Buying your first home or car may not seem to have much in common with purchasing a laptop or big screen TV, but all of these items tend to have expensive price tags which take scrimping and saving to fit into your annual budget. Purchasing a big-ticket item can break the bank if you’re not careful, but you can avoid severe financial consequence with a little proper planning.
Here are 5 Tips to help you Avoid Buyers Remorse on those Big-Ticket Purchases:
Plan Your Financing & Payment Method First
Before you begin shopping, find out how much you can afford to spend by assessing your savings fund and credit limits, then get prequalified for your financing if you need a loan. Save up the money you need to pay off the balance to avoid paying interest whenever possible. And if you must carry a balance, use your lowest interest rate credit card. Don’t automatically apply for store credit/member cards just to get a discount or one-time benefit (such as free delivery) if you don’t anticipate paying off the balance immediately – these cards often come with high fees & interest (do your research first).
Establish your Goals and Priorities
Now that you know how much you can spend, it’s time to decide what features you need and how much they cost. Make a list of desired features – how many bedrooms do you need? Gas-mileage? Online Capabilities? – and really assess whether they meet your actual needs, or whether you’re just trying to keep up with the Joneses.
Research and Compare Prices
Don’t rush into making big purchases – that is how buys remorse happens! Compare prices online for cars, laptops, TVs or homes in the neighborhood where you want to live so you have an idea of what’s available, what’s a bargain, and what’s a ripoff. And set up price alerts whenever possible.
Read reviews in Consumer Reports, study neighborhood profiles, visit more than one store or e-market. When possible, test-drive your potential purchase to see if reality matches your expectations. And if you’re buying a home, get a home inspection to avoid potential problems and financial drains down the road.
Get Ready to Negotiate & Buy When Sellers Want to Sell
Your bargaining power is highest when sellers most want to sell — at the end of the quarter, in a slow season or when new inventory is about to arrive and salespeople have to get rid of unused but out-of season models. Have your cash and financing information available for a down payment and your upper spending limit firmly in mind.
From there you and your seller can be flexible on options to move forward. The seller may want you to carry closing fees in exchange for dropping the price. Or for more down payment , they’re willing to throw in an upgraded interior car package. A little back and forth will help you both reach a beneficial price and smooth transaction.
Keep your guard up against last-minute costs
In the excitement of finally making that big purchase, you should be alert to the possibility of last-minute expenses that can trip you up. A salesperson is likely to encourage you to buy an upgraded package, redundant insurance coverage or extended warranties which may not be needed and end up costing extra.
A little planning and research will go a long way to ensure you get a fair price and can enjoy the full value of your big-ticket purchases.