Purchasing a vehicle is a huge milestone in your life, especially if it is the first vehicle you have ever financed. There is a world of difference between paying cash for your vehicle and taking a loan out on it. Because of this, you want to make sure you cover all of the necessities so you don't end up in trouble later on down the road. When preparing to purchase your vehicle, here are a couple of mistakes you want to avoid.
Not purchasing GAP Insurance.
Many people have never even heard of GAP insurance. For those who have, they often end up walking away without adding it to their vehicle loan. Unfortunately, that could be one of the worst mistakes you could make. While no one expects to be in a car accident, it can happen at any point in time. It doesn't have to be anything you did. Someone could pull out in front of you or smash into the side of your vehicle and leave you with nothing to drive.
While some insurance companies will end up paying your vehicle loan off, that isn't always the case. You could be left with a balance on your loan even after the insurance company pays out. Not only do you have no vehicle to drive, but you have to pay money for it too. GAP insurance steps in and pays the difference from what the insurance company didn't pay to help you start out free and clear again. This gives you something to work with and prevents you from having to pay for a vehicle that you cannot use.
Not purchasing an extended warranty.
No one wants to think about their vehicle breaking down and needing repairs, but it happens all the time. Instead of being stuck having to pay for engine or transmission repairs, you could use your dealer services extended warranty to pay for it for you. Some companies have a small deductible and others have a $0 deductible. Make sure to ask about what plans the dealer has available to make sure you get the one that is going to work for you.
The added premium is well worth it. In fact, many of the plans are relatively inexpensive when you factor the cost of the plan over the life of your loan. It could be under $10 a month added to your payment. However, the cost varies, so you need to go over the specifics with the dealer.
By not making one of the mistakes above, you can keep more of your money in your pocket.