Before You Buy a Car, Make Sure You Avoid These $20,000 Logic Traps

The "car guy." You know one. I know one. Mom knows one. They're the go-to when your lease is up; when you're in the market for a new car. They know the best deals and discounts. They're a wizard in the dealership. It's kind of their thing.

Unfortunately, not everyone has a car guy to snag them one-of-a-kind deals. Good news is, there are a handful of things you can do to keep prices low, even when the dealer is upselling you on those triple-double premium faux leather seats.

It's like, yeesh. Simmer down, dealership dude, we get it.

Thing is, dealers sometimes use mental tricks to get buyers to spend more -- a lot more. There's a reason nearly 40% of car buyers had regrets in 2022, according to LendingTree. Before you buy a car, make sure you avoid the following logic traps that can hurt your personal finances.

1. "This or that"

Your dealer has shown you around, and you've heard the spiel. It's decision time. The dealer asks you whether you want a mid-range model… or that. That is a beautiful, souped-up version of the boring ol' base model. It's got all the bells and whistles. It's price tag? High. Very high.

Now, you're stuck. On one hand, affordable is a-ma-zing. On the other hand, the cheaper option looks, uh, kinda ugly(?) next to the fancier model. Which do you choose? Maybe you pick the mid-range model because it's cheaper. Or maybe you treat yourself to something fancy.

But the best choice is often neither. Dealers sometimes lump mid-range models with fancy ones on purpose. The idea is that once you focus on the pricier models, you'll opt for something more expensive than the base model. You lose sight of all your options.

Be aware of this trick before shelling out for a spruced-up car. An affordable base model could save you thousands, especially when you factor in car insurance costs.

2. "I've already put so much time into it"

You've spent hours researching the perfect car, and then you spent a day lurking around your local dealership. It's hot. You've been on your feet all day long, and the dealer has shown you pretty much every possible configuration of your dream car.

There's just one, tiny problem: You dislike it. It looked better online; your friend overhyped it; driving it makes you carsick. For whatever reason, it's not nearly as appealing as you thought.

However, you've spent so much time examining the car, you're tempted to buy it regardless. It happens. There's a phrase for this strange line of thinking: sunk cost fallacy, when you spend so much time or energy on something, you're reluctant to give it up and start over.

Resist the temptation to buy a car because you're fed up. I get it; I've been there. But a car isn't a $1.50 Costco hotdog combo -- it's a purchase easily costing $20,000 or more. In mid-2023, the average new car price was $48,000; the average used car cost just under $27,000. In short: expensive.

When in doubt, sleep on it. The car isn't going anywhere, and you might save yourself from making a regrettable purchase.

3. "It's cheaper than the first offer, so it's a deal"

It's purchase time. You've seen all there is to see, and you're ready to finance a car. Your dealer tosses out a number. After a bit of back and forth, you shave a couple thousand off the initial offer. Whoo! You've done it! You've snagged a deal! Or have you?

Car buyers tend to latch onto the first number they hear as if it's "the real cost" of a car. But often, that's false. Sometimes, dealers toss out unreasonably high numbers to start; even after you've shaved a couple of percentage points off, the car remains overpriced. Tricky, tricky.

This particular logic trap is known as anchoring bias, when someone relies too heavily on initial information when making a decision. It's easy to fall for. But there's an easy counter: research.

To avoid overpaying, collect a few price quotes on similar vehicles. That way, you create your own anchor (instead of letting the dealer do it for you). It'll give you the confidence to walk away from a purchase -- you know you could get better prices elsewhere.

And while you're at it, collect more than one auto insurance quote. Some car insurers are better than others. Shop around to snag the best of both worlds; no car guy required.