Buying a Car


Decided it is time to buy a car and not sure of what to do? Whether you are buying for the first time or have gone through the process a few times before, there are a few things that you should be aware of from beginning to end to make sure that you end up with what you want (or at least what you can afford and happen to like) and have it be a successful purchase.


What Should I Know to Begin the Process?

The first thing that you need to know to begin the process is whether you want a new or used car. There are pros and cons to each, and they aren't just financially related. Let's look at some facts that will help you decide on that answer.


There are more than 2 million car accidents annually. Most of those accidents include more than one automobile. When you study out those numbers and consider that many owners replace their wrecked car with a new (or newer but used) car, it is very possible that you could end up with a used car that has already been dinged or smashed. Because of this, you need to be ready to find out the history of any car you consider for purchase. Information that you should find out about any used car you are considering should include (but not be limited to) the following: the number of previous owners, if the car was involved in any previous accidents, any previous mechanical problems, and the maintenance history of the car. Fortunately, much of this information is available by running a Carfax report.


One of the biggest benefits of buying a used car is that you can often get a great deal and in many cases, the car may even be relatively new. This is because of the increased number of people that choose to lease a new car rather than purchase it. Unfortunately for every good deal, there is a bad one. The most common car-buying horror stories involve the purchase of a used car. What does all this mean to you? It means that before you can decide whether you want new or used, you need to decide what you need and what you can afford. Guaranteed, those two decisions will narrow down your search before the search has even started.


Buying a Used Car

So you have decided or are seriously considering a used car. Here are some tasks that you should complete to increase the odds of a good purchase:


Have a mechanic check the car. Not just the engine and inside. Have them put it on a lift and check underneath. He will be able to notice what is original and what has been replaced, what damage has occurred to the undercarriage, and anything else that may be of concern.

Run a Vehicle History Report so that you can get a full history on the car. Many times the dealership that is selling the car will do this for you. Make sure to see a copy if they have already done it so that you can see for yourself. The report will be able to tell you if it was ever salvaged, stolen or recalled, failed inspection, had more than one owner, and whether or not the odometer has a fraudulent reading.

Never sign an "As Is" statement. Dealers try to mix these in with all of the other paperwork you have to sign. What this does is make the car yours when you drive off the lot, even if you discover a problem one block down the road. Make sure that you have the option of returning the car within 30 days.

Have your financing and loan approvals ready before you go to buy the car. You will already know what your limits are. You can also use this in your favor if it comes down to negotiating a price.

If you follow these instructions, your used car buying experience should go well and you will be satisfied with your purchase.


What to Know About You, Before Shopping for a Car

Before you start thinking about what fun features you want (convertible, four-wheel drive, etc.) you need to do some self-examination to be prepared. First (and most importantly) look at your budget. It won't be much fun driving a powerful sports car or sport utility vehicle (SUV) if you can't afford the gas to drive it. Set a reasonable price range. This will help you to narrow the search. If you get your financing and loan approvals ready prior to shopping, you won't have a hard time setting the price range: the loan approval amount will set the limit for you.


You should also know about your credit history. Any good dealer will ask because he may be able to offer you some promotions it your credit score is above a particular number. You can receive your credit report from the three national credit bureaus - Equifax, Experian, and Transunion by going to their websites. It's not a bad idea to take that credit report with you when you're shopping.


Finally, what are your real needs? Do you haul equipment? If so you should consider trucks. Do you have a family with more than two kids? If so, you may need to consider a minivan or large SUV. Do you commute long distances? You will want to look at something that gets good gas mileage. Do you have a towing requirement? Consider something with a tow hitch so that you can get that boat to the lake or the camper up in the mountains. And make sure the vehicle has the power to make the hitch worth it.


By knowing what you really need and what you can actually afford will simplify the car shopping experience you are about to have. Your options will be narrowed down and the search will become a lot easier.


After Choosing the Car, What Should You Know

Once you have decided on a car, there is still more information that you will want to know before you finalize a purchase. First of all, how does it drive? You should learn about this by doing a test drive. And make sure that you are the one doing the driving. If you have a spouse or friend with you, let them drive as well. They may notice something that you didn't and you get the perspective of how comfortable your passengers will be.


Next, how much would the car cost if you were to buy it from another dealership. Shop around and compare what the same car would cost you at another dealership. Keep in mind that accessories, mileage, and wear will most likely factor into the differences you find. If you find two cars that are identical in every way except the color, but one is $5,000 less than the other, it shouldn't be a hard decision...unless you really like that metallic pea green paint job with wood panel accents (is your name Clark Griswold?).


Purchasing the Car

One thing that you need to remember is that car dealerships are a business and need to make money like any other business. Also, the salesperson is most likely working on commissions and will constantly be thinking of how much he will get paid from the sale of the car. There is only so much leeway that they will be willing to give when it comes to the price. This is where you need to show what you have learned and avoid pitfalls that come with buying a car.

Car Buying Tips:

  • There are two times during the year in which you will get better pricing: the last two weeks of December and July to October
  • Know the competition. If you shopped around like mentioned earlier, you will be able to negotiate.
  • Don't be afraid to negotiate. In fact, don't be afraid to walk away from the dealership. The salesperson doesn't want to lose out on a sale. On the same line, realize that they can negotiate to a certain point.
  • Don't let a dealer run a credit report on you without your permission. Many do and are able to use the report against the buyer if the score is not outstanding or the report shows delinquency. This is another reason why it is important to get your report before shopping.
  • Don't give your license or social security number to the dealer. They may ask for it as collateral while you test drive the car. This is one way they can run your credit report (conveniently while you are on the test drive).
  • If you are buying new and the car needs to be ordered from the factory, it should NOT cost any more than the ones on the lot. The only reason for a price change should be because of options and features, not color and trim.
  • If the dealership doesn't have the car you want, they may call around to other dealerships. If they are getting the car from someone else, maybe you should to go so that you don't get additional fees.
  • It is illegal for a car to have a missing MSRP or price invoice sticker. Don't let decals advertising the price be the only thing in the window when buying from a licensed dealership.
  • Don't let the dealer start charging you for extra charges that weren't disclosed in the negotiating. You should have agreed to a price before starting the paperwork and you shouldn't have to pay more than that. This is the area that dealers work on you the most. Undercoating in Phoenix, AZ is not a necessity like it might be in Buffalo, NY.
  • If you feel that the dealer is being unfair with you or trying to charge you for things that you did not agree on, don't hesitate to walk out of the dealership without the new car. They will miss out on making some money and you will benefit by not spending more than you bargained for. The bottom line is that you are the one that will be spending money and driving the car. You need to be happy with what you purchase.

Disclaimer: Information found within this page are for informational purpose and does not represent bank practice or services offered at its entirety.