Buying Used Cars

A franchised new car dealership is a reliable, if not the only, source for anyone who wants to buy a new car.  But to those who prefer buying used or previously owned cars, there are plenty of options and sources one could choose from to be able to make that vehicle purchase the perfect one.

The following are some of the readily as well as easily available resources to consider when buying a used car.

The Used Car Superstore

Imagine it as the Wal-Mart of used cars.  There have been numerous used car superstores that have mushroomed over the last five years. These superstores usually have a large inventory of used cars, and can number anywhere from 400 to 500 vehicles.  The cars found in these stores more often than not are late models. 

The vehicles found in these stores come from auctions that cater specially to car dealers. The good thing about buying from these used car superstores is that the warranty they provide are often equivalent to the warranty coverage provided by dealers who sell new cars.   However, it is still best to compare.

New Car Dealer

The logic here is that since new car buyers usually trade in their old cars when they buy a new one, the collection that new car dealerships have are almost always extensive.  So used car buyers have a wider range of vehicles to choose from.  Also, new car dealerships provide better reconditioning to the used cars traded to them.  They are also a more reliable source of used cars because their business is more established compared to other used car dealers. Be aware though that sometimes it would take a lot of negotiation on the price of the vehicle to be purchased.  They may also attempt to make you buy more car than what you would actually need.

Used Car Dealers

There are usually hundreds of used car dealerships in every state.  Sometimes, they are small operations that contain not more than fifteen cars in a lot.

Established used car dealers, can have as many as 100 cars or more on their lot.  The great thing about buying from used car dealers is that the prices they offer are a lot less than new car dealerships.  Also, it is fairly easier to negotiate with them.  Not so good news though, the quality of these cars are usually less than the new ones of course.  There also may be a smaller selection of makes and models.

Private Owners

The good thing about buying from private owners is that the prices that they offer are usually reasonable compared to dealers because this is in accordance with book values.  You also get the opportunity to actually speak with the owner of the vehicle and witness for yourself how the car was or was not, cared for.  A potential disadvantage of this scenario, however, is that it could be a bit inconvenient driving to the private owner’s place especially if you are considering looking at eight different cars.  Basically that would be eight different places, time and appointments.

Beware though private owners who have a stable of used cars to sell may actually be a dealer.  Do not be afraid to ask if you could possibly see the title and registration.  Start to get suspicious if you see it is only a few days old.

Car Auctions

The last decade has seen the development of public auctions for vehicles.  Originally, auctions like these were reserved primarily for licensed car dealers.  Now, even individuals have the opportunity to bid aggressively for used cars.

The quality of these cars put up for auction, as well as the selections of vehicles, actually vary from one auction to another.  There are those auctions that specialize in late model vehicles while there are others which dedicate themselves to cheaper and less expensive vehicles.

The good thing about buying used cars from auctions is that you can conveniently compare prices and cars because they are shown side by side with each other.

Also, the prices that they offer are most likely lower than dealerships.  However, there is not much chance for you to thoroughly inspect the vehicle being auctioned off.  And since you are buying from an auction, it is therefore understood that all sales are final. Any car purchased is automatically yours.

Plus, the bidding frenzy could take a hold of anyone and there is a great possibility that you could pay way more than what a vehicle actually costs.

Easy Car Buying Checklist

Here’s a quick reality check(list) when car buying.

Each car buying tip could certainly be expanded upon (and you should before you head out to buy your next car) but for our purposes here, I just want to give you a bit of mind jog to get you started on what you need to consider when car buying.

First… forget the car and take a look at your finances and your budget. You need to crunch the budget numbers with brutal honesty to determine what you can truly afford (not necessarily the same as what you want).

While we’re on the topic of finances, be sure to know what your credit score is… and not only that… check your credit report for mistakes and inaccuracies. If you discover them, get them fixed before you starting looking for a new car loan.

After you’ve completed the financial leg of the upfront research, spend some time doing some online car research on what’s available that fits well within your budget… this is valuable time well spent before you go to the car dealer… this alone could save you thousands.

Narrow your online car price research down to a short list and don’t waste your time looking over vehicles that don’t fit your needs or your pocket book. Plus, by doing this you’ll ultimately work more efficiently once you’re on the car lot and this will save you time and frustration during a lengthy process.

Once you’re working off your short list, you can really start crunching the car buying numbers and prices and ultimately begin to look at some new car financing options… now days there are some very good new car financing options online where you can get a good feel for what type of interest rate you’re going to be looking at.

Once you’ve got all these numbers together, now it’s time to take a hard look at the overall cost of ownership of the cars that have made your list of possibilities. Along with getting the pricing of a new car, you’ll want to make sure you find out about what the cost of your car insurance is going to be… so go ahead and get an insurance quote from a local provider. Also, estimate what your annual cost of gas is going to be, as well as, look up the general repair and maintenance of the that particular model.

Now and only now do you want to venture off the car dealer.

Once there the key is to take your time and don’t be rushed. In fact, you should put all of your car quote research into a nicely organized folder and take that to the car dealer with you when car buying. Don’t rely on memory.

Preparation is the key to success when it comes to having a favorable experience when car buying… so be prepared and enjoy your new ride.

A Spot Delivery When Car Buying Can Leave A Mark

In the car business a ’spot delivery’ is a common practice. But just like about anything else that involves revenue, sales, and commission, there are those that are unscrupulous around us.

What happens in a ’spot delivery’ is that the buyer agrees to the terms and conditions of the loan and to take delivery ‘on the spot’… even though the financing contract isn’t yet been picked up and actually approved by the bank.

All dealerships have working relationships with various financial institutions that approve (and disapprove)the loan papers.

Sales managers work with and evaluate potential buyers credit reports and credit scores all day long in conjunction with the working relationships that they have with their various lenders. Needless to say there are many business hours that a car dealership is open and doing business that the banks and lenders are not. As such, dealers will make the decision to ’spot deliver’ a car based on the probability that they will be able to get the loan as stated in the contract from one of the lenders.

For those customers with good to excellent credit, this is rarely if ever a problem. The problems occur when someone’s credit is in the gray area. Also, more often than not this usually (but not always) involves a used car purchase.

As you might imagine, under the aforementioned business practice there would be advantages and disadvantages (as well as the opportunity for exploiting). The most prominent advantage is for both sides. For the dealer… obviously the sale. For the consumer who may need transportation, the ability to take delivery ‘on the spot’ and not have to wait for the next available approval such as when a sales takes place after hours or on the weekend.

Again, this all depends on your credit rating and if you are deemed a good risk.

The problems can occur when those who don’t have the best of credit and don’t have the income to overcome the lackluster credit, ultimately don’t get approved for the financing terms that the dealer put them in the car at.

So what happens… first of all all the contracts that I ever dealt with state that the agreement that you are signing up for is contingent upon approval from the lender. In other words, the agreement isn’t binding until the vehicle financing is approved.

If the car financing isn’t approved… the ’spot delivered’ car must be returned or you’ll have to re-sign papers for a less favorable deal.

When a dealer mis-calculates and doesn’t get a car buyer approved for the terms that they put the customer in the car with, it’s not a pleasant situation.

I know that there are unscrupulous dealers out there and this is where the window of opportunity opens for them… but that’s a whole other article and for the purposes of this one, I’m going to just stay with the idea that the dealer got a bit too aggressive thinking they could get the customer approved.

So, when the bad news comes back that none of the lenders will approve the loan ‘as is’, outside of returning the car, the customer will generally have to come up with a larger down payment (this puts the lender at less risk), accept a higher interest rate (which will mean higher payments) or in some cases have to come up with a co-signer of good credit standing.

None of these options are pleasant, and for me as a sales manager weren’t pleasant to have to be the bearer of the news either.

8 Car Buying Tips To Avoid This Situation:

1. First and foremost know what a ’spot delivery’ is (which you should by now) and know what can happen if the dealer can’t get you approved.
2. Check with the Better Business Bureau and/or only visit reputable car dealers.
3. It’s in your best interest to find your own loan rate and terms. If you can, apply for and arrange a loan so you’ll already know what you’re approved for. At the very least, talk with your bank or credit union and see what term and rate you could qualify for… you’ll then be able to compare with the dealer’s offer and get the best car deal possible for your scenario.
4. This is a biggie… especially if your credit is risky… if you finance through the dealer, after signing the papers, simply decline to take a ’spot delivery’ of the car… just tell them you’ll be back to pick up the car once the financing has been dutifully approved.
5. Give yourself a cooling off period. This is a good idea because buying a car can be a long and tiring day… give yourself a chance to get yourself back together after the rush of the car deal.
6. Read everything… ask questions!
7. Keep a record of everything and don’t pay cash.
8. Get it in writing… if you’re going to accept the car buying ’spot delivery’ it is not too much to ask to get in writing that your trade-in WILL be returned to you if the financing should fail… and… if the financing does go through but with different credit terms than you were ’spot delivered’ at… you are free to cancel the deal.

Car Buying Tips - Don’t Invest

Car Buying Tips

It drives me crazy when people use car buying and investing in the same sentence.

O.K… excluding antique and classic cars, I’m talking about basic everyday car buying. So, here’s the number one tip… cars are not investments… in fact they are quite the opposite.

Your car begins to depreciate the before the ink is even dry on all those papers you just signed.

How much you ask?

On average both cars and trucks will lose more than 20% of their initial value in their very first year!

Ouch!!!

If no other reason you should now be convinced it is in your very best interest to get the best possible car deal you can when you buy your car… with that kind of depreciation hit, you sure don’t want to overpay for your car right out of the gate.

Using nice, round numbers to illustrate this hit you’re taking… if you paid $20,000 for your car; after but two years of driving your $20,000 car might now be worth about $13,000! In case you are wondering that works out to about $300.00 per month to the negative… nice investment eh?

If your house or your retirement account offered up to you those types of ‘investment’ numbers, you’d probably feel like jumping off a cliff… So, again… car buying tip number one… all together now… a car is not an investment…. it’s a major expense in your life.

Keep this at the forefront of your mind the next time you feel that itch to buy a car feeling… if you do, this type of reality will be the the cold bucket of water for you.

If you’re driving a car that is getting you around and is paid off, chances are it’s older and as such you’ve already paid for the depreciation, so get some good use out of your money and keep driving your car for as long as it will stay reliable and get you to your job and back.

If, however, you just can’t stand the thought of driving your current car and your going to scratch the proverbial car buying itch, at least get the best deal you can… so that’s where we’ll start our next set of car buying tips.

On Extended Car Warranties

On Extended Car Warranties

If you’re bantering around in your mind as to whether to go for an extended auto warranty, you’ll know doubt have questions… questions worth researching, asking and getting the answers to.

O.K… let’s get the really obvious out of the way first.

How long does the car warranty last? But, beyond that… what’s the time limit of the contract and how far does it go beyond the the original warranty with the car?

Of course, you want to the mileage limit to the warranty as well. Even most extended warranties won’t go beyond 100,000 miles.

That’s the basic stuff to know… or ask if you don’t.

The meat of the questions are involved in what exactly is covered. Are repairs included? If so, which ones? And probably more importantly, you need to know what is NOT covered. Parts that break are certainly different than parts that wear out… with extended car warranties it’s very important to know which is covered and which is not.

Deductibles are also a biggie with extended warranties on your car. A deductible is the amount of the repair that you’ll be responsible for before the warranty coverage kicks in. The higher deductible you are willing to risk, the lower the cost of the extended car warranty.

Another point of interest with the deductible that you’ll want to know is whether the deductible is per repair or per visit? This can really make a BIG difference. In others words if you have a $250 deductible… if your extended coverage is per repair and you take your car in and there are 3 separate repairs needed on your car… you’ll be on the hook for $750 bucks. If your deductible is per visit… $250.

Another very important question to get the answer to is - who does the repairs? Or… who is allowed to do the repairs in order for the warranty to cover the actual work? As a rule of thumb, the manufacturer backed extended car warranty is usually good at dealers around the country… a dealer warranty is usually good at the dealership itself… if you’re considering an aftermarket or third party extended warranty, you’ll want to make sure where you have to have any warranty work done.

How does the bill get paid?

Do you pay and get reimbursed… or does the warranty company pay? Also, is there any type of tedious authorization process involved.

What type, if any, scheduled maintenance is required on your end?

And finally, can the extended car warranty be canceled?

Some can be canceled within a certain period, some can be canceled with fees, and others cannot be canceled.

Be sure to do due diligence on the company that is behind your extended warranty and how long they’ve been around, how many customer complaints there have been.

Getting the Best New Car Deal

Ah yes, the car buying experience.

Whether it’s working on getting your best new car deal or your best used car deal for that matter.

It’s an event, a project, a day out amongst friends we all enjoy. You just can’t beat it!

The whole car buying experience….. a day of rest and relaxation.

Assuming you’re the type that feeling of confusion, occasional anger, and constant frustration is a source of relaxation for you.

Ok, maybe not… So let’s take a look at what you’ll be up against.

O.K.

Before we jump in and get you started, I want to take a brief moment to tell you what my website is about.

I’m all about helping you buy a car and all the basic pieces of putting together to get the best deal on a vehicle you can for yourself. How to, when to, what to, what not to… and all that.

There are certainly many good car buying advice and research websites out there. But with this website, unlike many of the others, you’ll get information and articles written by someone who spent years in the car business.

I’ve been on the sales floor convincing people to buy. I’ve sat in hundreds of sales meetings both good and the one’s where we were basically told our jobs were on the line this month if we didn’t make our projections.

I’ve managed the finance and insurance department selling not only F&I, but security add on’s, glass etching add on’s, extended warranties, and anything else the dealers saw potential profit on.

Used cars… you bet. Done that too. Primary financing, secondary financing, going to auctions every week to buy inventory. Working wholesalers to get every penny out of car that I could possibly get.

For the purposes of this website I have tried to keep each page as standalone as possible so you can jump around to the various areas of topic and all will still flow and make sense.

So take a look around and come back later… or roll up your sleeves and learn how to save yourself some big bucks on your next car buying excursion.
Are dealers and salespeople in the car business to make a profit and support their families and enjoy the things in life they like to do?

Of course, they are. Aren’t you? Isn’t that why you work hard everyday?

Are there good, honest dealers and ….. well not so good, honest dealers…. well yes. Are there good, car salespeople… and not so good, honest automobile salespeople? Well, of course there are. Doesn’t that seem to be the case no matter who you deal with in life?