership. Learn if there are any opportunities to bring the vehicle back and find another car in the dealership’s inventory that better suits your needs and where you’ll feel complete peace of mind in knowing you bought the right car for you.
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