(One: What's the Best Car Out There for You?)
I'm constantly asked, "What is best car out there—for me?"
My answer is a series of questions:
What category are you interested in?
What price range can you afford?
Do you want a sedan, sports car, or convertible?
Do you want a minivan, truck, SUV, hybrid, or crossover?
You get the idea.
Before you buy a car, you must consider a world of choices.
My job is to help you know what cars to consider for your needs, what questions to ask yourself and the seller, and how to successfully close the deal. As buyers we need to be empowered. This chapter will guide you through selecting and deciding on the perfect car—for you!
So you want to buy a car. Do you go with a used car? Certified pre-owned? Should you buy a car from an online auction site? Is it best just to get a new vehicle?
A car dealership can be an intimidating place, but there are simple ways to get prepared to be happy with your choice. With the abundance of information on prices and options on the Internet, from all kinds of car magazines and just plain talking to your friends, more people are doing research online and arriving at dealerships knowing exactly what they want. Follow their fine example. Before you rush to begin shopping, decide first what you want. At least try to pull a few ideas into the ballpark. Ask yourself what meets your budget, family size, and lifestyle.
Many of us overlook these details and buy the first car that fits our emotional needs the exact moment we are standing in a car lot. I can't begin to count the people who've told me how unhappy they are with such a purchase. It's not that they hate their car—it just doesn't meet their needs. Now they are stuck in a lease or they can't sell their vehicles without taking a loss.
You never want to put yourself in that situation.
So let's take a step backward and read the road signs! Better to evaluate your needs first and make your purchase from an informed stance, rather than a purely impulsive and emotional reaction.
What kind of car do you picture yourself owning?
Should you buy a zero-option silver Honda Civic Hybrid or a fully optioned bright blue Toyota Sienna? Do you belong in a classy black Cadillac, an economical white KIA Spectra four-door sedan, or a hot red Ferrari? (Remember that all Ferraris are red—but red is just a pigment of your imagination.)
I personally could never drive a wagon or minivan. Not that they are bad vehicles or don't fit my needs; it's just a personality thing. In order to be content with what I drive, I feel that my car has to fit my lifestyle like a glove, and that includes fitting my aesthetic sense. I prefer a sporty, unique vehicle that says this automobile belongs to Lauren Fix. I like to stand out in the crowd. "Arrest Me Red" is my color of choice. (I have to hope the police treat me kindly.) It's important to purchase a car that fits your personality and your needs.
Unless your budget says otherwise, if a vehicle doesn't fit your style, leave it at the sales lot.
Every time I hear "I only need a car to get me from point A to point B," I cringe. I want to fight that philosophy. By that logic someone might say, "Who cares what I wear? My clothes exist only to keep me from being arrested," or "I'll eat anything. I don't hate any food and it's no more than sustenance to me." I think you get the point. We spend around 30 percent of our lives in our cars. They have a huge impact on our daily lives. We need to be happy with what we buy.
What you want and what you need may seem to lead to different cars. So grab a piece of paper and let's break down this wide array. Let's find a car that makes sense for you.
A Few Questions to Guide You to The Right Vehicle
The questions below should get you thinking about your lifestyle, your needs, and your wants; after you answer these questions you should be in the right frame of mind to make a decision on what types of vehicles interest you and fit into your lifestyle. So here we go…
How many people are in your family?
It may sound silly, but sometimes we fall in love with a great auto and forget what we really need.
How many people do you usually carry in the car?
Think soccer games, dancing, friends, carpooling, parties. Do your kids always say, "My mom will drive"?
Will you be carpooling?
Remember that backseat leg, head, and shoulder space is critical for adults and their laptops and briefcases.
If you have pets, do they ride in the car with you?
I have my Yorkies in a dog car seat, but some people prefer harnesses or crates. Animals still take up a seat in your vehicle. Did you consider that?
Is anyone in your family involved in sports or other activities?
Don't forget that even scrapbooking supplies and coin collecting can take up a lot of storage space.
Will you be using your vehicle to travel to college, on vacation, cross-country?
You may not carry a mattress, dresser, and dorm gear every day, but if moving is something you do a lot, a MINI Cooper is not for you.
Do you plan to tow boats, bikes, snowmobiles, campers, trailers of any kind?
Be sure to know the weight of what you are hauling and the towing capacity stated for the vehicle. The type of hitch and trailer may also influence your choice of vehicle. Some can be installed while others may require trailer brakes and special attachments.
Do you live in or travel to an area where it snows?
Snow can limit your choices. Think about your climate when you purchase and not just those nice summer days.
Does a convertible make sense if you are concerned about your hairstyle?
Don't laugh. Many people buy them and never put down the top. Too bad, because the open air can be very liberating.
Do you plan to expand your family in the near future?
If you plan on having a family or have elderly family members traveling with you regularly, make sure to consider the strains of installing car seats, belting in children or passengers, and entry and exit for elderly passengers, which can be a stress on your back and theirs. Consider a lower riding vehicle for everybody's ease.
Is gas mileage a critical issue to you?
If you sit in traffic, a hybrid should be considered. If not, and there's a budget issue, you'll find many great fuel efficient vehicles to choose from that will fit into your budget.
How long do you plan to keep this auto?
Look at factory warranties, resale values, cost of ownership, and insurance rates. The Internet can guide you to forums where you can chat with owners of specific vehicles. This can be a great resource. (We'll chat about buying, leasing, and budgets later.)
Does a full-service maintenance plan seal a deal for you? (Will it keep you from performing or force you to perform proper maintenance on your vehicle?)
If yes, then get it. If you want to do it yourself, then pass on the maintenance plan.
When do you need a new car?
If you are what you drive, you may want a new car. If you drive a lot of miles, you may want a new car. If a factory warranty is important, you may want a new car. If price is not a big issue, get a new car.
Now Let's Get More Specific…
Do you prefer a two-door or four-door sedan?
If you have little kids or babies, or if you carpool, go for a four-door.
How do you feel about a hatchback?
A hatchback is great if you prefer a two-door car and haul equipment. It looks a little sportier, too.
A station wagon?
Why not? It has four doors and a hatchback—great for a bigger family.
Is a minivan what you really want?
You don't have to be a soccer mom. For those who work in a service job and travel, this may be the best choice. You get the ride of a car with the storage of a truck.
Are you attached to the height and vantage point of an SUV?
SUVs are great if you like a higher point of view. You'll pay in fuel economy, however, because SUVs are heavy. These vehicles were designed for hauling, storage, and off-road capabilities. If those activities don't fit your vehicle use, keep the dollars in your pocketbook.
Would a crossover utility vehicle (CUV) fit the bill?
A crossover is a combination of a station wagon, a sedan, and an SUV, like a Ford Edge or Infiniti EX. You get the car ride, better fuel economy, and the SUV storage—these vehicles are a whole new segment of the industry that is growing quickly.
Are you thinking about a hybrid vehicle?
Remember, hybrids were designed to protect the ozone and reduce harmful emissions; fuel mileage is secondary. If fuel consumption is your main concern and you spend a lot of time sitting in traffic, don't forget that there are some great alternatives that get fantastic fuel economy and cost less than hybrids. Here are some great hybrid choices: Toyota Prius, Honda Civic, Ford Escape, and Saturn VUE Green Line.
Hybrid Cars—Are They Worth It?
Hybrid cars weren't designed for better fuel economy. No matter the hype, they were designed to protect the environment. Great fuel economy is a bonus. I get a lot of questions about hybrids. You will have to decide what best meets your needs and budget.
What should I think about before buying a hybrid?
While there's no question that hybrids are more fuel-efficient than their conventionally powered equivalents, the difference is not as great as the fuel economy numbers suggest. As of 2008, new calculations for fuel economy are changing to take into account today's driving lifestyles, which are different than those of the 1960s. Prices for hybrids are also higher than comparable gasoline models, as much as $3,000 to $6,000 more. Despite impressive gas mileage, you may have a tough time making up the price difference at the pump. Breaking even on your hybrid could take five to seven years, depending on the cost of gasoline.
How fuel efficient are hybrids?
Hybrids are designed to work so that low-speed driving uses the battery-only mode with higher speeds using the gas-driven power. When the gas engine is offline, no fuel is used, though fuel is needed to automatically recharge the batteries. Each system works slightly differently. In normal use, the margin between truly comparable hybrid and nonhybrid cars could be less than 10 percent.
Will they stand the test of time?
Yes, they should stand the test of time, but basic maintenance is still required. Gas-electric hybrid engines use several large batteries that are very reliable. Disposing of the batteries when they outlive their usefulness raises environmental challenges. Replacing a battery five to seven years down the road could be expensive—and it may be hard to dispose of a battery that is considered hazardous waste. A solution is farther down the road.
Does it cost more to maintain a hybrid?
No, maintenance is not significantly more expensive than for a non-hybrid. As with any car, you need to "Be Car Care Aware." On top of initial hybrid cost you will have to keep up with basic maintenance. This includes changing the oil, coolant/antifreeze, wiper blades, tires, brakes, and filters. I suggest following the directions in your owner's manual. If you fail to do this, your automotive expenses are sure to increase.
Separating the truth from hybrid myths:
No, you don't need to replace the electric motor.
No, you don't need a special mechanic to service the car for oil changes.
No, the EMT rescuers won't refuse to help you because the car is a hybrid. Yes, there is a fear or myth that EMTs may get zapped from the electric motor or batteries.
New training techniques for EMTs have dissolved most of these myths.
No, the batteries will not create more of an environmental mess than they cure.
Does a hybrid give you any savings besides better fuel economy?
Federal and state incentives will go a long way toward reducing that hybrid premium. Check online and at the dealership. Your state or company may have additional incentives.
Many people buying and driving hybrids are not trying to save money. They have other reasons such as reducing emissions, reducing our usage and dependence on oil, and being friendly in other ways to the environment.
Create A Car Buying Checklist
(Photocopy this list and take it with you when you go to buy a car.)
1. I'm looking for a
SUV
Minivan / Van
Wagon
Sedan
Convertible
Luxury
Truck
Coupe
Hybrid
2. Key points to consider in deciding if this is your car
Visibility—can you see out the windows, and can you see the corners of the auto, when sitting comfortably in the driver's seat?
Are the seats comfortable for the driver or potential drivers?
Test-drive the model that you're thinking about buying.
Begin with a visual inspection of the exterior.
Inspect the interior for proper fit of components such as armrests to your body.
Be sure that the safety belts feel comfortable.
Make sure that all interior controls are within easy reach.
Check to ensure that gauges are clearly visible and easy to read.
Be certain that your feet comfortably reach the pedals.
Be sure that the driver's seat gives you a good view of the road with proper back and thigh support. Visibility is most important.
Check for good engine pickup, performance, smoothness of ride, and the ability to handle bumps and curves.
Check the rearview mirror to be sure no tailgater is behind you, then brake hard to get a feel for how the vehicle comes to a stop.
Drive the car on a freeway (or other limited-access highway). Check acceleration from the entrance ramp to the high-speed lane and see if it makes you feel comfortable.
Observe noise levels at highway speeds.
Drive some of the roads that you usually travel.
Try parking the vehicle in a tight parking spot to get a feel for turning radius.
If you can park your car in your garage, check the fit.
Test-drive the vehicle for as long as you need to. Don't feel pressured to drive a certain route designed by the sales consultant.
Drive all the cars you are considering before you make a final decision. If the sales consultant pressures you to make a decision, remind him or her that you still have other cars to test-drive. Most good salespeople will respect that.
Never buy on impulse. Come back a second time, or a third.
3. Find a good dealer
In my travels I've heard endless stories of vehicle purchases from both dealers and buyers. Dealers complain that customers want only the lowest price and base their decisions on that one factor. Consumers complain that all salespeople are trying to rip them off. So where are all the straight-shooting dealers? They are probably right in your neighborhood. Where are all the customers who look for service as well as price? They're right outside the dealership window, looking in. Let's take a closer look at the situation. What makes a good dealer?
A dealer wants to create a relationship with a buyer.
The dealer wants to provide long-term quality service on a vehicle.
It's in the dealer's best interest to make you happy.
Good service leads to referrals and, in turn, leads to more sales.
What makes a successful sales consultant? They're the ones who lend you their cars when yours is in for service, they send birthday cards, follow up to make sure you are happy with the product and the service, offer you a tour of the dealership and introduce you to key people to make life easier, invite you to seminars at the dealership, and create a friendship that always leads to referrals. This is true with any business relationship, and that's what you have to build.
How to Know When This Car Isn't The Car for You!
The best approach to buying a car is to treat the process like eating a jelly doughnut. If you don't like the first bite, pick another flavor.
VISIBILITY This may be obvious, but if you can't see out of the windows or can't judge the location of the car's four corners, then this isn't the car for you!
SEATING COMFORT We are all built differently and seats don't feel better as time goes by. If you can't find a seating adjustment that makes you comfortable, then this isn't the car for you!
ALL THE NEWFANGLED OPTIONS AND CONTROLS If you feel that a car's controls are too complicated (especially the new all-in-one buttons) and you hate technology, then this isn't the car for you!
CUP HOLDERS This may sound petty but think about it. If you always have a cup of coffee or bottled water or transport kids who like drinks in the car, then cup holders are important in your purchase decision. If a car's cup holders are designed for tiny cups and you believe you'll be wearing more coffee than you drink, then this isn't the car for you!
SAFETY Have you ever been inside a car where—no matter its well-touted safety features—you still didn't feel safe? If things work best when you trust your instincts, then this isn't the car for you!
SIZE If you can't reach the pedals or, when you do, you are too close to the airbag—twelve inches is the safest minimum—then this isn't the car for you!
TELLTALE SENSORY CLUES If a car smells moldy or holds any other strong scent and you fear it may be a flood-damaged car, then this isn't the car for you!
STORIES If the person selling the car—new, used, online, or private—can't give you proof of maintenance, or straight answers regarding possible crash damage, driveline issues, or liens, then this isn't the car for you!
CHECKING IT OUT When a vehicle's seller won't let you have a technician of your choice inspect it, then this isn't the car for you!
TALKING THE NUMBERS When it comes to financing and a dealer or private seller won't negotiate and you get that gut feeling something is wrong, then this isn't the car for you!
Make Sure The Dealership Deserves Your Business
Do the dealer and his or her team listen to you?
Are they prompt, courteous, and thorough in responding to your needs?
Does the physical appearance of the showroom, team, and products convey a feeling of professionalism and quality?
Do you get the sense that the salesperson has been properly trained and really knows what he or she is talking about? If not, ask for another salesperson.
Are you made to feel that the dealership and its team really care about your concerns?
If all the sales consultant wants to talk about is monthly payments or financing before you take a test-drive, then this is not the dealer for you. Your needs must come first!
There are a lot of great dealers out there—they should make you feel comfortable with the entire deal. They're in business to make money and be a part of the community—nobody wants to lose a deal. The bottom line is doing your homework, not just on the car but on the dealership, too.
Do your homework first. Use magazines, Better Business Bureau, and the Internet to find information.
Know your budget, family needs, style, and taste.
Narrow down the options before you head to the dealerships.
Never commit to buying a car on the first visit.
Ask friends for referrals to dealerships and salespeople.
4. Research car safety
I know of dealers who will try to save you a few dollars a month by selling you a vehicle without certain safety features such as ABS or side impact airbags, but these features protect you in case of an accident. Safety technology is designed for specific automobiles to protect the driver and passengers—this is never an area to skimp on. Always look for 4-or 5-star crash test ratings. It's worth the investment to get the safest vehicle you can afford. These crash test ratings are described in Appendix A and are easy to understand.
DO NOT skimp on safety items. I always get:
Side impact airbags and curtains
Traction control
Electronic stability control
Antilock brakes
Any safety item is worth your investment—it cannot be added later like other options
Airbags and side impact air curtains
Airbags have saved thousands of lives since their introduction in the early 1980s. (The first patent on an inflatable crash-landing device for airplanes was filed during World War II) In a collision, your airbag deploys in less than a tenth of a second to protect you from the forces of a head-on collision. Airbags are now standard on most new cars. Side impact airbags and curtains may also be options, and understanding how they work can save your and your passengers' lives.
Tip
Babies or children under 4' 7" should never ride in the front seat of a vehicle because rapidly inflating airbags can severely injure or kill small front seat occupants. If there's a child in your future and you have a two-seater, ask your dealer to install a disconnect (or on-off switch) for the passenger-side airbag. You don't want it permanently disconnected; airbags do save adult lives.
An airbag slows a passenger's forward motion. The constraints within which it must work are huge. The airbag has only the space between the passenger and the steering wheel or dashboard and a fraction of a second to do its job. Even that tiny amount of space and time is valuable. If the airbag can slow a passenger safely rather than forcing an abrupt halt to his or her motion, then it has done its job. The whole process happens in only 1/25 of a second, and that little slice of time is enough to help prevent serious injury.
Watch Out for Flood-Damaged Cars
Most of us don't think about flood-damaged cars. Every time a hurricane or flood impacts some area of the country, automobiles are damaged. While they are often judged "total loss claims," many are not destroyed by insurance companies or individuals. These vehicles are not safe! Many are filthy and are filled with bacteria, ecoli, and mold from sewage and water, which can affect your health.
If you buy one of these cars
There is no warranty from the manufacturer for repairs due to water damage!
Many of these vehicles have electrical problems. If yours decides to quit on the highway, other cars could collide with you.
If you are involved in an accident, your airbags may not deploy.
Seat belts don't function properly.
Antilock brakes may not work.
You are driving a potential accident.
You are creating a health risk for yourself and anyone who rides in the car.
These vehicles aren't safe on the roads. Because of natural disasters in recent years, as many as 650,000 cars were damaged. The cars are complete scrap!
Never buy a flood-damaged car! Many passive safety items may not function and may cause a health hazard as well. COURTESY RICHARD SEAMAN WWW.RICHARD-SEAMAN.COM
Do these cars really get into the marketplace?
Oh yes, they do! One insurance company recently settled a $40 million lawsuit when it was disclosed that the insurer had dumped almost 30,000 totaled cars at auction with out bothering to have them retitled as salvage vehicles. Many of those vehicles were shredded into little metallic pieces. Others, however, wound up in wholesale auctions or were sent to other states in a practice called washing titles. (Not all states print on the title what happened to that auto.) If in doubt, walk away from the deal!
How to avoid buying flooded cars
First, buy from reputable dealers.
You can find great vehicles buying from private sellers but beware of "curbstoners"—people who sell numerous cars yet claim to be private sellers, thereby avoiding basic government oversight and lemon law coverage.
Avoid auctions, unless you are experienced with them. Read all the rules carefully.
Check to make sure there's a match between the vehicle identification numbers (VIN) on the door sticker and the dashboard tag.
Carefully inspect the inside of the car. Look for watermarks on door panels, radiators, wheel wells, and seat cushions.
Use your nose. The smells of mildew and rot are difficult to disguise.
Look for rust on unusual places like door hinges, hood springs, under-dash brackets, and trunk latches.
Look for water and moisture inside exterior lighting.
Beware of cars with new or mismatched upholstery.
Look at the car's air filter. If it's made of paper, check it. If it has water stains, the car has likely been flooded.
Ask the seller if the vehicle has had flood damage. Answers such as "Not to the best of my knowledge," or "The previous owner didn't tell me of any flood damage," are red flags. Get the answer in writing with the bill of sale. And get the vehicle inspected by a certified technician before placing an offer.
Ask to see the title. If it is not stamped "flood" or "salvage," get the car's history through online sources such as Carfax to find out if this vehicle has come from a recently or previously flooded area of the country.
Only 10 to 15 percent of flooded cars are reported to Carfax and similar agencies, so have a certified ASE technician inspect the vehicle before you make an offer.
At what point is a flood-damaged car not repairable?
The reality is that if the water has reached the midpoint on your wheel, it should probably be declared a total loss. Many critical systems are located on the bottom of the car. Water has a way of ruining electronic components, especially for vehicles equipped with a computer-controlled engine management system. Once an automobile has been flooded, the entire electrical system becomes questionable. Vehicles that have been completely underwater should be destroyed. If the car has been sitting in saltwater, consider it a total loss.
In a side impact, only a relatively thin door and a few inches of metal and plastic separate the occupant from another vehicle. This means that side airbags must begin deploying in a mere five or six milliseconds! Side impact airbags protect the head and torso from impacting the glass. They don't deploy like front impact airbags. These air curtains or airbags push downward and are the safest way to travel.
ABS, traction control, front-wheel drive, and all-wheel drive
These safety features are worth every penny. Many vehicles offer four-wheel drive (4WD), all-wheel drive (AWD), antilock brakes (ABS), and traction control—or some combination of these features. It is important to remember that these systems don't create traction, they only manage it. This means that while antilock brakes (ABS) and traction control systems help make it easier to reach the tire's full grip potential, neither of these systems can actually provide more traction or create better handling. They are capable only of limiting the acceleration and braking capabilities of the vehicle to the traction that is available from the tires. If you drive too fast into a corner, and try to brake, even ABS won't keep you on the road.
Antilock braking systems help prevent the locking of the tires by releasing pressure and pumping the brakes at specific (and very rapid) intervals, usually ten to twelve times per second. While an antilock braking system helps maintain steering control and directional stability, the stopping distance may be longer.
In other words, ABS gives you the Ability to Brake and Steer, which are important in helping you avoid an accident. Without ABS the tire stops rotating and the vehicle slides. ABS is one of the best safety investments in your vehicle.
Tip
Your vehicle, no matter whether it's a Toyota Yaris or a GM Hummer, has only four tires touching the road at a point called the "contact patch." The contact patch area is about the size of your fist. That small amount of rubber is all that touches the road at all times. Tires and their safety components are all that help you stop, steer, and accelerate. Take care of the tires and don't skimp on quality.
All of these systems depend on tire traction. To get the ultimate performance from ABS and traction assistance, you need tires that have proper tread pressure and sizing and are designed for your car. Only then can you deal with the ever-changing driving conditions you are sure to encounter. The best solution is to consult your owner's manual or door placard to determine the recommended tires. You also can contact your tire dealer for guidance.
Future safety technologies
At this time, there is a constant evolution of new safety technologies that will improve automobile safety in the future. Each year technologies evolve from concept cars to production from many different manufacturers. Here are a few:
Blind spot information system. This device uses an outside camera to detect when a moving vehicle is in your blind spot and activates an amber light on the left front window pillar to let you know. It's a handy innovation that serves as a great backup check if your mirror and over-the-shoulder glimpses don't detect a vehicle.
Lane departure warning. This new system employs a camera that looks at the lines on the road ahead of it, and if the car crosses a line without a turn signal, the system lets you know. The steering wheel rumbles, creating a feeling similar to the rumble strips on the shoulders of highways.
Lane departure prevention. This will include a system that actually takes lane departure warning one better: it physically prevents the vehicle from drifting if the driver doesn't intend it to. If a turn signal isn't engaged and a camera detects the vehicle is passing over a lane line, the car selectively applies the brakes to the opposite side of the vehicle, which gently brings the car back in line.
Distronic Plus system. This collision-prevention system is featured on some vehicles today and uses both short-range and long-range radar systems to distance you from moving vehicles ahead. It chimes if you're closing in too fast and preps the car for a possible collision by tensing the seat belts and cueing up the airbags. Distronic Plus will brake the car up to 40 percent by itself if you don't respond; but once you start braking on your own to avoid a collision, the car will give you all the braking force it has.
Automakers will always develop new safety features. But what actually can be more difficult than coming up with all this warning system technology is figuring out how much people really want to be helped by even the most thorough and intelligent of safety devices.
Tip
The capabilities of four-wheel or all-wheel drive vehicles are not infinite. Many drivers believe that four-wheel drive vehicles have the best traction in winter. Every type of vehicle depends on four small contact patches (about the size of your fist) where the tire meets the road for traction. This small contact area is the limiting factor of any vehicle on a slippery surface. Four-wheel drive does not improve braking or cornering effectiveness. This is why snow tires offer the best traction and control. Four-wheel drive works best with snow tires, because all the wheels are driven.
Four-wheel drive and all-wheel drive
Four-wheel drive vehicles have become extremely popular in areas of the country where snow is the standard part of winter. For a daily driver, on regular roads, the factory all-season tire is acceptable. But the flexibility of this type of tire gives drivers a false impression of the tires' capabilities in winter snow and ice.
Four-wheel drive systems have the ability to divide the engine's power among all four tires. This can provide a real advantage when accelerating under slippery road conditions. For example, a 200-horsepower rear-wheel drive vehicle requires enough traction from each tire to accept 100 horsepower. The best four-wheel drive systems divide the same horsepower among all four tires, and each tire now requires only enough traction to accept 50 horsepower. Double the driving wheels and you virtually double your traction on slippery road surfaces under acceleration. There are many different four-wheel drive systems that function in various ways.
Finally, whether your vehicle has antilock brakes, traction assistance, four-wheel drive, or all-wheel drive, it is the tires that provide the real traction. Winter snow tires will optimize your control on snow and ice better than all-season tires. Safety is the most important issue in these weather conditions. If you don't ever drive in winter conditions, then a performance or all-season tire should meet your needs.
Crash test ratings
How safe is that new or used vehicle you're thinking of purchasing? With the introduction of airbags and crash testing, the number of people killed and injured by motor vehicles has decreased. When you think you've found the right make and model to fit your needs, there is one important aspect you should check out. Crash test ratings are performed by the Insurance Institute for Highway Safety and National Highway Traffic Safety Administration. (See Appendix B for details on the ratings.)
5. Know the lingo
Have you ever felt that car dealers were speaking a language you've never heard before? While they are not trying to trick you (most of the time), it may be helpful to know their lingo. Think of it as communicating with a doctor; ask questions if you don't understand what they are saying to you.
BASE PRICE The cost of a car without options. It is printed on the Monroney (see below).
BLUE BOOK OR BOOK VALUE An industry guide used by dealers to estimate wholesale, trade-in, and retail pricing. You can find Web sites on the Internet that provide such prices and values. See Additional Resources, for Internet sites.
BUMPING Raising the customer's offer for a car.
CLOSER An experienced salesman who is brought in to "close" a deal by convincing a customer to agree to certain dollar amounts and incentives.
DEALER HOLDBACK An allowance manufacturers provide to dealers after the sale. If a buyer purchases a car below invoice price, the dealer can make up the difference with this money. Holdback is the money the dealers use to cover their expenses.
DEALER INCENTIVES Programs offered by manufacturers to increase the sales of slow-selling models or to reduce excess automobiles on their lot. Dealers don't have to pass the savings on to the buyer. You may be able to double dip and get more than one of these incentives. Incentives include those for new drivers, college graduates, return customers (loyalty discounts), and newlyweds. Make sure to ask what's available or check manufacturers' Web sites.
DEALER PREPARATION Dealer prep includes removing all the protective plastic used in transport from the factory, making final adjustments, placing floor mats, and attending to details to ready a vehicle for customer delivery. This is a no-charge service.
DEMO This is a test-drive vehicle that a salesperson or others have been testing. Because it has working mileage on its odometer, you can get a great deal on a demo.
DESTINATION CHARGE The fee charged for transporting the vehicle to the dealer from the manufacturer or port of entry. This charge is to be passed on to the buyer without any markup.
F&I This stands for the Finance and Insurance office where the final sales documents are signed. F&I salespersons usually push extras such as extended warranties, rustproofing, and alarm systems.
FULL POP LEASE Lease agreements that are 110 percent of the sticker price, the highest amount allowed by most banks.
GREEN PEA A new salesperson still learning the brand or the business.
GRINDER A customer who negotiates for hours over a small amount of money.
INVOICE PRICE The manufacturer's base charge to the dealer without any options. Dealer's final costs may change due to manufacturers' incentives.
LAY DOWN A customer who pays sticker price without negotiating.
LIEN If you finance your auto, the title will show a claim to part of the ownership by a financial institution. Once you pay off the loan, you'll receive a lien release.
MINI A small commission deal where the car was sold at close to invoice price or at a company discount.
MONRONEY OR WINDOW STICKER The sticker pasted to a new vehicle's window. It shows base price, options, destination charges, fuel economy, crash test rating, and MSRP. Federal law requires this label to remain in place until a purchaser buys the vehicle. The sticker is named after "Mike" Monroney, a longtime Oklahoma congressman who wrote the Automobile Information Disclosure Act—now commonly known as the Monroney Act.
MSRP Manufacturer's suggested retail price.
REBATE A manufacturer's reduction on the price of the car as an incentive to buyers.
ROACH A customer who has bad credit.
THE POINT The place on the car lot where the "up" man stands looking for customers.
TITLE A legal document specifying ownership information for a vehicle. If you borrow money to get a car, the title will have a lien on it until the vehicle is paid off. In some states, the lending institution will hold the title until the loan is paid off. This document shows the ownership of the vehicle and must be stored in a safe place. If you lose this document it will take a lot of work and effort on your part to get a new one; during that time you will be unable to sell or trade the auto.
TOWER The sales manager sits at a desk that is elevated above the show floor, in an area called the tower. It allows him to see the whole showroom and watch customers and the sales staff.
TRADE-IN VALUE The amount that the dealership will credit you for the vehicle you provide as payment toward another vehicle. Remember, if you want a wholesale price on a car, you won't get a retail price on your trade-in.
TURNOVER A sales consultant's tool to close a deal, by passing a customer to another salesperson. The new salesperson may be more knowledgeable, may like or treat the customer better, or is an experienced closer.
UP Salespeople take turns for customers; this refers to who gets the next customer.
6. Prepare to Negotiate
Know what you deserve and what to expect:
Know what you want and what it's worth. "Build" your vehicle and compare the prices of different brands on manufacturers' and automotive Web sites.
Know what your dealer can do for you: he may have to check with his manager to answer your questions. Before negotiations come to an end, make sure to ask if their price is "the best they can do." Be prepared to walk out if necessary.
If you are trading in a vehicle, know the value of your trade-in: check the Internet for values and check the classified ads to learn what similar vehicles are selling for in your area.
Know what accessories you want and which ones you need (remember, there's a difference). Decide if you want them installed at time of purchase and ask how the installation affects the warranty.
There's no need to become irritated if the salesperson gets up to "check with the manager." Sure, it's a clichéd ploy. But your salesperson may simply be attempting to structure a deal that's a win-win situation. Also, many salespeople can't quote a payment; they are not qualified to quote finance rates based on your credit.
If you decide to lease, remember that it's in your interest to do so based upon the total price of the vehicle, just as if you were buying it. Negotiate a "sales price," then work out your monthly lease payments based upon that total. Do not fixate on the monthly payment. This is the most common mistake made by people not familiar with lease contracts. Never tell the salesperson you are buying or leasing until after you've negotiated a transaction price; then figure your lease payments. Leasing contracts are complex and it's easy to get sidetracked unless you really know the ins and outs. And, it's easy for salespeople to build in extra profit for themselves when you don't agree on a price before figuring out the terms.
If in doubt about any of the numbers, don't be afraid to ask questions. Continue to ask questions until you understand what you are paying for.
To Buy Or To Lease—That Is The Question!
Leasing is like a long-term rental. When you return a lease, the vehicle belongs to the finance company. You never really owned it.
When you buy a vehicle, you own it, or a portion of it, together with the bank, credit union, or other financial institution, until it is paid off.
Each option has its advantage.
Advantages to Leasing
Leasing enables you to drive a new car more often.
Lease terms can be shorter than purchase terms with similar monthly payments.
Lease payments cover the portion of the vehicle you used and not the total value of the vehicle, so payments are lower.
No resale or trade-in headaches, just a straight deal. When your lease ends, you simply return the vehicle and walk away.
Advantages to Buying
Most leases limit the number of miles you drive to 10,000 to 15,000 per year. In your own car, the ownership and use is restricted only by the terms of your warranty (and highway laws).
Overmileage on a lease agreement can get pricey. If you drive 20,000 miles or more per year, leasing may not be the best choice for you.
On lease vehicles, you are obligated to pay for any damages beyond normal wear and tear; if you buy your own car, you're not.
The vehicle you buy outright is titled in your name.
The vehicle you buy outright carries no provisions regarding the vehicle's operating conditions or maintenance. Keep in mind that improper maintenance may affect your warranty coverage and a vehicle's condition can affect resale or trade-in value.
It's your vehicle to sell or trade in at any time.
You can pay off your loan at any time and sell or trade your vehicle for another.
You may have smaller monthly payments with a long-term purchase contract, but watch the finance charges. Another way to lower your monthly payments on a lease or purchase is to make a larger down payment.
Residual value affects leasing payments
Residual value, which applies only to leasing, is the amount you can buy the car for at the end of the lease. This percent or amount directly affects your monthly pay ment. Residual values play a key part in the calculation of your monthly payments. Leasing companies develop residual values based on the estimated value of the leased auto during the time period of your agreement; mileage used during the lease; number of months in the lease; year, make, and model vehicle; resale at the end of the lease; history of that vehicle; and expected demand for that auto down the road.
Lease payments are based on the residual value and negotiated selling price. The higher the residual, the lower the lease cost for a given selling price. Residuals are constant for a particular vehicle make and model, but each leasing company sets its own values.
Sometimes car manufacturers offer their own residual values and promote limited-time lease deals. These deals offer higher-than-normal residuals that equal lower payments.
If your leased vehicle carries a 40 percent residual value over a three-year period, it is worth only 40 percent of its original value at the end of the lease. If another vehicle has a 60 percent residual value, that means it is worth more (to the dealer) at the end of your lease period. The higher the value, the lower your payment because the dealer has less to recoup at the end of your lease. That's how dealers calculate their potential profits; your knowledge of this helps you to negotiate.
7. Make a choice
Are "pre-owned/certified" cars a good choice?
The best answer is a definite maybe. For many people, certified used cars have become affordable alternatives to new cars. Let's first define the two terms:
Pre-owned Any used car is, obviously, pre-owned. Not all cars that are pre-owned are considered certified. A third-party sale usually raises a "Buyer Beware" flag and the vehicle should definitely be checked properly by a certified technician.
Used Any used vehicle that is being resold by an individual or used car lot.
The difference between pre-owned and used vehicles is usually with the warranty. Pre-owned vehicles are usually checked prior to sale and are covered by lemon laws. Private sellers can't offer this coverage unless a car is still covered under a transferable factory warranty.
When buying a used car, it's often hard to find the exact car you want. I suggest you do some looking around and make a list of the potential cars that will work for you, and then test-drive them all. Make sure to use the Internet—not just for finding a car but also to find out about recalls and technical service bulletins. There are also blogs and Web sites that give opinions from drivers of certain makes and models. Research will also arm you with more questions to ask the dealer or individual who is selling the car.
I have a rule for car shopping: "If it's meant to be, you'll find it." So don't settle for an "almost." Don't fall in love with a car that might be the right color but does not meet your needs. Don't catch yourself saying, "If it only had ABS or more trunk space or never had been in a flood." None of those cases was meant to be. The right auto is just around the corner, so keep looking!
Factory certified This type of auto is offered for sale by a dealer with the support of the vehicle's original manufacturer, with warranties that extend beyond the vehicle's initial coverage. The original manufacturer of the vehicle is using their dealership to inspect the vehicle. The dealer uses a checklist to determine if the vehicle is worth certifying. If it passes certain tests, it will earn an extended warranty.
Not all certified used car programs are the same. Review the various manufacturer certification programs to see which one offers the most complete coverage. You should carefully check what the certification means and what the warranty covers.
No matter if you choose pre-owned, used, or factory certified, get the vehicle identification number (VIN) and invest in an independent inspection report to make sure that the vehicle has not been in a major collision or flood damaged. Online reports can't make the same thorough checks as a certified technician. When you sign a purchase contract for your used car, make sure you receive proof that the car is under warranty.
Are you looking to buy a used luxury or high-end auto?
With sales booming and the "certified" market growing just as quickly, buying a used luxury car has never been easier. There are several clear positives to taking on an older high-end vehicle—and some equally clear potential negatives.
Luxury cars can depreciate, and—except for extremely low volume or hand-built exotics such as the Maybach, Ford GT, or Ferrari—sometimes depreciate more quickly than you may expect. Standard high-end cars like Mercedes, Porsche, and Audi depreciate or lose value over time just like a regular sedan or minivan. You can benefit by letting someone else take the hit of full retail and depreciation. As second owner you will enjoy the ride with less cash out of your pocket.
There are, however, higher maintenance costs associated with high-end cars. It may cost over $100 to get your oil changed or there may not be a make-specific dealer in your town. To keep up with required service, to follow the manufacturer's service recommendations, you may have to trailer or drive to a dealer in another city. In addition, the costs to maintain engines, drivetrains, and brakes and to buy tires are pricier than with your average auto.
I recommend hiring a certified technician who knows the high-end vehicle to thoroughly inspect it before you make any offers. You may have to spend $100 to $200 to have this check performed, but it is an investment well worth making. You should be cautious about buying any used luxury or high-end performance car that doesn't have a complete record of all maintenance and service work done over the years. If these details are missing, consider reducing your offer or walking away from the deal.
If you're seeking a really special or collector car, it's best to e-mail or join a car club of that marque. The members offer a wealth of information and may even know of some great vehicles that will make you smile at the end of the deal. They also know the pitfalls (and even disreputable sellers) for that special model. An independent certified appraiser can also help you make sure this is a good deal in light of changing market conditions.
Trade-in Tax Credits
Before you sell your car on your own, remember that when you buy and sell through a registered automobile dealer there is a sales tax benefit coming your way. If you trade a car valued at $10,000 and buy another for $20,000, you pay sales taxes only on the total new deal minus the trade-in. This can be a big tax break.
Rules for Buying A Used Car
Maybe you prefer buying a used car from a car lot or private owner, or online. If you are considering online buying or selling, see Appendix B. There are some fantastic used car deals if you follow the rules-clues for purchasing with Car Smarts. Here are some important rules and clues:
REPUTATION IS EVERYTHING Look for locally well-known used car dealers who back their advertisements with honesty, integrity, and service. Ask the Better Business Bureau, friends, and co-workers for their advice.
TEST-DRIVES ARE A MUST The dealers you choose should let you take a car out for a ride. Drive all of the vehicles that interest you so you can get an up close and personal look at the options. If the dealer won't let you test-drive the cars, then walk away.
RECORDS REQUIRED Even a vehicle bought at a wholesale auction comes with paperwork. This will tell where it came from, its sales history, and all factory repairs. Make sure you see the title before you make an offer. Lien releases must be attached to the title—or else don't buy the auto.
INSPECTION AS REQUIRED A seller should let you take the auto to your certified technician for an inspection. If a seller won't let you have it inspected, it is a sign that you need to walk away.
WRITTEN WARRANTIES FOR SURE There should be a 90-day minimum warranty from a dealer or—at least—lemon law paperwork. There won't be a warranty from private sellers. Be careful, as those vehicles are sold "as is, no warranty expressed or implied."
Think how much sales tax is paid over the life of a single auto. When the car is sold new, its original owner paid sales tax on buying it. If it was resold to another person, that second owner paid tax on it. Whenever it is sold again, each successive person pays taxes, too. This continues until the car is totaled or destroyed. It is possible that more taxes are paid on some cars than the vehicle was worth over its lifetime.
So figure the numbers before you trade in a vehicle. Every case is different and you hold the power of the pencil and judgment. Sometimes you can sell it for more than the trade-in and still beat the tax credit. But often the trading can leave you with more bucks in your hand.
When you trade in your car, take the dollar value offered and subtract it from the price of the purchased vehicle. You only pay tax on the difference.
Lease Trade-in Options
Is your vehicle coming to the end of its lease, or are you ready to step up to a new vehicle? Did you take care of the one you're driving? Many people think they can lease a car and only make payments. No worries. It's under warranty, right? Wrong!
As the end of your vehicle's lease period comes due, think about your options and what you can do to avoid extra charges when the leasing company picks up your vehicle. You have two choices at this point:
1. You can simply walk away and buy something else.
The vehicle becomes the responsibility of the finance company that issued the lease. You'll have to go through a standard checklist, and you'll have to pay for any repairs that need to be made, plus any penalties for going over the mileage you agreed on in the first place. Understand that any cosmetic or mechanical damage beyond normal wear and tear will typically cost you. Taking care of a leased car is more important than taking care of a rental car. This is where that maintenance schedule in your owner's manual is critical.
It's also important to study the checklist that will be sent to you by the lease company—and clean the auto before you turn it in. Clean it inside and out, removing stains, trash, and dust. Then wash and wax it. Make it look as new as possible. The dealer or an independent inspector will inspect the car. If it looks as though it's been treated roughly, the dealer or inspector will be even more careful to look for problems and cosmetic damage. If there is light to moderate damage, you will have to have it repaired. You may be able to have it fixed inexpensively by an independent body shop.
2. At the end of your lease, you might decide to buy your car and keep it. Why?
The buy-out price in your contract makes buying the car a great deal.
You know the car's mechanical history and it's very reliable.
You don't want the hassle of starting a new lease or shopping for a new car.
You've exceeded the number of miles allowed and want to avoid a penalty.
There is excess wear and tear on the car, and you want to avoid extra fees and repair it yourself.
You may also consider re-leasing the vehicle. But before entering another lease, you'll need to do some homework. If you want to negotiate a lower buy-out amount, you need to make sure you are talking to someone with the authority to make a deal. Furthermore, if you are going this route, you should have a figure in mind at which to start negotiations. Use the Internet to get your information.
Buying your car at the end of a lease can be a win-win situation for you and the leasing company. Just make sure you have reached a fair price for the buy-out and know about any other related fees before you agree to the deal.
Final caveat: A car or truck that has depreciated to below the expected residual value can be a terrible deal, since you will, in effect, pay above-market value for it.
Get the most for your old trade-in vehicle
Make sure the car is clean in and out. Clean the windows, mirrors, upholstery, dash, floor mats, and carpet. Remove all trash. Your trade-in should be impeccably clean before you have it appraised.
Depending on your cash situation, you may want to repair or replace damaged or worn items that are highly visible (cracked windshield, worn tires, etc.). Make any minor repairs, clean the engine, change the oil and oil filter, top all fluid levels, and get a front-end alignment.
Choosing The First Car for Your Teen
You know to avoid rust buckets and muscle cars for a new teenage driver, but what are the best types of cars for beginners? Before you give your vehicle to your teen or buy a new or used vehicle, consider the following tips:
AVOID SUVS. For many good reasons, conventional truck-based sport-utility vehicles aren't recommended for first-time drivers. A higher center of gravity in SUVs usually gives them unforgiving handling characteristics compared to passenger cars. Abrupt maneuvers or distractions by passengers can lead to rollover accidents.
SMALL CARS AREN'T THE BEST CHOICE. Small cars should be avoided because they do not always provide the same occupant protection as larger cars. Teens are more at risk for being involved in accidents, so start with a safer car. Inexperienced new drivers should have a moderate-size vehicle with airbags, ABS brakes, and predictable handling characteris tics.
STEER CLEAR OF SPORTS CARS. According to the Insurance Institute for Highway Safety, an insurance-industry affiliate, the statistics show that younger people are more likely to be in a speed-related crash in sporty vehicles. The engine sounds and the handling of these cars are great for experienced drivers. Those fun factors could spell tragedy for someone still building his or her skills.
FORGET CONVERTIBLES. We all love the wind blowing through our hair. But ragtops are a poor choice for a new driver. In regard to safety, there is nothing better than having a roof over your head. A convertible is better once confidence and good driving choices are a part of your teen's skills.
NEWER IS BETTER. Newer models offer more safety features, both passive and active. They have better structural crash protection, crumple zones, and front and side airbags. Worth while extra safety features to look for include stability control and rollover protection.
CHOOSE A MODEL WITH GOOD PERFORMANCE AND GOOD FUEL ECONOMY. You don't want a young driver in an underpowered slug, because some power is necessary for safe passing and merging. On the other hand, it shouldn't have so much power that it encourages speeding. Since gasoline is expensive, look for fuel economy, too.
AUTOMATICS ARE BEST FOR NEW DRIVERS. While many driving schools recommend simultaneously teaching teens on both manual-and automatic-transmission cars, it's a good idea to put your new driver in an automatic car. Real-world driving distractions like eating, talking to passengers, trying to find directions, or tuning the radio station while driving can fluster a new driver who also has to worry in traffic. Not to mention cell phones as the biggest distraction.
SO WHAT'S BEST? Most auto experts, consumer groups, and insurance industry analysts agree that the best cars for new teen drivers are late-model midsize sedans. These vehicles pro vide a good combination of decent handling and performance along with good occupant protection. Look to the National Highway Traffic Safety Administration and to the Insurance Industry for Highway Safety for crash test results before deciding on a vehicle.
GPS YOUR TEEN Recent technology allows us to keep an eye on our kids with a GPS tracking system. This system can text message or e-mail your computer to tell you if your teen or new driver speeds, drives outside a specific area, or has committed a traffic infraction. I also recommend telling your teen driver that the unit is installed so there are no surprises. There are many different systems that can be installed to make you feel a little more comfortable about your teen's driving.
After you have come to a mutually agreed-upon price for your trade-in, get the quote in writing to prevent misunderstandings when negotiating for your new car. You should negotiate the price of your trade-in and the purchase of your new car and financing separately. Mixing these will get confusing and you may pay too much.
The most profitable thing you can do with your used vehicle is to sell it yourself and use the money for a down payment. If you choose to trade it in, establish its value through an independent source such as autotrader.com, Yahooautos.com, or edmunds.com before you walk into a dealership. You should know the book value of your car, including its options, and research what your year, make, and model is selling for in the classifieds online and on the lots. Go to the Internet for the most current information.
Buying Rental Cars
At first glance buying a rental car sounds like a great idea—a nice used car with detailed maintenance records from a reputable rental car company. If you look a little deeper, think of the last time you rented a car or truck. Did you drive it harder than you'd drive your own car? Did you really care about that rental?
If you are still considering buying a rental car, make sure to review the vehicle history, maintenance records, and damage history. All this will help you make your initial decisions on that auto. Then, the most important part is to have a certified ASE (Automotive Service Excellence) technician check out the vehicle from stem to stern. The reason I'm so adamant about this is that I can't tell you how many cars I've rented with check engine, change oil, and ABS lights on. This tells me that most rental car companies wait until maintenance is long overdue before they incur the expense of repairs. If you decide on a used rental car, do yourself a favor. Look only at the used car lots of reputable rental car companies that are at all the airports.
Used Car Service Contracts
If you are considering buying a service contract, know the background of the company insuring and administering the contract. These contracts apply to used cars—new car purchases already include some protection and some roadside assistance plans.
When it comes to warranties, factory warranties are your best bet. But what if you drive more than the average person, or you choose to purchase a car that is out of warranty? What options do you have?
An extended warranty is a vehicle service contract between the car warranty company and you. (For more on extended warranties.) When you buy your Ford warranty, for example, the company pays for repairs to your Ford covered by the contract. Extended auto warranties are not insurance policies. Your service contract money is deposited in a "claims reserve account," insured in case the administrator goes belly up. An extended warranty is the most confusing, profitable product car dealers sell—in fact, in California, extended warranties cannot be offered. The language is tricky, and if you don't understand contracts you're in trouble. Many people erroneously think they will get double warranty coverage by waiting to buy their extended warranty until the manufacturer warranty expires. This is wrong. Extended warranties simply extend the original manufacturer's car warranty beyond the standard warranty period; they do not give you double coverage. The sooner you buy after the factory warranty expires, the cheaper it is. Should you buy a warranty for your new vehicle? Here are some points to consider.
Find out what the factory warranty covers. Don't purchase additional coverage unless no factory warranty remains.
You do not have to have the vehicle serviced at the dealership where you made your purchase. You can choose another dealer or an independent service location of your choice.
Read and make sure you understand all service terms and conditions, including whether you are required to have any maintenance performed or to pay a deductible each time the vehicle is repaired.
Who is the company doing the maintenance in the contract? It may not be the dealer. Read the small print.
Certified pre-owned vehicles may have warranties that are transferable for a small fee.
Even if you lease a vehicle, it is still your responsibility to "Be Car Care Aware" and maintain that vehicle. If you don't, you could receive an expensive bill for neglected maintenance when you trade in the lease. Follow the service schedule and keep receipts.
You may be offered a maintenance program that includes oil changes, Tires for Life, or partial service deals for some period of time. The secret is to read the small print and figure out what it would really cost to maintain the vehicle over that time period. If you're not sure, use the Internet to get average maintenance costs for a specific vehicle. Believe it or not, these costs are online.
Paying for the Car You Buy
One choice is to pay by cash, check, or wire transfer. This is not my favorite choice, as it's hard to return a car if there is a serious issue and get cash back. However, there are no payments or interest or financial institutions involved.
When you purchase or finance a vehicle, look to your current bank, credit union, or financial institution. If you have a relationship with them already, they can offer you a better deal on interest rates. Also ask your sales consultant to get the best available current rate. Remember, dealers make money on financing as well, so get at least two quotes before you decide which financial institutions to borrow the money from. Discuss the terms, finance rates, and first payment date before you sign on the bottom line.
You will most likely want to put down some money to lower your monthly payments.
Paying for the Car You Lease
If you've decided a lease is right for you, make sure you know the answers to these questions.
How much will I owe at signing of the lease? The amount could include the first payment, security deposit, title fees, and registration fees.
How long is the lease? A normal lease runs 24, 36, or 48 months. Be careful of leases longer than 36 months, as the factory warranty may run out and leave you responsible for the costs of repairs.
What is the overage charge per mile? Leases usually allow 10,000, 12,000, or 15,000 miles before you incur additional charges. The miles allowance is not negotiable and can range from 10 to 40 cents per mile.
What is gap insurance? This insurance pays the difference between what you owe on your leased vehicle and what it is worth if the auto is wrecked or stolen.
Selecting Auto Insurance
Take as much time to choose your insurer as you did to pick the right car. There are good and bad deals and it's not all about price. Make sure you have proper protection for your state requirements and your lifestyle. You wouldn't want to lose your home if you're involved in an accident that's your fault when you don't have proper coverage.
Your dealer may offer an insurance program. Include it in your price comparisons but don't be pressured into buying it.
Try to select a company that insists on original equipment replacement parts to repair your car. Some policies allow low-quality aftermarket "knockoff" components. The right decision from the start can affect later value as well as lease agreements.
Ensure convenient service. You are buying more than a policy. Many of the best insurance companies are easy to contact through 24-hour claims service. Some offer the ability to manage your policy and make payments online and to pay out for accidents on the spot by handing you a check. Or concierge centers may handle claims for you.
Look for companies that enable you to cancel your current policy at any time and get a prorated refund.
Check with the company that handles your homeowner's insurance. They might offer a discount for adding your auto policy. (See Chapter 2 for more information on insurance.)
Delivery Day
This is the day you get your car. It's an exciting day, but keep focused. You will save time in the long run if you plan a minimum of one hour for the delivery process.
If you finance through a dealer, do not take delivery until the loan has been approved in writing. That's when you know the lender has accepted your loan, and the deal's done. A dealer can call you back a week after you've made your deal to tell you that the financing fell through. I've heard of this before and it happens with the less honest dealers. (Another reason to check out all dealers with the Better Business Bureau.)
You Should Be Shown How to Operate Such Equipment As:
The heater, heated seats, air conditioning, and other accessories
The sound system
The clock, which should be set (you should be shown how to change it)
Antilock brakes, traction control, and new technologies
Navigational system, tire pressure sensors, and other safety features
The hood and trunk release and the tire jack and how to properly use it
Where to find things in the owner's manual
You Should Receive The Following:
Two sets of keys
Copy of the title (lien release if preowned)
Vehicle registration (may be temporary)
State safety inspections, if required (may be attached to the car already)
Copy of the purchase or lease agreement with mile overage fees
Vehicle warranty
Tire warranty
Service contract, if applicable
The owner's manual and glove box information
Any manufacturer's paperwork regarding your vehicle
Tip
Don't forget to purchase insurance prior to getting your auto. It's illegal and not smart to drive your vehicle home without insurance or correct plates. Do it right and you won't be explaining yourself to a police officer.
Before You Leave The Dealership, Meet The Service Manager Or The Representative, And Request A Tour of The Service Department:
Is it clean and organized?
Are they courteous to you and your family?
Inquire about procedures for bringing in your vehicle if there is a problem.
Is the diagnostic equipment state-of-the-art? (Ask them if you don't know.)
Be sure to ask for a review of your vehicle's scheduled maintenance requirements—when to change oil and filters, spark plugs, transmission fluid, etc., as described in your owner's manual.
This is a good time to schedule your first maintenance appointment unless you are doing the maintenance yourself or taking the car elsewhere. Remember that basic maintenance is your responsibility, even if you lease a vehicle. Be sure to review the maintenance schedule and remind yourself on a calendar or in your scheduler or PDA. After a house, your auto is your second most expensive purchase, so stay on top of the maintenance schedule.
Inquire about the availability of loaners, rental vehicles, and shuttle service for those times when you may be without a vehicle due to maintenance, repairs, or warranty problems.
Online Car Auctions—Buying and Selling
With the popularity of eBay, you would think that everyone has learned how to buy and sell on that site. Beware: any online deal can be intimidating and risky if you don't know what you are doing. It's all in the details. To learn more about online auctions, refer to Appendix B.
The Car of Your Dreams or a Lemon?
Sometimes even experts buy cars that seem to be possessed. The mechanics drive it more than the owner. After talks with the service manager and the lead technician, no one can sort out the problem.
Is this happening to you? You may have a lemon. If that's the case, lemon laws offer you some legal leverage to get your vehicle replaced. Each state has its own specifics, so make sure to contact the manufacturer and then check the law to see how it applies to you and your situation. Only then can you take legal action.
Three Secrets to Successful Negotiation
It can take a few weeks to decide what you want and need and to arrange a purchase. So choose a car, check your credit score, set up financing, and haggle and finalize a deal. Don't set yourself up to be forced into a hasty decision.
1. Do your homework
Know your credit score. Credit agencies can provide your credit history from all three major credit-reporting agencies—some at no charge. A credit score is a numerical expression based on a statistical analysis of a person's credit files. It represents the creditworthiness of that person, which is the likelihood that the person will pay his or her debts. A credit score is primarily based on credit report information, typically sourced from credit bureaus and credit reference agencies. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and with what credit limits. This vital information will help when financing, because your interest rate may be higher than advertised because of your credit rating.
Put together a folder of information on the cars you like and their prices. Take it with you to the dealer and make sure they see you are prepared. If your spouse or partner is with you, agree beforehand: no impulse buys and no discussion of exactly what you are prepared to pay, even if you're alone in a sales office. When you tell the salesman what you're looking for, inform him that you have done your homework and are aware of the costs, and that you understand that this is a business deal.
2. Don't be a hostage—take control of the sales interaction
Salespeople will go to great lengths to spend time with you and answer your questions. They don't want you to go to another dealer. Don't hand over your car keys or driver's license.
Always take a test-drive—and make the most of it. Don't just cruise around a few blocks and play the radio. Are the seats comfortable? How easy is it to reach the controls? Is there good visibility? Test the acceleration on highways and see if you feel comfortable behind the wheel.
When you are ready for the test-drive, if the salesman asks for your driver's license, instead offer a photocopy or have him ride with you. If you leave your driver's license with a dealer they may use it to check your financial standing to find out how much you can afford to pay. The salesperson just by making the query can lower your credit score about five points. This is illegal and the Federal Trade Commission levies a $2,500 fine for an unauthorized credit check. So bring a copy of your license and get the copy back.
Ask what incentives, extra discounts, college student rebates, or first-time buyer incentives a manufacturer offers.
Never roll your previous car payments into a new lease or purchase. If you do this you will become "upside-down," which means you owe more on the vehicle than it's worth. If you already owe more than the car is worth, sell your old car privately or stay with your old auto until it's paid off. Sometimes you simply should not be buying a new car, especially if you are already deep in debt.
When negotiations begin over the price of the car, you'll probably hear a standard phrase, "What will it take to put you into this car today?" Offer your lowest possible price, based on your homework and knowledge of what the dealership paid. The consultant will have to take it to his or her sales manager to discuss it. Remind him before he leaves that you are willing to wait only ten minutes. This will let you take charge of the negotiations. They can't chain you to the showroom, and you refuse to be a hostage. This is a business deal, so don't be foolish.
3. Be prepared to walk away
If you feel the numbers are wrong, or you've been treated unfairly or spoken to rudely—walk away! There are many dealers and thousands of cars out there. If the deal doesn't feel right to you or you feel pressured to close a deal, don't. Make the deal on your terms and your own deadlines.
Before you go to the dealer, you should know within a few hundred dollars what you should be paying. If you don't get that price, don't be afraid to leave. Don't feel you have to wait around to say good-bye. Good salespeople will get your phone number in the first few minutes after you arrive. If they want to make a deal, they will find you. The more time you spend hanging around one showroom, the less time you can spend at another dealer.
Now it's time to pat yourself on the back. You have the power to purchase a car that will make you smile and be proud of your choices and decisions.
LAUREN FIXS GUIDE TO LOVING YOUR CAR Copyright © 2008 by Lauren Fix.
