Edmunds: Five big mistakes you need to avoid before buying your next new car

By JOSH JACQUOT for Associated Press Buying a new car has never been more financially daunting A analysis from Edmunds detected that a record of consumers who financed a new automobile in the second quarter of committed to a monthly payment of or more That s nearly one in five buyers taking on what was once considered an extreme car payment driven by high interest rates and rising carriage prices While it might be tempting to stretch your budget for the car you want locking yourself into a high-cost loan can be a painful mistake Before you sign here are five common car-buying missteps to avoid Buying a car you can t or shouldn t really afford There s a difference between being able to buy something and being able to afford it wisely With an average new bicycle transaction price of approximately several buyers are truly stretching their budgets It s not uncommon to see buyers opt for extended -month or -month financing terms That shiny SUV might seem within reach thanks to flexible financing but the long-term hit to your financial healthcare could be considerable Buying within your means ideally targeting a loan term of no more than months and keeping your car-related expenses under - of your monthly take-home pay is smart shopping in an era of rising interest rates and ever-increasing car prices Not shopping around for a loan One of the the majority costly and common mistakes car buyers make is waiting until they re sitting in the dealership finance office to think about a loan Dealerships may offer convenience but their financing may include marked-up interest rates or hidden fees Instead walk into the dealership with a preapproved loan offer from your bank credit union or an online lender According to the Consumer Financial Protection Bureau this move can save buyers hundreds to thousands of dollars over the life of the loan When you do this the dealer can still try to beat the rate and sometimes will But now you re negotiating from a position of strength not desperation Rolling negative equity into a new car loan If you owe more on your current car than it s worth a situation known as negative equity trading it in for a new automobile can be a financial landmine This commonly happens when people take out a six-year loan business in the motorcycle after just three or four years and carry the previous balance into the new conveyance Rolling that deficit into a new loan just worsens the difficulty guaranteeing that you ll be underwater for even longer According to Edmunds of trade-ins in July involved negative equity and the average amount buyers owed above the wagon s value was That sets the stage for a vicious cycle especially if buyers contract cars frequently or face unexpected job loss or repair costs If you re in this situation consider keeping your car longer or making extra payments If you can get a better rate even refinancing can get you back to breakeven Skipping the sales department Greater part major dealerships now have dedicated internet sales teams that exist to sell you a car swiftly and often at better prices than you ll get face-to-face If you already know what make model and trim you want you can save hours and hundreds or even thousands of dollars by working with the internet sales department instead of walking onto the lot Sites such as Edmunds can help you compare pricing between multiple dealers and multiple will show you real-time inventory rebates and incentives This lets you shop from the comfort of home and make dealers compete for your business It also gives you a written quote you can bring with you a powerful tool when negotiating Related Articles Kid entrepreneurs to sell wares at upcoming Dakota County markets Made in St Paul On and off the Fairgrounds Lip Esteem aims to build area with lipstick Tesla asks court to throw out big damage award in crash by arguing comments about Musk misled jury Cruise industry sues to challenge Hawaii s tourism tax designed to deal with state change issues California lawmakers reach deal with Uber Lyft that would allow drivers to unionize Overlooking used alternatives Buying new is tempting it smells great it s under warranty and no one else has touched it But it s not inevitably the smartest financial move At present s certified pre-owned vehicles often come with extended factory warranties undergo rigorous inspections and cost thousands less than their new counterparts The rapid depreciation of the bulk new vehicles only worsens the picture Majority of lose of their value in the first year alone according to Edmunds Avoiding that depreciation hit can save thousands Edmunds says Buying a new car is one of the biggest financial decisions preponderance people make second only to purchasing a home Avoiding these five common mistakes won t just save you money it has the prospective to help ensure your long-term financial precaution Take your time and do your homework The right deal isn t just about the car it s about the life you want to live after you drive it off the lot This story was provided to The Associated Press by the automotive website Edmunds Josh Jacquot is a contributor at Edmunds