Top 10 critical mistakes most new car buyers will make in 2022
Buying a new car is a big deal for most people, and it's very hard to get honest, good quality, independent advice. Here are the biggest car buying mistakes I see people about to make, and how to do it right…
Buying a new car is a big deal, for most people, because you’re spending a large sum of money on a product you need to perform a wide range of tasks for several years.
But you can’t possibly know how it’s going to pan out in five years’ time, and it’s hard to get properly independent advice because the automotive media is a slave to advertisers.
If you don’t want to buy the wrong car, it’s time for you to understand and recognise the top 10 mistakes I routinely see new car buyers make. Then, you need to avoid making those mistakes.
I get thousands of emails a month from new car buyers who either bought the wrong car, signed up for the wrong car, signed up for the right car sporadically but paid way too much.
Example: Spoke to a very nice lady who was everything I’m not, polite, sincere, pleasant, non-confrontational, but also on the brink of tears because she’d actually saved $3000. It was a rare frown that went upside-down immediately.
Critical Mistake #1: Impulse buying.
This is not a pair of shoes or a handbag. You’re going to be committed to this vehicle for several years - your life will depend on it, so will your kids, your spouse, your work, everything. Now, take the time to get this right. Do not let anybody railroad you into signing a contract prematurely - not the dealer, not your friends, not the media and certainly not yourself.
Unfortunately, at a dealership, the entire face-to-face showroom experience is designed as an ambush, where you will hear lots of self-serving, compelling sounding reasons to buy now. Not tomorrow, not next week - now, today.
These reasons are invariably bullshit. They just don’t want to see your beautiful money walk out the door, where you might find another dealer to extract your signature and a deposit. That’s all they really want from you.
Do a deal with yourself by separating your research from buying. Never pay a deposit and sign a contract during the ‘research phase’ of shopping for a new car, regardless of what you are told.
They’ll say, “This deal will end today” or “This is the last one at this special, unbeatable, price - guaranteed”. It’s all bullshit. It’s an ambush - so do not become a victim to this.
Mistake 2: Multiple transactions
Many people fail to acknowledge that there are often up to three transactions on the table. You could potentially be selling your old car (by trading it in), and buying finance, as well as buying your next new car.
It’s very easy to focus on the car and let the other two transactions go unnoticed. Obviously, the sales person can give you a great deal on your new car, if you unwittingly allow him to come up with the cost for the other two transactions.
So, I suggest you don’t start the ‘transaction’ phase of the process without knowing exactly how much your old car is worth as a trade-in (and therefore what price you’re going to put to the dealer), and without knowing what kinds of finance deals you’re eligible for. That’s a critical error.
You should try to lock in the new car price before even talking about the other two transactions. You just have to be assertive: “I haven’t decided what to do with my current car, and we can talk about finance later. Let’s just focus on this new car now.” Say it like that. The golden rule is: You’ve got the gold; you make the rules.
Mistake #3: Underselling your assets
It’s very easy to hand the dealer a significant profit by undervaluing your trade-in, in the current market.
The short backstory there: The car industry is reeling because there’s a computer chip shortage, causing a shortage of new cars. So, used car prices are sky-high because the shortage of brand-new cars has pumped up demand and prices in the used market
So, do not hand the dealer a significant profit, effectively paid for by your ignorance of current market value. They will try to extort you in this way, so you need to be ready.
Of course, you always get more cash selling privately. The benefit of selling your old car as a trade-in is convenience, because it is inconvenient selling privately due to the no-shows, the incessant low-balling by would-be discount hunters, trying to organise dates and times, and then having some nobody driving your car without a guarantee of buying it.
And if you’re a vulnerable person, like an elderly person, someone with a disability, a single mother, living alone - it can be a significant security risk, effectively inviting strangers back to your place, via the internet.
The third option is selling directly to a wholesaler, which is often what the dealer does with your car anyway, unless it’s an especially nice, late-model used vehicle.
Price-wise, the ‘wholesaler’ is going to give you somewhere between the trade-in and private sale price, and you can do most of it online. You fill in a form, send a few photos, a dude comes out to inspect the car, they pick it up on a flat-bed, and EFT you the funds. Very easy.
AutoExpert does this wholesaling thing all the time for people, so if you’re interested, click the ‘save thousands’ link up the top, fill in the form, explain that you want to wholesale your old car, we’ll get back to you - and there’s no obligation.
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Mistake #4: Know exactly what you’re signing - terms & conditions
Say you buy the car. You’ve got finance. It’s all a bit of a stretch, fiscally. But, hey, a car is an aspirational thing, and you like it. It makes you feel good, so, that’s nice.
Then, you make a mistake and you crash. Or some goose with no assets and no insurance makes a mistake and hits you at the lights.
You’ve got insurance and think you’re okay. Unfortunately, if the finance you signed up for, without really paying attention, has hefty ‘early termination’ penalties built in, these could substantially counter the cash settlement you get from the insurance company. This happens because the financier gets paid what they’re owed first.
These penalties could be several thousand dollars, so you can run that gauntlet in an informed way, or you can get so-called ‘gap’ insurance to cover you for these kinds of fees.
It’s up to you, just don’t go into this situation unaware of what you’ve signed up for. Read everything, have a solicitor look it over if necessary, or even your accountant. Don’t guess or hope - know.
Mistake #5: Asking dealerships for help
People ask car salesmen for advice. Don’t do that, ever.
This is textbook ‘conflict of interest’. But, people do this all the time.
Now, not all car sales people are snakes. But how would you know? You don’t. Car dealers have earned this reputation, historically, for a good reason, because it is a snake-dense vocation.
This is a huge risk. You could be exposing your bullseye-tattooed buttocks to a death adder. How would you know?
The conflict is you ask for advice, and if telling you the truth means you might buy a different car, obviously the sales person is going to avoid the truth because it goes against his sales objectives. What’s he/she going to do? Tell you the truth and lose the sale, or fib a bit and keep you on the hook?
The other problem with asking advice, even to a properly honest car salesperson, is that this person is in a position of authority during your dealing - they start leading you, rather than you leading them. And you really don’t want that.
You need to be on top, because that way you’ve got more control over where your money goes - and how much of it.
Critical car buying error #6: Perfect car myth
There’s no perfect car. It does not exist.
Lots of car buyers are caught in an endless loop because their search for a new car keeps taking them back to the start due to ‘this factor’ about Car A, ‘that factor’ about Car B, over and over again. There are as many potential cars and options or features as there are stars in the sky.
If this is you, it’s time to hit refresh and start again. Here’s how you do it.
Choose the car that’s closest to being right. Understand that car by deciding just how critical its deficiencies are: What can you live without? For example, you probably don’t need a sunroof, or the pumping premium sound system, but you might need three ISOFIX child restraint anchor points, or you need all-wheel drive, or perhaps the sexy wheels aren’t as important as climate control or heated seats.
Choose the car with the highest number of positive attributes and the lowest number of non-critical deficiencies.
It’s just like choosing your significant life partner or spouse.
You need to live with imperfections and love the things you love about the new car. Learn to tolerate the subcritical negatives.
Mistake #7: The test drive is not top priority.
Everyone, from the motoring media, to dealers, to car brands, and even your mates; they all blow the test drive out of proportion.
Test driving is almost irrelevant these days, unless you’re a driving enthusiast who is buying a specific performance car of your dreams. That’s a different story because driving dynamics really matter in this domain.
For everyone else, families buying SUVs or your adult kids or grandparents buying a small hatchback, not so much. The driving dynamics are all pretty simple to understand.
Here’s an example. Mainstream medium SUVs like Subaru Forester or Outback, Mazda CX-5, Hyundai Tucson and Kia Sportage are all direct competitors, and they’re all very good cars.
As a mechanical engineer, I’ve been a motoring journalist since the 1990s, I’ve worked as a dynamics consultant, setting up drive programs for new car launches, I used to do all the track-focussed handling tests for Wheels magazine back when it was relevant, and I’ve driven thousands of new cars, from Ferraris and Porsches to Mitsubishis and Toyotas.
Those four medium SUVs all drive just fine - they’re good. Trust me on this.
If you’re an average car buying consumer who drives to work and home, drops the kids at school and occasionally packs the car for a holiday, they’re all good and perfectly okay in terms of driving dynamics. For most people: ‘Good’ is a pass on driving dynamics, and they all pass.
People place themselves under tremendous pressure during test drives. And then they make the experience crucial in the selection of the car, and it’s really not.
All you’re going to experience on the test drive is, ‘This feels strange, and I don’t really know why, but I love/hate it’. You’re not learning much about the actual car, which leads us to Mistake #8.
Mistake #8: Comparing to your old car
Do not compare how a new car drives, feels, smells or sounds to your ageing shitbox.
Guess what. The new car will always feel better, so much better that you’ll want to drive away in that new car immediately without thinking about any of the other critical mistakes.
What do you expect? Of course the new car feels better than your old car, covered in filth, with a tired engine and transmission, 10,000 stale farts enmeshed in the seat fabric and beaten up steering relying on balding tyres.
If your ageing shitbox is the benchmark, every new car will feel impossibly excellent - perfect, even. But remember Mistake #6: the perfect car is a myth.
What you’ve gotta do here is compare three or four new cars with each other, and do it in a day. Make a few calls, set it up, four test drives, 90 minutes apart, in close proximity so that six hours later, you’ve been in four cars.
But you’re not just doing a test-drive comparison - there’s more to do than just drive it.
Sure, go through the motions, drive around the block and get a quick first impression.
But spend a lot of time sitting in the car and climbing all over it, operating the seats, installing a child restraint if you’re a parent with young kids, put the pram and the portacot in the boot. See if the car can cope with it, over and over, or see if it’ll even fit, because that’s what you’re literally going to do with it. If you’re a personal trainer, bring your instruments of torture and fit them up. Can you get your bike in the boot with all the seats folded down?
Check the spare tyre, whether it’s a space-saver or full-size, or if it even has one. FInd out where it’s mounted and how to access it. Does the car have Apple CarPlay and Android Auto, and is it plug-in or wireless, or absent - and do you hate where the USB ports are relative to where you phone will sit?
Can you get comfortable? How about your enormous kids - are they sitting with their knees in their eyes, and will they be doing that in five years, when they’re teenagers? This stuff matters.
PRO TIP: Make notes by writing down the six best things and six worst things.
REMEMBER: Do not transact that day. This is the research phase from Mistake #1: Impulse buying.
Instead, go home, think about it, discuss it calmly, rationally and objectively, with your significant other, and find the happy compromise.
You might even have a full-on argument over it followed by stony silence for a few days. This is how it needs to be done. How else are you going to get this right?
Mistake #9: A strict shortlist
Be more flexible regarding the shortlist of acceptable cars, especially now. The car industry is rooted at the moment; everything is upside down.
Waiting lists on some cars have spiralled out my months, even years (I’m looking at you, last-legs Kia Stinger >>, and Toyota LandCruiser 300 >>). There’s upward pressure on prices. Demand exceeds supply, which is quite inconvenient, especially if your car was written off last week, and you need a replacement immediately.
So, using that example earlier: Subaru Forester, Mazda CX-5, Kia Sportage, Hyundai Tucson, you might really want a Soul Red CX-5 Akera 2.5 Turbo, because it’s really pretty when the sun hits it.
That car, for you, could be six months away, or nine, or 12. But the delivery horizon on the new Forester, Sportage or Tucson could be in November or December, even January.
Now, they’re all good cars with more similarities than differences, for most people.
Alternatively, you might have heard of some enterprising smartarse ‘auto expert’ who does this car discount and acquisition thing for a living, who knows someone who can get you a graphite CX-5 GT next week.
In the current market, it might pay to be more flexible about what’s acceptable and what’s not. Grey versus red is a little too epistemically subjective and is really not worth the frustration, I’d suggest, and you can probably live without the pumping fat beats, chilled seats and wanky sunroof, which is roughly the salient difference between GT and Akera.
Mistake #10: Brand allegiance
Lastly, let’s tear down the barriers of brand allegiance and false authority.
Brand allegiance is if you’ve only ever bought Honda CR-Vs, for example, and you refuse to buy anything else.
Look around, read the news today, oh boy. Honda was great 20 years ago, but it’s a basket case today because sales are in freefall and they could leave Australia at any minute now, and your resale and local technical support will plummet if they do.
And those four SUVs aforementioned (Forester, CX-5, Sportage & Tucson) are all objectively better than a CR-V in all critical areas.
Brand allegiance can hurt you because brands rise and fall, and have done so since cars were invented.
But some people can be so stubborn on this, or at least their background information underpinning these preferences expired a decade ago.
Now, ‘false authority’. It seems like everyone’s an expert when it comes to buying a new car.
There’s a lot of pressure to know, which is very hard because most people like a good car, but they don’t research and deal with the car industry on a professional or personal level every day. Trust me, you don’t want to; don’t waste your productive life.
What you need to do is get independent expert advice, free from advertising and conflicts of interest. The quickest way to do this is to look for criticism - because there’s no such thing as the perfect car. So, when you don’t hear or see or read criticisms, you know there’s something to be sceptical about.
Plenty of would-be motoring experts will say, “Nah, they’re great cars.” But that’s an expired perception.
Men often contact AutoExpert who need to do two things. One: select a good new car; and Two: get the tick of approval from the wife before going ahead. This happens a lot, and it’s the truth.
This is why women are so important in the car-buying process. They often have the final decision, but their information is often out of date as well. Some people will say they ‘really want a Santa Fe but the wife won’t go for a Korean car because she wants a Pathfinder. What do I do?’
My solution to this kind of thing has always been to take a few test drives, and show her my reports to help change her mind. And don’t be mistaken, women do contact AutoExpert needing help to snap their fixated husbands out of their poor car-buying trance.
The truth is, you need to provide background context in these discussions with your significant other.
The financial crisis 15 years ago was a commercial springboard for Hyundai and Kia, in the way that it was a death sentence, or at least a degenerative disease for the likes of Nissan and Honda, while also rendering American brands neutered.
It took the South Korean brands about eight or nine years to develop their then-mediocre products into mainstream market-leading ones, and for the past five or six years their vehicles really have been outstanding. That’s objectively, defensibly true - sit in one; drive it.
But perception takes time to get around, and if you only ever think about this stuff every five or six years when you start thinking about buying a car, you can find yourself saying authoritative-sounding things that might have been true, two cars back, but which are divorced from reality today.
I guess you have to purge the memory, and research afresh, every time. And you have to be really brave, almost scientifically objective, to acknowledge that sometimes you don’t know everything.
This could be a $50,000 gamble - or much more - for you, and that’s hardly trivial. So I really hope this helps you get it right. If you’re still not sure, hit the link below and I can tell you what I really think, without fear or favour.
Still considering an SUV? The Kia Cerato is a solid value proposition, which could save you thousands while offering greater space, more features and build quality as good as any Toyota Corolla or Mazda 3. There’s even an affordable performance version. Let’s talk about Cerato…