Can I afford a new car?
Living within a budget and being financially responsible is much more important than getting a car that will make you look cool. Preferably buy a car that you can buy outright for cash, that way you don’t have to be a slave to an auto payment. If you do finance, make sure the payment is one that you can easily budget and still provide for your family if the unexpected happens.
What kind of maintenance will this car need?
It’s important to know what it costs and what all it entails to keep a car running right and lasting for the long haul. Some vehicles require more scheduled maintenance than others and some come with hefty costs to do somewhat routine jobs. Check for things like the frequency of timing belt changes, spark plugs and other tune-up items, & fluid changes and flushes.
What is the resale value of this car going to be when I sell it?
Estimate how long you will own this car and how many miles you will drive it while you own it. From there, look at other cars in the same age range and with the same miles as your car will have when you are ready to trade it in and see what the value of those cars are. For instance, if you were buying a 2000 model year with 100,000 miles and planned on keeping it for 3 years and 36,000 miles, then look at the cost difference between the 2000 and other 1997’s with 136,000 miles. If the cost difference is $3,000, then that car may only depreciate $1,000 per year if you keep it in good shape. Honda’s and Toyota’s seem to have the best resale and the lowest depreciation costs.
Does the vehicle have a clean title or has it been in any major accidents?
Many cars 15+ years old have been in a fender-bender or two, but cars that have had serious structural damages, bent frames, or collapsed/crushed uni-bodies could put you, your family and others on the road in serious risk. Look for obvious repairs, repainted panels and existing damage that hasn’t been fixed. More importantly always look at the title. If the title is branded as a “rebuilt”, “salvaged”, or “reconstructed” then it was most likely wrecked severely enough that the insurance company had to total it out. Typically these cars are put back together in back yards by shade-tree mechanics or moonlighting body guys. They can be dangerous and worthless if they are not fixed up to DOT standards. If it has a salvaged title it “could” be from reasons other than a car crash but make sure you get written, documented evidence before you “take someone’s word for it” that it was a theft recovery or an engine that went bad. Also be wary of flood and fire damaged cars, they may look pretty, but they could be an electrical nightmare.
Am I going to buy private party or from a dealer?
Buying from a dealer can sometimes be a scary task, however from 20 years of experience, you are WAY more likely to overpay or buy a lemon dealing with private party sellers or buying off of Craigslist. Many private party sellers are actually “dealers” without dealer licenses. They are called “curbstoners” and they basically buy and sell cars illegally in order to make hefty profits and avoid paying taxes. If you buy from a dealer you AT THE MINIMUM know that the dealership has been inspected by the state, city, and Department of Licensing. Before being licensed they would have had to go through a thorough background check, credit check, criminal check, and they must be Insured & Bonded. Plus, you know where they are and you can always come back if there is a problem. If you bought from someone off of Craigslist who is using a fake ID at a Kmart parking lot, you will have NO recourse if you buy a lemon. If you do buy from a private party, here is a checklist to protect yourself:
- Always ask the seller for photo identification and make sure the title on the car matches their driver’s license. If they are “selling a car for their aunt, girlfriend, mother, sister, or friend” then they probably are a phony! Chances are they could have rolled the odometer back. Ask for service records that can prove the miles are accurate
- NEVER meet anywhere but at their home. You want to verify their home address with the title and their driver’s license. If there is a problem later on, you need to find these people!
- Have the car inspected and take it on a good test drive.
- LOOK the the car and the title over very cafully to ensure it does not have a branded title (rebuilt, salvage, flood, junk, reconstructed, or odometer discrepancy)!
- Also, check to make sure that they did not remove, intentionally burn out, or tape over the “check engine”, “SRS”, “Air bag”, or other warning light bulbs in the dash. This is a common problem and “tactic” that many curbstoners try to pull off.
Stick shift or automatic?
Which one is better? Well it depends… If you aren’t trying to juggle your cell phone, your quad mocha, a bagel and the steering wheel then a manual transmission may be a better choice… Maybe . Stick shifts typically get better fuel economy, have better performance, often are more enjoyable to drive, and many times cost less to repair, but if you are a multi-tasker than an auto may be a better way to go. Good solid automatic transmissions typically last a long time without problems, but when they break it is generally upwards of $2,000 to rebuild them. However, a stick shift is usually a fraction of the cost to rebuild, but they do require clutches as a regular maintenance item at about $600 per pop.
How long should I test drive the car?
Most people hang on to their cars for 3-5 years and this is usually one of the larger purchases they make (besides their home) in their lifetime. You want to make sure that number one, the car has the right amount of space for all of your passengers (even ones that may enter your life in the near future ) and all of your cargo. Number two, that it fits you well, you don’t have any major blind spots, and you are comfortable driving it. And lastly, make sure that it operates correctly and there are no major mechanical problems.
- Let the vehicle warm up to full operating temperature
- Try it in reverse and all forward gears
- Take it on the freeway and check the alignment and cruise control (if equipped)
- Take it over a bumpy road and feel the suspension and the steering
- Make sure you check the 4 wheel drive (if equipped)
- Check all the gadgets and power options
What are the total costs to own this car?
This all boils down to: Be prepared! Research the fuel mileage, the insurance costs, the maintenance costs, and the total sales/finance price. Estimate how many miles you will drive the new car per year and compare to the car you currently drive and/or others you are considering. See what the difference in fuel costs and maintenance will add up to. A “deal” may save you a few bucks in the beginning, but in the long-run it could cost you if you don’t have all of the facts.
What is the car I am looking at worth?
There are a lot of guide books that can help you determine the value of a used car, however the older the car gets and the more miles it has on it, the harder it is to value over the computer. These resource guides are really designed to help banks and lending institutions determine the “loan” value of the vehicles. This gives them a rough idea of what the car may be worth if you default on your loan and they have to sell it at auction. Use common sense when you are determining the “market value” of the car. See what others are selling for and look at comparable vehicle prices. But remember, no two used cars are alike, so they could look the same but be valued completely differently based on options, condition, miles etc. And the value guides don’t do justice for vehicles in exceptional condition, very low or high miles, or vehicles in high demand. For instance some cars can be purchased thousands of dollars below guide values… other bring thousands over. It all depends on supply & demand and condition.
What kind of car should I buy?
Start by looking at the options that you MUST have: for instance 4 doors, fuel efficient engine, air conditioning, automatic transmission and power windows. Then make a list of the things that you would LIKE to have: like leather, moonroof, alloy wheels, and cruise control. Next, look for specific vehicles in your price range that have the options that you want and need and determine which will be the most affordable and that you like the most. Remember to look at the total cost to own the car from the section above. Narrow it down to two or three cars that you are set on owning. Be an expert on what you want and do your due diligence. We prefer Honda’s, Toyota’s, Subaru’s and other import cars. We also deal with a handful of other makes and models if they have good ratings and we think they will be dependable for our clients. But bottom line, do your homework, select a specific model or two and start shopping for the best value!