Chapter 12: How to Buy a Car part 3

Chapter 12: How to Buy a Car part 3
    Chapter 12: How to Buy a Car part 3

    Chapter 12: How to Buy a Car part 3


    Shopping for the best car insurance can be a long process. Without a doubt there is a large percentage of car insurance customers who are paying more because they re too intimidated by the research that is required for finding the best deal. You should get used to the idea that you ll frequently need to call the insurance company and be put on hold to wait for a representative. Be adamant enough with the representatives to get the best deals and avoid getting ripped off, yet be courteous and professional enough so that the representative will still want to help you. Shopping for car insurance can start simultaneously with shopping for the vehicle. Some companies may be able to help you identify the vehicles with the lowest monthly insurance rates. Yet, some of them might not be able to provide a quote until you can tell them which vehicle you ll be driving. 

    Besides the vehicle price, gas and insurance, there will be yearly fees for vehicle registration. You can find out the yearly registration fee by contacting your local Motor Vehicle Division (MVD or DMV) or your state s department of transportation. Some states require vehicle inspections and emissions testing before your vehicle can be registered. This information is also available at the DMV.  

    There will also be costs for maintenance and repair. The best way to reduce these costs is by taking care of the vehicle and following the maintenance chart in the owner s manual. If the vehicle has a service light illuminated on the dashboard or if the vehicle starts to have symptoms - don t neglect it. Neglect will lead to further damage, which will require more expensive repairs. A simple example is brake pad replacement. Replacing the brake pads could cost about $200; but if you wait until the pads wear down completely and you start grinding metal on the rotor, then the repair could easily be $800 or more (review Chapter 10 for brakes). If the vehicle is well-maintained, it will last a lot longer -- maybe even 15 years longer or more. Overall, it costs less to maintain a vehicle than to buy new vehicles more frequently. 

    Maintenance costs will be a factor for determining which vehicle to purchase since some makes and models cost more to maintain than others. Often, a more expensive sales price of the vehicle also means that replacement parts and maintenance will cost more. Some car manufacturers could even have the same part for the basic and sporty models. Yet, if the same part is ordered for the sporty model then it will cost more. The parts manufacturer figures that if the customer could pay for the sportier model then they can also pay more for the part, even if it s the exact same part with a different label. 

    Review of Vehicle Expenses: 
    Sales price/monthly loan payment 
    Monthly insurance payment 
    Yearly registration fee 
    State inspection fees 
    Gas 
    Regular maintenance 
    Repairs 

    Once you re able to determine a ballpark figure for your monthly expenses of owning a vehicle, you ll be ready to start shopping. Some people find more comfort in purchasing a vehicle from a dealership because the organization within a brick and mortar facility gives them a false sense of security. The problem with purchasing from a dealership is that they add unnecessary services and fees. For example, in Arizona they might add a desert care package and it will be listed with all the other fees. Since most customers don t know what the desert care package is, they don t ask about it. It essentially means that they tinted the windows without asking if you wanted it, and they will absolutely be charging you more than it would cost to tint the windows privately. They might also list theft protection as one of the fees. This means that they had a technician etch a number into the windows. They might charge $200 for this service which takes the technician about 10-15 minutes to perform. Also, if you re vehicle gets stolen, the police department won t use this number to identify your vehicle. They ll use the VIN (vehicle identification number). 

    The dealership will have many tricks for justifying an increased price on the bottom line. You can avoid some of these expenses by going through each item on the list and asking them to describe exactly what this means. Don t accept the sales description; tell them to really explain it. Then, if you don t want it on the bill, tell them to take it off. If you buy from a dealership you can expect to spend the entire day there. Dealerships also offer poor trade-in value for your prior vehicle. 

    If you decide to buy from a dealership, the best time of the year to buy is December, particularly on Christmas Eve and New Year s Eve. In any given month, the inventory on the lot isn t necessarily owned by the dealership. They have the vehicles on a floor money loan. If they don t keep the vehicle beyond a certain time period, they don t have to pay interest on the loan, and they make the profit from the sale without an additional expense. If you happen to pick a vehicle that is near the end of its loan period, then the dealership might be willing to sell it at a cheaper price. December is a particularly good time since people are more willing to buy during the holidays and the dealerships want to increase their sales numbers before the end of the year. This makes them more willing to negotiate, regardless of whether the loan period for the vehicle is ending. 

    If you buy from a private owner, there is no guarantee that they won t tell you little white lies about the vehicle in order to get you to buy it. However, a private owner won t be as likely to trick you into spending more for the vehicle than it s worth. There are tools that you can use to determine the value of the vehicle, and give you a more accurate starting point for a fair price. 

    Before deciding which vehicle to purchase, you ll want to write down some of the features you want, or decide on the purposes that the vehicle will serve. A pickup truck might make an excellent working vehicle, but the gas mileage could make it a lousy commuter vehicle. Will it be meant for one driver or more than one driver? How many passengers will be transported on a regular basis? Do you need a lot of trunk space? Do you plan on driving it until it dies, or will you sell it once it reaches a certain age or mileage? If you know that you ll eventually sell it, then you ll want to pick a make and model with a good reputation for resale value. All these features and more will help determine which vehicle you should look for. 

    If you buy from a private owner, the shopping will begin within the comfort of your own home. Some resources to find cars for sale include www.Craigslist.org, www.AutoTrader.com (and the Auto Trader print publication), Yahoo! Autos 
    (autos.yahoo.com), www.Cars.com, and many free publications which are given away at local gas stations and outside public libraries. 

    When you find a vehicle that interests you, look up the make and model on Kelly Bluebook (www.KBB.com) to see the listed value. Sometimes a seller will list it for higher than the Kelly Bluebook price on purpose. There could be a variety of reasons for doing this, which include: hesitation to sell the vehicle, hope to sell it for more, upgrades which the owner added, or simply the expectation to negotiate. 

    If the vehicle says OBO , it means or best offer . This is an open invitation to negotiate. There may also be a variety of other abbreviations, especially if the ad is in print. Printed advertising fees are based on the number of characters or words, so the seller is trying to save money on the ad. If there is ever an abbreviation that you don t understand, look for an abbreviation key in the publication or look it up online. 

    If the vehicle has a restored title , that means that at one time the vehicle had enough damage that the cost of repair was more than the total value of the vehicle. It may have been in an accident, flood, or other event to cause the damage. The repairs can include anything from engine repair to cosmetic changes to the vehicle. Generally, restored titles are less expensive, but the risk that there is something wrong is much greater. 

    Once you find a vehicle you re interested in, call or email the owner for more information. Since the ad may not have all the information you need, here are some questions you might want to ask: 
    Go through the features listed on Kelly Blue Book and gather any information you need that is not on the ad (Is it a two door or four door? Does it have a CD player, etc.) 

    If you re a non-smoker, was the vehicle ever driven by a smoker? A smoker wouldn t care much either way, but a non-smoker will find it s very difficult to get the smell of smoke out. Smokers who know they ll sell their vehicle eventually should never smoke in that vehicle because it reduces the resale value. 

    Has it had its regular maintenance? Oil changes at 5,000 miles? Etc. -- A vehicle with 100,000 miles that has had regular maintenance is better than a vehicle with 20,000 miles and never been maintained. 

    Would it be OK if I test drove it to my mechanic as part of the evaluation? 

    Is the Carfax provided? -- A Carfax is a report of all the times the vehicle has had an insurance claim for repairs. (http://www.Carfax.com) If you buy from a dealership, they usually include the Carfax. If you buy from a private owner, they may or may not provide the Carfax since it costs extra. Auto Trader online has a place which indicates if the Carfax is available. 

    What was the car used for and where was it driven most of the time? Were dirt roads a part of the regular commute? Etc. -- Some of the best vehicles were only driven to the grocery store and home by an old lady who never went anywhere else and always took care of her things. Buying a used car from an organization who regularly kept them maintained for top reliable performance can also be a good source, such as an LDS Mission or a business. 

    Is the price negotiable?  

    If you re satisfied with the phone or email interview, then you ll schedule a time with the owner for seeing the vehicle. 

    After reading this book, you ll have a much greater advantage when evaluating a potential vehicle for purchase. You ll know to check the dashboard lights, the horn, the exterior lights, the battery, and many other parts of the vehicle because now you re familiar with how a vehicle works. You ll want to make sure it comes with a complete spare tire kit. Try looking down the side of the vehicle at different angles to see how the light reflects off the paint. If you detect two different coats of paint or areas where touch up paint has been applied then ask the seller about it. If the side panels and doors look smooth from one angle but then you detect some waviness when looking from a different angle, then the vehicle may have been in a side-impact collision and its safety features could be compromised. 

    You ll want to test drive the vehicle. See how it handles, accelerates and brakes. Go to a stretch of road like a freeway onramp or a long stretch between street lights where you can floor it. At some point in the inspection, you ll ask for a Carfax report or any of the information the seller might have on previous maintenance and repairs. 

    One of the smartest things you can do is take the car to a trusted mechanic as part of the evaluation. Find a place where you can develop a direct working relationship with the technician and not a service writer (review Chapter 11 for a description of service writers). Crawford s Auto Repair would be your best choice for a pre-purchase inspection if you live in the Mesa-Chandler-Gilbert area of Arizona. Some shops offer a free estimate but if they know you re requesting the evaluation to buy a vehicle, then they might charge for the inspection since there is less of a chance of you buying their repair services. The inspection fee will be worth it because the trained eye of the mechanic and the tools they use for diagnostics will enable them to spot things that you don t even know to look for. They ll look at the body of the vehicle from the inside, raise it up and look at the drive train and the underside of the engine, the brakes, and they ll attach their diagnostic device to the vehicle computer to receive any trouble codes that are stored on the vehicle s computer. A mechanic s inspection will tell you much more information than simply looking at the vehicle or test driving it yourself. And a seller who is confident in the value of the vehicle will allow you have it evaluated by a mechanic. 

    After a personal inspection of the vehicle and the mechanic s inspection, if possible you ll want to use an internet-enabled device to go through the Kelly Blue Book estimate again. Now that you have more information, you ll be able to get a more accurate estimate from Kelly Blue Book. Also, ask the mechanic for his best estimate on what the vehicle is worth. Between Blue Book and the mechanic, keep this baseline estimate in mind and do not go over it when negotiating. First of all, are you willing to pay this baseline estimate for the vehicle? If you don t want the vehicle enough to negotiate, then just let the owner know that after evaluating the vehicle you re not interested. If you are interested then you can start negotiating. 

    Consider the asking price of the vehicle. Is it lower than your baseline estimate? If it is, then it s your new baseline and do not go above it. If the asking price is above your baseline estimate then still do not go above your baseline. You ll want to make a counter offer to be as low as it can be without being offensive. It should at least be a couple hundred dollars lower than the Kelly Blue Book estimate. And you ll use the information you gathered during the inspection to justify the lower offer. If it needs a repair, then you ll mention that the price of the repair should be deducted from the asking price. 

    Be patient. Do not get excited to buy a vehicle. Read the seller s body language. Hold your ground. Read a book on negotiation, or many books. There is so much to this art and usually the better negotiator gets the deal he or she wants while the other person makes compromises. If you re too anxious to buy the vehicle or if you re too lazy to go through the process of calling sellers and inspecting a vehicle more than once, then you ll probably pay more. Expect to go through this process a few times before finding a satisfying deal. 

    After you agree on a price, the seller will take the title to the Division of Motor Vehicles (DMV) or a private title shop and get the title notarized for selling the vehicle. You might use that time to go to the bank or a title loan store to get the money to pay for the vehicle. You can arrange for the best type of payment with the seller. If you pay for it in full from your bank account, then paying with a cashier s check made out to the seller may be more secure than carrying cash. Then you and the seller will meet up again to trade the payment for the title and keys. After you receive the title, you ll have to take it to the DMV or to an independent title service shop to have a new title drawn up in your name and get your license plate. Within the next 10 days you ll also need to call the insurance company to have the new vehicle added to your current coverage plan or purchase new insurance. 

    Finding the right vehicle for your needs at the right price will be very rewarding. If you do your homework, put in the effort and follow the steps in this chapter, then you ll be able to find a good vehicle that you can afford. Good luck! 


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