http://live.pirillo.com - JP may only be 13 years old, but he sure does have an excellent grasp of what you should be looking at and thinking about when shopping for a new car. Here are the tips he sent in to me recently.
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Having crappy cars through highschool and college that were never reliable I decided to buy a "new" car October 2004.
I purchased a 2003 Honda Civic with 23k miles on it.
I bought it at a Honda dealership as a certified preowned vehicle and I also paid an extra $700 to get the manufacturer warranty fully extended until 100k miles.
I don't really intend on keeping the car that long, but the warranty is transferable.
Anyway, I got a fairly decent interest rate and I dont think I over paid too much at the dealer.
But I was just looking at the amount that I have paid in car payments the last 13 months and also the down payment and seeing what I could sell the car for now and it is all just plain depressing.
Is buying cars at dealerships just simply not a good idea?
Or if you are really risk adverse is it worth paying the premium?
I guess i must be as I paid the premium…
Either way, any suggestions on the best way to purchase cars?
As the previous answer indicated, you picked a good used car. Hondas and Toyotas can last many years without trouble. Not to mention Civic is an icon that other automakers are trying to copy over the years.
To your original question whether it's a good idea to buy a new car at the dealer. If it's brand new, dealer is your only choice unless you take factory delivery like BMW or Mercedes Benz that you go to Germany to pick up you car and transport it back to the U.S.
Whenever buying a brand new car, do your research and pick the time around holidays when incentives are offered. Never ever buy first year models for two reasons: 1) You'll never get a better deal on them and 2) you never know what could go wrong with them since they're new to the market.
It sounded like you financed your car through the dealer when you got the Civic. Dealers' fincial terms are usually much higher than your credit unions and other financial sources. There are other online loans you can get for better rates, such as eloan.com or the ones advertised on edmunds.com.
Some people find haggling is troublesome, but I found it fun. Just bear in mind that dealers make more money on used cars than brand new cars. There's more room for negotiation on used cars than brand new cars. Before you buy, use Edmunds.com to check fair market price on brand new cars and bluebook to check fair market value on used cars.
As far as exteneded warranty is concerned, this is where the dealers make the real money. For Japanese makes, you can totally forget about buying extended warranty since they rarely breakdown. For American cars, it depends on how long you want to keep the car. If you plan to keep the car for a long period, you may want to consider the extended warranty, otherwise, you might as well forget about it.
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Okay, something’s wrong with your car. You know it. It just doesn’t “feel” right. That may sound lame when you’re talking to your mechanic, but believe me, it’s not something you want to ignore. Maybe you feel like the car is difficult to handle. Maybe the ride just seems less smooth and stable. Perhaps there’s a vibration that wasn’t there before.
These symptoms almost always indicate a problem. Is it harder to steer your vehicle? Do you have difficulty steering in a straight line? This might mean your front wheels are misaligned or you have worn steering parts. Does your car feel like it wants to steer or pull to the right or left? You’ll need to get this checked out. It may only be that your tires aren’t properly inflated. But it could also mean that your front end is misaligned or damaged in some way. That’s nothing to play around with!
Maybe your car feels like it’s vibrating. Your tires may need balancing in this case. It’s a good idea to check your shock absorbers and struts, too. They might need replacing if the car rides “strangely”. If you put on your brakes, and your car pulls to one side – that means you need to take in it for repair.
If the brake pedal sinks to the floor when pressure is maintained – same thing. Take it in. If you hear or feel scraping or grinding when you apply the brake, this indicates a problem that needs to be checked out. And of course, the no brainer – You need to get your car to a repair shop if the “brake” light on the instrument panel is lit.
Engine trouble is on the menu if you find that your car is hard to start. Other indicators include the check engine light coming on, your car using more than one quart of oil between changes, the car engine running after you remove the key, if the car stalls or idles roughly, and if there’s poor acceleration. Also, getting fewer miles to the gallon is nothing to pooh-pooh. That could mean an engine problem, too.
Say the word “transmission problems” and your wallet being drained of all that’s in it comes to mind. You might have a problem of this nature if there’s a delayed response when shifting from neutral to drive or reverse, if your car doesn’t shift during regular acceleration, or if the engine speeds up, but the car doesn’t respond. If shifting is hard – there could be a problem with transmission, too.
Just for your peace of mind, make sure the mechanic checks to see if it’s just a disconnected hose problem or if maybe the filter is plugged. These repairs are much simpler and cheaper than having your transmission replaced.
When it comes right down to it, you know your car and how it’s supposed to feel when all is well. If something doesn’t quite feel right, get it checked out. You may end up saving money and someone’s life!
And remember the old Fram oil filter commercial…”you can pay me now or you can pay me later.” The sooner you find out what your problem is the less it will cost you in the long run because by waiting you have the possibility of running into other related problems. It’s that domino effect.
I am taking trip to MA in a rental car and am planning on buying a car while I am there and driving both back to NC. Any idea how i handle the licence plate situation? Should I take the licence off the car I have in NC with me to put on the new car or is this a situation where I have to go to the DMV and get a temp plate? Also, couldn't my car in NC be towed if it is sitting out with no plate while I am gone?
Different states have different rules and regulations about out of state registrations. In most states, you can get a temporary license plate to transport the vehicle to your state. If you are buying the car from a dealer, they should be able to help you with that. Some states require that the dealership handles the registration, especially if you have borrowed money. The bank wants to make sure the car is registered. There are a number of websites that can give you the different rules in different states.
Not sure of the sales tax thing, but if you think you will pay less sales tax by buying it in a different state, you are wrong. If the state you live in has a higher tax rate, they will charge you the difference between one state and another. You will not however receive a refund if the state you are buying it in is higher.
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Ever wonder how to go about buying a car? Watch this Early Show broadcast featuring Lemon Law attorney Craig Thor Kimmel on How to Buy a Car.
Duration : 0:4:48
Duration 7:55
Auto Finance Agreements can be an intimidating document when you get in front of
a finance manager at a car dealership. There is so much terminology written by lawyers
that it’s hard to figure out what all the “mumbo jumbo” is all about.
A talk about how to use local free resources (Craigslist and eBay) to located and purchase a reliable mode of transportation for $1,000 or less.
Specifically there are several key points:
1) The car has to be under $1,000 dont go over, you dont need to. Never leave a deposit.
2) Car must be ready to drive, no major broken parts, cant be towed, you dont want someone elses problem.
3) Dont buy from a dealer, go private party. Dealers are shady mmmkay
4) What cars to look for, Older Dodge/GMC/Chevy mini-vans, 4×4 Jimmy/Blazers, Mercedes Diesels, Hondas
5) What not to look for… older jags, gas engine merdedes,
6) Share my experiences with CL and cheap car buying…
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Dan and I try to sell Jimmy our cars
this was for driver’s ed class last year, it’s not the greatest thing ever but w/e.
(mostly ad-libbed)
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The credit report trick car dealers use to pad their bottom works like a charm and 99.9% of people buying a vehicle at a car dealership never knew what hit them. This sneaky little trick will cost you a minimum of $500 on the low side and over $1,000 on the high side. This is how it works:
When Mr. & Mrs. Customer finalized their deal with the salesperson, they agree on price, down-payment, trade value and monthly payments. When they get back to the finance office, the finance manager has several tricks up his sleeve. The interest rate “bump” is just one of many but this is how the deal unfolds back in the finance office…
The finance manager is going to do a credit review with the customers to verify everything that’s on the credit report. The conversation will go something like this: Finance Manager: “Have you seen your credit report lately and do you know what your beacon score is?” Customer: “Yeah, we looked at it a week ago, and we told the salesperson that we have a 705 credit score.” Finance Manager: “Who pulled the report?” Customer: “We went online and got it there.”
Finance Manager: “OK, then that makes sense. This report reflects your auto finance score which is what a car dealership will obtain. When you go online you get an overall generic credit score which isn’t auto financed driven. This score of 665 is your auto finance score.”
The customer’s response at this point can vary. However, the finance manager will tell them at this point they don’t qualify for the lower interest rate. Based on the customer’s credit score the interest rate will go up 1.5% (or whatever he thinks he can get above the quoted payment rate) which will bump the payment $15 dollars a month. $15 a month over 72 months equates to over $1,000 out of the customers pocket.
Let’s go behind the scenes and looked at what really happened. When the dealership pulled the customer’s credit, they pulled from all three credit reporting services; Equifax, Transunion and Experian. All three services have different internal scoring guidelines. What that equates to is three different credit scores and the scores can vary. I’ve seen scores vary by as much as 75 points between the three.
The big trick finance manager’s use is that they will do their credit review with the credit report has the lowest score. In other words, if your Equifax score was 700 and your Experian score was 675, they will tell you that your score is 675 based on the Experian score. By doing that, it makes sense to the customer, and they can justify the bump in the interest rate.
However, the bottom line is this: the banks car dealers use only goes off of one credit report which is Equifax. On a rare occasion, they will use the Transunion score but will never go off an Experian score.
So the next time you finance with the dealer, make sure you see the Equifax credit score. It could save you hundreds of dollars.
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