Tag Archives: used car

Your First Car – What’s Important?

buy first carBuying a car for the first time can be an overwhelming experience.

There’s so much to know and how to know what’s important.

With this article, we’ll take some of the mystery away from the car buying process.

We’ll focus on the car itself in this article because we’ve already covered topics such as new versus used, financing, loans, best first cars, and more. Many new car buyers don’t completely understand how things like engine power, miles per gallon, safety equipment, and reliability factor into making decisions about what to buy. Incredibly, some novice buyers put more importance on color as a decision factor than almost everything else.

When buying a car, the old adage that “you get what you pay for” usually applies. A less expensive car will more than likely have lower engine power, fewer safety features, and lower reliability than cars that cost more. But how important are those things?

Continue reading Your First Car – What’s Important?

Check Your Used Car Before You Buy

buy used carThere’s nothing worse than spending your hard-earned money for the perfect used car and finding out after the sale that it has serious problems that are going to cost a fortune to repair.

It’s even more disappointing when you discover that used cars are sold “as-is”, which means that you have no legal grounds to return the car to the seller and get your money back, even if the seller lied to you about the car’s condition. Even if you suspect the seller of outright fraud, you have to prove it in court, which is often impossible to do. Sellers can easily claim they knew nothing about the problems, which in many cases might be true.

Used car dealers rarely inspect the cars they sell. Even though the salesman might tell you a car “has no problems”, he may have no idea. The only exception is in the case of “certified” used cars that have been inspected and come with a short warranty.

The lesson to be learned here is that when buying any used car, especially those with high mileage, you should always have the vehicle inspected by a professional mechanic before you buy. An inspection might cost you $75-$125 but if it detects serious problems, it could easily save you from suffering a multi-thousand dollar mistake. It’s a good and wise investment.

Continue reading Check Your Used Car Before You Buy

Craigslist Car Scam

Car buyers are being cheated every day by a common scam that is usually associated with Craigslist, as well as other online car-for-sale web sites.

Craigslist even posts warnings on their site about it but many buyers are so focused on the “deal of a lifetime” they’ve found that they don’t read the warnings.

It all starts with a car-for-sale ad that seems almost too good to be true (you know what they say about these kinds of deals). There is a beautiful picture and an alluring description of the car, even a VIN number, and a price is that seems unusually low. Except for maybe the low price, there is nothing about the ad that suggests a scam. The ad looks like any other ad, even the legitimate ones.

You won’t find anything to indicate a scam until you contact the “seller” via email. That’s when suspicious details come out.

Continue reading Craigslist Car Scam

How Does a Car Trade-In Work?

What is the car trade-in process? Do I lose money by trading?

Here is how a car trade works.

Car dealers buy your old car from you and give you credit toward the price of a new car. The trade-in credit is like a down payment and reduces the price of your new car, making your monthly payments smaller.

The dealer then puts your old car on his used-car lot to sell, or he sends it to a dealer car auction where another dealer will buy it to put on his own used-car lot.

Contrary to some belief, dealers don’t simply “trade” or swap one car for another. It’s two separate transactions rolled into one contract.

Dealers make a lot of profit on selling used cars they’ve taken as trade-in. They pay the trading customer a low wholesale price, and sell the car for a higher retail price. That’s how they make their money and stay in business. Continue reading How Does a Car Trade-In Work?

Do I Need a Down Payment on a Car?

How much down payment do I need for my car loan?

how much down payment on car loanUntil recent times, it was standard for car dealers and finance companies to require at least 20% down payment on the purchase of a car. It was for a good reason.

Because cars depreciate in value from the moment they are driven off a dealer’s lot, a down payment helps offset that rapid decrease in value, which may keep the loan from becoming “upside down.”  It also protects the loan company or bank because, if they have to repossess the vehicle, they have a smaller risk of losing money. It also protects the car buyer from financial loss if the car is stolen or totaled and the insurance money isn’t sufficient to cover the loan.

Things are different now
Auto manufacturers and dealers are now very competitive and business must be fought for. They are willing to take risks that were unheard of just a few years ago. In many cases, down payment requirements have been reduced or eliminated altogether, primarily for customers with good credit. Continue reading Do I Need a Down Payment on a Car?

How Much Should I Pay for a Car?

What to Pay for a Car — What’s a Good Price?

what should I pay for my new carHere’s how to determine a fair price for brand new cars (see below for used-car pricing).

What to Pay For a New Car

All new cars have a window sticker that displays the manufacturer’s suggested retail price (MSRP). It may also include destination charges, dealer-installed option prices, and other miscellaneous charges. The total of these charges is the price you would pay for that vehicle, less sales tax, without any discounts or rebates.

All these charges but destination charge can be negotiated. Manaufacturers charge dealers this fee for vehicle delivery, and dealers simply pass it along to customers without markup. It cannot be eliminated from the cost of a car.

Price can be negotiated for most vehicles. Unless the vehicle is a hot seller and in short demand, it’s usually possible to get dealers to discount the MSRP. But, how much? What’s the best price I can expect?

Here’s your strategy for negotiating price. Continue reading How Much Should I Pay for a Car?

Cheap Cars – Where to Find Cheap Cars

Cheap cars can be found in many places — if you know where to look. Following are just some of the places you might find cheap cars:

Independent Used-Car Dealers – Independent used-car lots are a potential source of affordable cheap second hand cars. Many lots have older vehicles that can be real bargains, but might require a little work. You should take care to determine if the price is fair and that the vehicle has no hidden problems. Most used cars are sold “as-is” and come without any kind of warranty or return policy. Check out local used-car lots in your area but also consider large national or regional used-car dealers such as CarMax.

New-Car Dealer Used Car Lots – Many new-car dealers also sell pre-owned cars. Most new-car dealers only offer relatively late model used vehicles that have been taken in trade or are off-lease, and are in good condition — and are relatively expensive. But bargains can be found. Therefore, it doesn’t hurt to check out local new-car dealers but also look at other sources listed below. Some new-car dealers sell “certified” used cars — at a higher price. These cars have been inspected thoroughly and come with a short guarantee.

Buy-Here-Pay-Here (BHPH) Dealers – BHPH dealers are a different kind of used-car dealer that provides in-house financing, usually with no credit check, to people who are unable to get a conventional car loan. Most BHPH dealers are local and can be recognized by their “we finance anyone” or “no credit check” banners. Be aware that interest rates are usually very high and payment terms are strict. See “Should I Buy From a Buy-Here-Pay-Dealer Car Dealer” for more details.

Continue reading Cheap Cars – Where to Find Cheap Cars

Deciding on Your First Car

Your First Car – Making Your Decision

first carMost of us get our first car as teenagers. It’s the car we’ll always remember.

Let’s take a look at some of the important questions you’ll want to consider when deciding about what you’ll buy as your first car, how you’ll pay for it, and how to go about the purchase.

How much can you spend?

If cost is not important and you can choose practically any car you want, we’ll get to you later. However, most teens have restrictions on how much they can spend. It might be that your parents are buying and have set a price limit, or that you have your own budget and a limited income.

Since most teens start driving before they become of legal age to sign a car loan contract, it’s typical to pay cash for their first car. The cash can come from savings, gifts from relatives, or a loan from parents — or a combination. Usually, it’s not enough money for a brand new car, but possibly sufficient for a good used car.

The amount of money you have to spend on your first car will directly affect your choices. Lots of money, lots of choices. Little money, fewer choices. In general, the more money you spend, the better the car — better condition, better mileage, better performance, better safety, and better reliability.

Continue reading Deciding on Your First Car

I Only Have $3000. What Car Should I Buy?

This is the kind of question we see posted on question-and-answer web sites every day. The details might vary but the basic question is always the same.

The askers of the question seem to understand that $3000 (or $1000, or $2500) is not a lot of money for a car and they are asking how to best spend it.

For a car to be priced in the $3000 range, there are a number of potential issues that buyers should be aware of:

1) The car would ordinarily be a $5000 car, but it has problems that will require at least $2000 to fix.

2) The car is fairly priced at $3000 because it is old and has high mileage, which doesn’t mean it’s a bad car, but it has a high potential for having problems.

3) The car is only worth $2000 because it definitely has problems, but the seller is hoping potential buyers won’t notice until after the sale when it’s too late.

Continue reading I Only Have $3000. What Car Should I Buy?

Fix My Old Car or Buy A New Car?

fix old car or buy newShould I keep my old car and fix it up, or buy a new car?

Expressed another way, the question is this: Is it smarter, more practical, and more economical for me to keep and fix my old car than to buy another car, new or used?

This is always a tough one to answer. Generally, it’s going to be better to fix up an old car than buy a new car every five years or so.

However, the real answer depends on your particular circumstances. Here are some tips that will help you make a decision

How old is your vehicle?

Older, high-mileage vehicles are more likely than newer vehicles to have problems. There are exceptions, of course. Older vehicles also tend to have more serious problems, such as engine and transmission failures, that are expensive to repair.

Continue reading Fix My Old Car or Buy A New Car?

Cars for Teens – Top 10 Questions

We have been an expert participant on the Yahoo! Answers web site for many years, particularly in the Cars and Transportation section, Buying & Selling sub-section. We answer questions and provide advice about a wide variety of topics related to automobile buying, selling, insurance, maintenance, and car brands.

Although the Answers site is open to anyone, we have found that most visitors and questioners are teenagers and young adults who have had little or no experience in buying, selling, or owning cars. Their questions are natural and appropriate for someone who is doing some of these things for the first time.

The web site is quite popular and is very active. Thousands of questions are asked — and answered — each day. However, in our years of participation we have seen many of the same questions being asked over and over — and over — and over again.

We have compiled what we think are the top 10 questions that teens and young adults want to know about cars. Here they are.

Continue reading Cars for Teens – Top 10 Questions

Your First Car – New or Used?

Better to Buy Pre-Owned Car, or New Car?

First time car buyers have a choice of buying a brand new car, or buying a used car. Which is better?

There are advantages and disadvantages to either choice. Most people would rather have a brand new car with its new-car smell and latest style, but there are reasons that a new car might not be the best choice. Let’s take a look at the pros and cons of buying new and buying used.

Advantages of Buying New Car

  • You get a brand new car with new-car feel and smell
  • You get the latest style and technology
  • You get the latest safety equipment
  • You get a full manufacturer’s warranty
  • You get Lemon Law protection
  • You get lowest loan interest rates, if you qualify
  • You get the option to lease
  • You may get special manufacturer-sponsored pricing and financing Continue reading Your First Car – New or Used?

Quick Guide to Buying a Car

guide for first car buyersFirst-time car buyers are often unaware of everything that’s involved in the process. It’s not surprising because it’s not simple and not like buying anything else that we normally buy, even a house.

We’ll explain it all in this quick guide to buying a car. Further details can be found in the various articles posted on this web site.

1. Decide on a Car

Choosing a car for the first time can be a bewildering experience because there so many choices — old cars with lots of miles on them, newer cars with better safety and tech equipment, small cars, compact cars, sedans, coupes, large cars and SUVs, sports cars , fast cars, fuel-efficient cars — not to mention all the different makes, models, and styles that are available.

Decide what kind of car you want or need and what’s important to you. Do you want good looks, safety, good gas mileage or high performance, automatic or manual transmission, 2-wheel drive or 4-wheel (for winter weather), sporty 2-door coupe or 4-door sedan or convertible, passenger car or roomy SUV or minivan? Do you want good reliability and dependability, and low insurance cost? What is is your budget and how much can you afford, either as a cash purchase or as monthly loan payments?

Continue reading Quick Guide to Buying a Car

Car Buying Checklist – 50-Point Self-Inspection Guide

checkmarkUsed Car Inspection Checklist

Use this handy 50-point checklist when buying and inspecting a used car. Print it and take it with you.

 

Wheels and Tires

chkboxAre tires worn to unsafe level (less than 2/32″ tread depth at lowest point)?

Tires with less than 2/32″ tread depth at lowest point are unsafe and should be replaced immediately. Less than 4/32″ is unsafe in rain. Less than 6/32″ is unsafe in snow. Hint: Buy a cheap ($5) tire tread-depth gauge at any auto parts store, Wal-Mart, or Sears

chkboxAre left/right tires worn unevenly on front? On rear?

Unevenly worn left and right tires are unsafe and cause handling and steering problems. It might indicate a bent or twisted frame as a result of an accident. Always replace tires in pairs

Continue reading Car Buying Checklist – 50-Point Self-Inspection Guide

How to Buy a Car from an Individual Seller

How do I buy a car from an individual private seller — not a dealer?

When you buy a car from an individual, you pay with cash, a money order, or a bank cashiers check. The money can come from savings, a checking account, a family loan, or a loan from a bank or financial company. Most sellers do not like personal checks.

Buyers sometimes expect a private seller to “take payments” but any smart seller will not agree to such a plan. It is too risky. As a buyer, it’s better to get your own loan.

Requirements for a car loan

Loans from banks or finance companies require that you have a not-so-bad credit score, have an income sufficient to repay the loan, and have no excessive debts that might interfer with your ability to repay the loan. Loan companies do not want to give money to people who are unable to repay a loan.

Buying a car with bad credit – or no credit

People who have a bad credit history — a history of not making payments on time or of missing payments on other loans – will have problems getting a car loan. The lender will assume that if you have had problems in the past, there is a good chance that you’ll have problems again.

Continue reading How to Buy a Car from an Individual Seller

Negotiating Used Car Prices

How do I know what price to pay for a car?

Let’s say you see a nice used car that you like on a dealer’s lot that is priced at $14,000. Is it a good price? Can I talk the dealer down to, say, $12,000? How much discount can I expect to get?

These are all common questions when shopping for used cars, especially if it’s your first car.

Let’s look at the answers.

Used car prices can vary greatly – even for the same make, model, year, and condition. Prices tend to follow the laws of supply and demand. Large gas-guzzling SUVs are cheaper in times of high gas prices. Convertibles are more expensive in sunny Florida than in cold North Dakota. Used car prices are cheaper when dealers have too many on their lots.

Dealers are experts at knowing local car-buying customers, what they want, and what they are willing to pay. They set their used car prices accordingly. However, dealers make more profit on used cars than on brand new cars. This means there is a lot of “wiggle room” in used car prices – a relatively large difference between what the dealer has invested in his cars and the prices he sets for those cars. Unfortunately, there is no way for us as consumers to know what a dealer has paid for his used cars.

Check prices to know what is fair

The first step to getting a fair price on a used car is to find out how much the car is worth. Is the dealer’s asking price fair or not? If not, then it is time for some negotiation.

Some newcomers to car buying assume that there is some kind of “standard” price for used cars. It is not true. However, there are used-car pricing guides, such as Kelley Blue Book and NADA Guides, that compile data from a variety of sources to publish their version of suggested prices, based on make, model, year, equipment, mileage, condition, and region of the country.

These guides often differ significantly in prices for the same vehicle, same mileage, same everything. Confused car buyers often ask, “Which is right?” or “Which is more accurate?”  Neither is more right or more accurate. However, the guides serve as a good benchmark for determining a fair price for a car you may be considering to buy. For example, if a dealer is asking $14,000 for a car that the guides show as only being worth $10,000, he’s asking too much and it’s time to negotiate a fairer price.

If you don’t check prices

We’ve seen questions from car buyers who ask something like, “How much can I talk a dealer down on this $14,000 car?”  The answer to the question is really another question. It is not so much how much you can talk him down, as it is how much is the car worth?

For example, a dealer may put a $14,000 price on a car that is worth only $10,000. He hopes that he’ll get a customer who hasn’t done her price research and who will “talk him down” to $12,000. The customer is happy because she thinks she got a $2000 price discount, and the dealer is happy because he sold the car for $2000 more than it was worth.

Asking prices are not selling prices

Nearly all used cars are sold for a price that is less than the original “asking” price. Dealers post asking prices on used car window stickers. Individuals selling used cars advertise them with asking prices. Dealer asking prices may be 20% or more higher than selling prices. Individuals usually price their cars about 10% higher than the price they are willing to accept.

Negotiate based on car’s condition

If you find a car you like and the price seems fair for a car in good to excellent condition, make sure you get a mechanic’s inspection and have the mechanic document any problems he finds. Assuming the problems are not serious enough to stop you from buying the car, use the mechanic’s report to negotiate for a lower price.

Also get a Carfax vehicle history report and do the same thing. If the car has been in an accident, even if the repairs have been done expertly, use the information to try to get a better price.

Where to buy

Used-car dealers are an obvious source of  used cars but it takes time to visit and find out which ones have cars you might be interested in. One way to save time is use an online site such as UsedCars.com that lets you search for discounted cars from dealers in your area.

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How to Find a Good Cheap Reliable Car

We hear the question all the time, “Where can I find a good cheap reliable car?”

The people who ask this question obviously have limited funds but are looking for the best car that can be purchased with the least amount of money. Unfortunately, finding a car that’s inexpensive AND good AND reliable can be very difficult. Although not impossible, it’ll take a lot of looking, test driving, and inspecting before the right car is found, at the right price.

Cars with prices in the $1000-$3000 price range (cheap) will nearly always be cars that are at least 10-15 years old, with lots of miles, considerable wear-and-tear, and may have been damaged at some time in its life. Again, this doesn’t necessarily make them bad cars, but it’ll take some effort to prove otherwise.

We also often see questions about which vehicles are the most reliable. Although some vehicle brands such as Honda and Toyota have exhibited outstanding reliability over many years, it doesn’t mean that every Honda and Toyota is reliable, especially those with lots of miles, accident damage, and those that have been driven hard and maintained poorly. It’s not wise to assume that an old Honda or Toyota, or any other brand, is going to be a good (or bad) buy based on the brand’s reliability reputation.

Continue reading How to Find a Good Cheap Reliable Car

Certified Used Cars – What is the Catch?

Are certified used cars good deals or not for first car buyers?

Many car dealers sell “certified” pre-owned cars. How are these cars different from other used cars? Are they more expensive? Are they worth considering as a first car?

Most major automobile manufacturer’s dealers now offer “certified” used cars. A certified car has been inspected and repaired according to detailed manufacturer specifications before being placed on a dealer’s used car lot. Although manufacturer’s programs vary in details, all are fundamentally the same in concept.

Why is it important? Certified cars can significantly reduce one of the largest worries of used car buyers: that used cars can have hidden problems that cause problems and expensive repairs after the sale.  Continue reading Certified Used Cars – What is the Catch?

Should I Buy From a Buy-Here-Pay-Here Dealer?

buy here pay here dealersBuy-here-pay-here car dealers provide auto loans to people with bad credit.

Most car dealers do not directly finance loans on cars they sell. They work with outside banks and finance companies to provide loans for their customers. It’s up to those banks and finance companies, not the dealer, to approve and provide customers car loans.

However, a different breed of used car dealer, called  “buy-here-pay-here” dealers,  do provide their own financing without an outside bank or loan company. They primarily function to sell used cars to people who have bad credit and cannot get approved for loans from conventional sources.

Buy-here-pay-here (BHPH) dealers can be recognized by their promotional ads or storefront signs. They use the terms “easy finance” or “no credit checks” or “we finance anybody” or “in-house financing” or “fast loan approval” or “we approve you regardless of your credit.”  They are sometimes called “tote the note” dealers. Continue reading Should I Buy From a Buy-Here-Pay-Here Dealer?

Do I Need a Car Warranty?

Do you need an extended car warranty — car repair insurance?

All new cars come with a new-car warranty from the car manufacturer. There is typcially a general “bumper-to-bumper” warranty that covers just about everything that is not a wear-and-tear item, and a powertrain warranty that covers the engine, transmission, and drivetrain components.

For most new cars, the general warranty is good for 36 month or 36,000 miles, and the powertrain warranty for 60 months or 60,000 miles. Some car brands have higher mileage warranties, as high as 10 years and 100,000 miles.

There are also separate warranties on tires, batteries, and a few other components.

That’s about warranties on brand new cars. What about used car warranties? Do used cars come with warranties? Continue reading Do I Need a Car Warranty?