Transcript How to Buy a Car!

Step by Step Guide
HOW TO BUY A CAR!
NEW OR USED
A new car depreciates (decreases in value) quickly
- after 3 years is worth 60-70% of it’s original value
($20,000 = $12,000) – as soon as you drive off
the car lot your NEW $20,000 car is only worth
$18,000
 A new car smells good and has a warranty
 A new car may have problems like poor design or
manufacturing defects
 You may not be able to afford all the new bells and
whistles later

USED
Used will save you a lot of money
 Used is a gamble – no warranty that the car is
accident-free, has real mileage, and was properly
maintained (oil changed every three months)
 Used may have hidden problems like a worn out
automatic transmission ($2,000+) or engine
problems that may not have been obvious when
you test-drove the car ($2,000-$10,000)

TAKE THE RISK OUT OF BUYING USED
Be prepared
 Research – Read Reviews, Consumer Reports,
Ask Friends, Compare Options, Gather Gas
Consumption Data on Make and Model
 Examine Reliability Ratings
 Determine Maintenance Costs and Upkeep
 Narrow your choices to TWO
 Go into a dealership knowing what you want

SCENARIO

A friend of mine bought a used BMW for a great
price. When he took it for servicing, they
discovered that the rear shock absorber was
leaking. The price for the part alone was close
to a $1,000. (Another $200 for labor) Finally,
he sold his BMW and bought a used Camry that
proved less expensive to maintain.
CHECK CAR’S HISTORY RECORD
Vehicles that have been flooded or restored
after serious accidents, those with rolled back
odometers (mileage), heavily abused vehicles
(ex: rentals), those with outstanding liens (used
to take out a loan on something else), can be
eliminated after simply checking the history
record of the vehicle
 To check a car history you use the VIN number
usually printed on the driver door

SELLER MAY NOT BE TRUTHFUL
Check out the car yourself
 Get a mechanic you trust for an inspection
 NEVER give a deposit or sign a contract before
the car is inspected

PAPERWORK
If buying from a private owner, check with the
Vehicle Registration Authorities to make sure
there are no liens and that the car has not
been stolen
 If buying from a dealer, check warranty policy
and fine print – Do not rely on a salesperson’s
verbal promises – Get it in writing – Find out if
there is any remaining original warranty

CAR VALUE AND PRICE
Don’t look for the cheapest car
 You want a car in good condition
 They sell it cheap because there is something
wrong with it

DECIDE HOW MUCH YOU CAN AFFORD
First determine your bottom line on how much
you can afford from your budget
 Sometimes they hide the higher price total
under “low” monthly payments – takes longer
to pay the car off
 Remember sales people make a commission
(extra pay) off the vehicles they sell

TYPE OF CAR – PRICE RANGE
$10,000 - $18,000 decent car/3-4 years old –
find at a new car dealership – sometimes through
a private owner
 $5000-$9000 6-9 year old car-high mileage –
good shape – find at independent used car
dealers
 $1,000-$2,000 – a simple transportation
machine – gets you from point A to B – Plan on
spending a lot more money to repair it – can get
through a private owner or car lot

INSURANCE
Before you make your purchase you need to
find out how much the insurance will cost
 You can get online quotes through:

 GEICO
 INSURANCE.COM
 AIGDirect.com
 21st
Century Insurance Company
WHAT MILEAGE IS OKAY FOR A USED CAR?
155,000 miles and higher is a lot of miles
 Low miles does not necessarily mean a good
car
 60,000 -80,000 mileage – great – BUT make
sure the car was maintained

 Grandma
got sick – car sat in garage for 6 years –
car was 10 years old with only 40,000 miles – not
good because mechanical items just sitting tend to
deteriorate
HOW OLD IS TOO OLD?
Don’t buy a car older than 10 – 12 years
 It doesn’t matter how cheap it is – the car is old
and will need lots of repairs and new parts
 3-5 years perfect choice
 Remember – 2000 model year does not mean
production year – August 1999 production 
MAKE PHONE CALLS

Inquire information about a car in the
newspaper
 Answers
like: “It is a friend of mine’s car”
 “I bought it a couple months ago”

Be suspicious – You need to deal with the
actual owner or second scenario – the car may
need some major repairs that they didn’t know
about and now trying to dump it
NEGOTIATE A DEAL
If they ask $15,000 offer $13,000
 Be ready to leave if the dealer is pressuring you
or you have hesitations about the vehicle
 Don’t decide immediately – sleep on it
 Don’t sign unless all your conditions are met
 Competition is good – tell the dealer you are
also looking at another place and comparing
 Get promises in WRITING
