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Car Buying.

Let me take a minute and talk about how to purchase a car, the right way, and where to file complaints, if needed.

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Whether you are buying or leasing a vehicle, these tips will help you get the best deal and avoid problems:.

• Decide what kind of vehicle, best suits your needs and budget.

• Check out the seller. For car dealers, check with your state or local consumer protection agency  and Better Business Bureau. If you are buying from an individual, check the title to make sure you are dealing with the vehicle’s owner.

• Take a test drive. Drive at different speeds, and check for smooth, right and left turns. On a straight stretch, make sure the vehicle does not pull to one side.

• Handle trade-ins and financing separately from your purchase to get the best deal on each. Get a written price quote before you talk about a trade-in or dealer financing.

• Shop in advance and compare financing options at your credit union, bank, or finance company. Look at the total finance charges and the Annual Percentage Rate (APR), not just the monthly payment.

• Read and understand every document you are asked to sign.

• Don’t take possession of the car until all paperwork is final.

• Choose an auto insurance policy that is right for you.

 

BUYING A NEW CAR.

Do your research first and compare vehicles.

• Research the dealer’s price for the car and options. It is easier to get the best price when you know what the dealer paid for a vehicle. The dealer invoice price is available on a number of websites and in printed pricing guides. Try to locate the wholesale price; this figure factors in dealer incentives from a manufacturer and is a more accurate estimate of what a dealer is paying for a vehicle.

• Find out whether the manufacturer is offering rebates that will lower the cost.

• Get price quotes from several dealers. Find out if the amounts quoted are the prices before or after rebates are deducted.

• Avoid low-value extras such as credit insurance, extended warranties, auto club memberships, rustproofing, and upholstery finishes. You do not have to purchase credit insurance to get a loan.

• Hybrid cars are popular among consumers interested in fuel economy and reducing their negative impact on the environment. These cars combine the benefits of gasoline engines and electric motors and can be configured to achieve different objectives, such as improved fuel economy, increased power, or additional auxiliary power. Also look for the Smartway logo to identify cleaner, more fuel-efficient cars and trucks; visit USA EBN.org Financial Preparedness show page for more information. Also if you want more information about hybrids, electric vehicles, and alternative fuels, visit fuel economy dot gov.

 

BUYING A USED CAR.

• To learn what rights you have when buying a used car, contact your state or local consumer protection office.

• Find out in advance what paperwork you will need to register a vehicle. Contact your state’s motor vehicle department. USA EBN.org has a link to assist you on this.

• Check prices of similar models using the N A D A Official Used Car Guide published by the National Automobile Dealers Association or the Kelley Blue Book. These guides are usually available at local libraries.

• Research the vehicle’s history. Ask the seller for details concerning past owners, use, and maintenance; you should also find out whether the car has been damaged in a flood, crash, or labeled a “lemon”. Also visit www.vehiclehistory.gov to buy vehicle history reports, gathered from state motor vehicle departments and other sources. These reports are helpful but do not guarantee that a vehicle is accident-free.

• Your state motor vehicle department can research the car’s title history.

• The National Highway Traffic Safety Administration’s (NHTSA) website lets you search an online database of manufacturer technical service bulletins and review crash test ratings.

• The Center for Auto Safety provides information, on safety defect recalls, complaints and technical service bulletins. Make sure any mileage disclosures match the odometer reading on the car.

• Check the warranty. If a manufacturer’s warranty is still in effect, contact the manufacturer to make sure you can use the coverage.

• Ask about the dealer’s return policy. Get it in writing and read it carefully.

• Have your mechanic inspect the car. Talk to the seller and agree in advance that you will pay for the examination if the car passes inspection, but the seller will pay if significant problems are discovered. A qualified mechanic should check the vehicle’s frame, tires, air bags, and undercarriage as well as the engine.

• Examine dealer documents carefully. Make sure you are buying—not leasing—the vehicle. Leases use terms such as “balloon payment” and “base mileage” disclosures.

 

DEALER VERSUS PRIVATE-PARTY PURCHASES.

The FTC requires dealers to post a Buyer’s Guide in the window of each used car or truck on their lot. This guide specifies whether the vehicle is being sold “as is” (in the vehicle’s current condition, without a warranty) or with a warranty, and what percentage of repair costs a dealer will pay under the warranty. Keep in mind that private sellers generally have less responsibility than dealers do for defects or other problems. FTC rules do not apply to private-party sales.

Expect to pay higher prices at a dealer than if you buy from an individual. Many dealers inspect their cars and provide an inspection report with each one. However, this is no substitute for your own inspection. Some dealers provide limited warranties, and most sell extended warranties.

Watch out for dealer warranties that are “power train” warranties only, and not “bumper-to-bumper,” full-coverage warranties. It is best to compare warranties that are available from other sources.

Some dealers sell “certified” cars. This generally means that the cars have had a more thorough inspection and come with a limited warranty. Prices for certified cars are generally higher. Be sure to get a list of what was inspected and what is covered under the warranty.

In general, buying a used car from a dealer is a safer option because you are dealing with an institution, which means you are better protected by law. Purchasing a car from a private seller may save you money, but there are risks.

The car could be stolen, damaged, or still under a finance agreement. If a private seller lies to you about the condition of the vehicle, you may sue the individual if you have evidence and you can find him or her. An individual is very unlikely to provide a written warranty.

For more links about this subject, visit USA EBN dot org, financial preparedness web page.