| How
to buy a car (especially if you've never done it before)
By Seth Bracken
April 29, 2009 | Like most projects, when buying a
car it's best to start with the Internet, says Zachary
Call, Ford sales associate.
Consumer Reports,
Edmunds.com, and Kelly
Blue Book are the tools that any would-be car buyer
needs to master before buying a car. And while there
are about as many different cars as there are people,
there is a formula of sorts to successfully buying a
car, Call said.
Step 1: Read car reviews. There are
plenty of criteria that you need to decide on. Do you
want a sedan, compact car or something larger? There
are safety ratings, customer reviews, performance ratings
and the option to compare different makes and models.
Step 2: Make a budget. For a typical
five-year loan with an average credit rating, every
$1,000 adds $20 a month for the payment. For example,
if you buy a car for $10,000 your payment will be around
$200 a month. Don't forget that the price on the sticker
is not how much it will cost to drive away. There are
documentation fees, sales tax, dealer's fees, plus the
extra cost for a warranty. These fees will be about
$1,000 for a car around $10,000. A five year or 100,000
mile warranty will add about $15 every month onto the
payment.
Step 3: Go online to look at prices
and models. Autotrader, KSL and Craigslist are all great places to get a
feel for prices on cars compared to mileage. On autotrader.com
you can enter in the make, model, mileage, whether you
want an automatic or manual, or you can do a general
search.
Keep in mind that Internet prices are almost always
cheaper than the prices on the lot because it's much
more competitive online so dealers will list the lowest
possible price in most cases. So before going to look
at a car, make sure you have checked the price online
and make sure you do a price match.
Step 4: Shop around. Kelly's Blue
Book lists a suggested retail price for cars based on
mileage, make, model, extra features and condition of
the car. It's important to know the approximate prices
because cars sales people will always try to make as
large a profit as possible.
Step 5: Test drive the models that
you are interested in. Don't let the sales people get
you to commit before you are ready. Test driving is
not a commitment. Carfax is a history of each car and
most dealerships will provide the Carfax sheet for free.
This report will tell you how many owners the car has
had and about any accidents that it may have been in.
After deciding on the cars that you are most interested
in, look for the best buy possible, don't feel rushed,
there will always be cars to buy. But really good buys
can go fast, so when you do find the right car, don't
be afraid to act.
Most dealers will help you find the best interest
rate and set up a loan for you. However, Call said sometimes
dealers will not be perfectly honest and you should
look through all of the stipulations of the loan before
signing anything.
Before going in to sign the papers, decide whether
you want a warranty or not. It's a personal decision
but if something breaks, you could save quite a bit
of money. On the other hand, the car could be just fine
and you could end up paying about $1,000 for nothing
but the piece of mind of knowing that if something were
to break, you wouldn't have to pay for it.
Some cars are still under the manufactures warranty,
usually if they're less than 4 years old.
And while car dealerships generally don't sell cars
that have a history of accidents, some will sell what
are called customer buy backs (CBB). These are cars
that were bought, had a problem and weren't able to
be fixed by the dealer within 30 days and the manufacturer
had to buy the car back. After fixing the car, they
can be sold again by certified dealers. So if the price
of a car is surprisingly low, and it seems like a deal
that's too good to be true, it probably is.
Some dealers price the cars too high so they have
lots of wiggle room and some list the lowest price possible.
But you never know about the price, so do your best
to get the sales person to go as low as possible. That's
why it's important to know the prices of other like
models with similar mileage. Tell the sales person about
lower prices and ask if they can come down to price
match. Don't forget that the dealership is a business
and will try to sell the car at the highest price possible.
"We're here to make as much money as we can," Call
said.
The other option is to buy a car from a private seller,
maybe from an ad in the newspaper, on Craigslist.org
or another web site. However, extreme caution must be
used because some sellers won't be honest and there
is more responsibility for the buyer to have the car
checked out to make sure there aren't any problems and
the car will pass safety emissions tests.
When buying a car take your time and do your research
and you'll do just fine.
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