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Plan Ahead
Planning ahead can save time, money and increase efficiency. Is there an old vehicle that is being
replaced that must be sold or traded? As a rule, consumers can almost always get more money through
a private sale rather than trading in. Car Dealers pay blue book or wholesale value for trade-ins.
You can get an estimate of your car’s value at:
www.kbb.com - Kelly’s Blue Book is a terrific resource for finding
trade-in values given by car
dealers compared to selling to private parties. Kelly’s also has new car pricing including free
price quotes, buying on-line, insurance and financing quotes. Kelly’s decision guides and tips
sections assist consumers in side-by side comparisons, FAQ’s, advice, safety crash information and more.
www.nada.com - The National Automobile Dealers Association (NADA) is an
on-line version of what
car dealers use in a printed guide to access the wholesale values of automobiles. Consumers can
find their used vehicle’s value, find new car dealers or search local dealer’s inventories, get
hassle free price quotes on new cars, make side-by side comparisons, obtain the latest rebate offers,
and preview new models.
Selling an old vehicle privately versus trading in
A $50 classified ad and a $100 investment in a detail job can yield hundreds if not thousands more
than trading a car in. If selling privately, it’s never a good idea to give your home address to an
unknown party. It is best to meet prospects at a nearby shopping center or gas station, and insist
first on the phone that they bring a copy of a valid driver’s license and insurance card (when available).
New car dealers often inflate trade-in values while lessening the discount on the new purchase, making
it appear to consumers that they are getting a bargain on their trade. It is wise to first negotiate
the sale price of the new vehicle to the bottom line then bargaining for the best offer on a trade.
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Set a budget before shopping
First set a budget in monthly payments... and a total vehicle cost. Sometimes car salesmen are trained
to ask you what your monthly budget is. By disclosing that, you may wind up paying more for the purchase
price than if you were to first negotiate down from the asking price. Consumers can find payment
calculators to determine monthly payments based on purchase prices, term, and interest rate at
www.bankrate.com or Kelly’s Blue Book or
NADA. You can also shop interest rates on these sites to compare with what
car dealers are offering. Decide and stick with the maximum that you can comfortably put down. Don’t
be persuaded to put more down to lower payments unless you willing and can afford to.
Obtain firm insurance quotes and factor them into monthly budgets. You may be able to afford the car
payment, but that cost combined with the insurance payment may place you beyond your budget.
No pressure, no hassle
Remember the deal that is here today will be there tomorrow despite what the car salesperson may tell
you. In the typical scenario a salesperson works with the buyer up until the "close." Then a manager
(in the trade called a T.O. man for "takeover") steps in to seal the deal. There may be strong
incentives to sign that day such as a free alarm system or other upgrade but those will be there tomorrow
if you don’t feel that the bargain is right. Compare pricing either through Kelly’s Blue Book or NADA
guides at your local bookstore or online at the above links before you begin shopping. It is a good idea
to take someone with you for a neutral opinion or to act as the voice of reason.
Certain car manufacturers such as Saturn or individual dealerships have "no-haggle" policies, making the
process more comfortable. Familiarizing yourself will be helpful by telling you what you can expect.
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Take a two day test drive
Ideally, it’s a great idea to rent the vehicle you are most interested in purchasing for a couple of days.
Then you can experience the vehicle at your own leisure on your own terms. It is difficult to get the
genuine feeling for a car’s performance in a short test drive at the dealership with the car salesperson
along for the ride.
If renting your desired vehicle is not an option, insist a long test drive at the dealership over various
road conditions not just a short hop around the block. Turn the radio down to hear the how the vehicle
responds to your driving. Try to leave the salesperson behind if possible. The last thing you need is
a pitchman in the back seat.
Pre-owned vehicles
If it’s a pre-owned vehicle, insist on your local mechanic giving the vehicle a clean bill of health.
Read and understand the warranties (especially the disclaimers) before signing. These typically range
from "as-is" to 30 days on pre-owned vehicles. Insist on documentation of all claimed repairs by
dealership. Ask if the vehicle has ever been in an accident and whether the title is impaired by a
flood, theft, reconstructed or lemon status. Ask how many previous owners there have been.
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Warranties
Most automobile manufacturers offer factory warranties of several years that cover major systems, like
drive trains and transmissions, with shorter warranty periods, ranging from 36 to 60 months, on
everything else (except normal wear and tear items like brakes).
The cost of extended warranties must be weighed against what is and isn’t covered by factory warranties
and over what period of time the coverage applies. Overall they may not be worth it. Steer clear of
third party warranty companies because mostly all state Lemon Laws and federal laws contain provisions
applicable to factory warranties only. If considering an extended warranty, insist on it being
underwritten by the automobile’s manufacturer.
Before Delivery
Read and understand the fine print
Don’t feel rushed to sign the papers and drive away. The commitment you make will be one you have
to live with for a long time. Make sure that the vehicle’s total cost lines up with your negotiated
bottom line. Review all other itemized costs including taxes and surcharges to insure there are no
hidden costs, such as dealer preparation fees, which may not apply. For dealer arranged financing,
confirm interest rates, term, and late payment and prepayments penalties. Certain lenders’ fees are
negotiable, such as early disposition fees on leases or prepayment penalties. Make certain the all
of the blanks are filled in. If you are unsure of something, demand a clear explanation that makes
sense. When in doubt have a licensed attorney review all documents before you sign them. Your
dealership can fax documents to your attorney for review before the delivery date.
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Inspection
Take time to thoroughly go over the entire vehicle to insure it is free from defects and has all
promised amenities. If there is something missing, insist on a written document (dealers call these
"we owes") declaring what is to be performed and a deadline for performance.
Retain
All documentation including manufactures brochures, retail sales installment contract, loan agreements,
and handwritten notes you may have made concerning sales representations.
Maintain
Prescribed maintenance at manufacturer recommended intervals. Keep copies of all service records in a
safe place at home.
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