20 Steps To Successful Car Buying

20 Steps To Successful Car Buying
 Article Index:

As with all decision-making processes, preparation is key for getting good results. In the automobile business, knowledge is power. Our 20 Step plan helps you, the consumer, navigate the tricky waters of the automotive marketplace. With the exception of Step 12, "Mechanic's Inspection," you'll use the same process whether the car you want is new or used. 

Step 1: The Buying Process

The Buying Process - You've decided to buy a car. What's involved? First, ask yourself these questions:

  • Are you afraid of getting a bad deal at a car dealer?
  • Would you feel more confident making straight cash deal?
  • Could you negotiate better if you knew the dealer's cost of the vehicle?
  • Is there a catch to those extra-low dealer rates?

Step 2: Which Car Do I Want? What Car Do I Need?

Which Car Do I Want? What Car Do I Need? - What does your vehicle need to do for you? What are the available choices and options? The first step in the car buying process is finding the right car. Do you want a sofa on wheels, an economical compact car, or a high performance powerhouse? Your family's safety in an accident is an important point to consider when purchasing a new vehicle. We review the various types of car, truck and hybrid; safety features; front-wheel versus rear-wheel versus all-wheel drive; stick versus automatic transmission; optional equipment; and other considerations. Here's where you begin to sort through the huge variety of automobiles available, narrowing the choice down to a few categories.

Step 3: How Much Can I Afford?

The down payment and the monthly installment aren't the only costs of owning an automobile. To see what money you can realistically afford to put into your car, make a budget early in your car-buying quest. If you need to finance, use a payment calculator to see how changes in rate, purchase price, term, and down payment can reduce your loan payments. Get beyond the price of the car in your discussion of the financing. Be sure to make sure they and their budget fully understand such items as insurance, gas, maintenance… and those times when things break that aren’t planned for.

Step 4: Using Internet Resources

Valuable shopping advice and price information online helps you refine your choices further. You become an expert on the cars on your list: what options they come with, what they go for in your area. Two thirds of people now use the internet to help them with their car needs before they buy that car. It is getting to be very helpful and something that can really cut down your time in the showroom. Government websites can alert you to any possible fraud, and what to watch out for. A significant aspect of business-to-consumer communication and customer satisfaction in online retailing is the e-mail connection. Whether a business is selling one product or hundreds, there are customizable e-commerce packages available to provide the full range of automated customer communications. People can identify and support resources such as texts, journals, electronic materials and other sources necessary to expand the information base essential for sound, balanced analysis and decision-making to choose his own vehicle.

Step 5: New or Used?

Although new car prices average $25,500, it's easy to find a like-new car for substantially less money. Why buy new? The benefits and drawbacks of both new and used vehicles. If you choose to buy used car, it is more important than ever for you to run an Auto Check Vehicle History Report on every used car you look at, because you can't afford to be stuck with a previously flooded or totaled vehicle. AutoCheck Score determines: age, autoCheck assurance, mileage status, Vehicle class, no. of owners, leasing history, emission testing history, accident history, theft and repossession history, Police, taxi or government use will be analyzed and summary information of that vehicle including problem, odometer rollback/rollover detection and warned you to make a right decision. You should always compare the vehicle with the score range to get a relative comparison.

Step 6: Financing Options

To get a good deal, get the financing first. How? Loans and leases involve renting money. Web-based lenders such as Car.com provide more options for internet-savvy loan shoppers. What's your best option?

In the car business, the term financing is loosely used to mean that the dealership will either provide you with an auto loan to buy the car or lease the car to you. The opposite of "financing a car" would be buying it outright with one cash payment. You can now finance a car that you purchased at the auction. These types of agent will be negotiated agreements with your vendors to be able to provide planning on financing your vehicle. You are likely to be approved for regular dealer financing even if a bank turns you down. Watch out for early payoff penalties, forfeit benefits, such as cash discount, rebates, or free scheduled maintenance programs. Always talk total price, not monthly payment. How you pay for your car will also determine how much you end up paying for it. Consider how much you can comfortably afford, what kind of terms you prefer on auto loans, and whether a car lease makes sense for you.

Step 7: Leasing Explained

Leasing is a good idea for businesses, salespeople, or people who can deduct the payments on their taxes. Leasing offers lower payments than conventional financing. We explain why, and explore what you get - and lose - in return.

Leases and purchase loans are simply two different methods of automobile financing. One finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks. When you lease a car, you’re entering into a contract. That gives you certain responsibilities to take care of the car and return it in a certain condition. Different lease companies set different conditions. Read through it carefully. Check to make sure the mileage is appropriate for this point in the lease. Keep the car at a condition above and beyond "average wear and tear" to avoid penalties. The monthly payment for a 3 year lease may be about the same as the monthly payment for a 5 year loan. Don't be confused - after a lease ends, you need to lease or buy another vehicle.

There's also lease purchase, under which the lessee owns the vehicle after all payments, including the option to purchase payment at the end, are made. Unless you have a maintenance agreement on your lease, you'll need to arrange and pay for this yourself. Obtain insurance on the car, and (depending on the type of lease) keeping up the road fund tax.

Step 8: Locating a Good Vehicle

To be a smart car-buyer you need to comparison-shop. There are hundreds of places to look for new and used vehicles: here's where to find them.

Call the seller and verify the pertinent information and consider all cars in the class you have chosen. Get the VIN. Run a Carfax report on the car. Compare your vehicles by fuel economy (such as gasoline or diesel powered), manufacturer or vehicle class (sedan, van), models, fuel economy, emissions, safety ratings, miles per gallon, manual or automatic transmission, four or two wheel drive, cargo-carrying capacity, suitable in your garage/ parking area, warranty, "gas saving" claims, service contracts, environmental impact, inspect thoroughly by an independent mechanic for used vehicles and more peruse the local online classifieds to see how close asking prices for cars like yours are to actual book values. You have the final say. It is your cash.

Step 9: Dealing With Dealers

For a hands-on look at your choices, it's time to visit the car lots. How to choose a dealership and handle the salespeople. Dealer slang defined.

The people at the dealership, nice and smiling though they may be, simply have a different objective in the car transaction than you do. Their goal always is to maximize profits. If you can find a vehicle that’s been on the lot for three months, you may be able to get a sizable discount because it is eating into the dealer’s profit. The most common tactical mistake that consumers make is to remain calm in the face of a proposal. Before you sign any contract, or commit to any financial arrangement, it’s very important that you know your rights. Never say “yes” to the first proposal/ visit; it will almost never be the best offer.

Most makers sometimes authorizes repairs after the warranty is over; check if it is covered by a Federally mandated warranty and owner's manual for details and get a printed copy of the warranty to the dealer, maybe they will match the price. Don't buy extended auto warranties by price alone, avoid cheapie auto warranties! Get a free online auto warranty quote BEFORE you go to a car dealer to compare, not after.

Whether you are considering buying from a used or new car dealer, check out the dealer's reputation and reliability first. Call the Better Business Bureau for a reliability report (Contact and location information on all BBBs in the U.S. and Canada is located at main website at www.bbb.org under "Locate a BBB"). Ask the dealer how you may contact the car’s previous owner.

You should also get some car insurance quotes. Car insurance adds costs. You will have to pay, so get some quotes from as many companies as you can and compare them. Make sure you check out their credentials including licensing, laws for your protection, how long they've been around and whether they are recommended by trusted institutions.

Step 10: Taking the Test Drive

The test drive (Step 10) comes WAY before any negotiations on price (Step 17). You're here to experience for yourself how different makes and models handle and perform.

Always test drive the vehicle before you start talking. There's no point in haggling if you find out you don't want the car after all. Start the car - preferably when the engine is cold. It should start straight away with white, steam-like smoke - if it takes too long and excessive noise, mushy brakes, sounds during acceleration, rattles or abnormal sound inside or outside, steering wheel pulling to one sided it could be trouble.

Don’t forget to check for both the interior and exterior such as engine light air conditioner, heater, radio, CD player, radiator coolant, tires, seat adjust-ability. Look for ripples, waves, welding spots on the frame, poorly fitted panels and mismatched colors, all of which may indicate that body work may have been done. If you are not pleased or confused check step 12.  Mechanic look over the car to confirm the problems and advise you on the seriousness and cost of repairs. The driveway or garage floor will tell the truth even if the seller doesn't.

If you feel pleased after test-driving this salesperson, it's time to take the plunge. Call him and say, "I appreciate the time you took to show me the car and let me test-drive it." It is recommended to check the title of ownership carefully before you make the payment and also have the previous owner sign it over to you.

Step 11: Final Vehicle Selection

Narrow down the choices and figure out a reasonable price. After careful consideration, one vehicle will emerge victorious, and you'll be able to start your final pricing research.

You should have driven all the vehicles that you were interested in.

If you fall in love with a car, be sure not to overreact and get too anxious. Give yourself some time to sit back and make sure it's the car for you." In short, don't let your heart rule your head - it can lead to aching in both body parts. No one would buy a car without a look under the hood. Most mechanical parts are priced comparably to those for a Lexus or a Mercedes. A few are very expensive. Soft trim prices tend to be very high.

Consider buying a manual transmission vehicle. If driven properly it is more fuel efficient than automatic transmission. If you choose automatic, the more gears the car has, the more fuel efficient it will be.

Consider various models to determine a car's safety features (such as -  side air bags for drivers and passengers, child safety seats, anti-lock brakes, traction control, outward visibility, blind spots etc.), most reliable, how many passengers will be riding in the vehicle, kind of driving you do, maintenance costs, compiled information about repairs that are likely with particular models.

Information is also available on the number of complaints filed about particular cars and otherwise suitable to your needs. Choose a car that holds value well. Leasing can put you into a wildly luxurious car, but it's not always a deal if it's prone to steep depreciation. Generally, it's best to choose the trim level that includes most or all of the features you desire, instead of equipping the base model with individual options. Think twice about adding expensive extras you probably don't need to your purchase, for example, credit insurance, service contracts or rust proofing.

You can also read up on the latest car reviews by browsing the Web as there is literally a wealth of pertinent information available online. Dont buy such a car even if the price seems to be very cheap. Usually used car like this needs a lot more repairs than it may seem at the first look.

Pricing a used vehicle is a critical issue that you may face. You can also read up on the latest car reviews by browsing the Web as there is literally a wealth of pertinent information available online. We've included a link to the NADA Guide and official kelley blue book which may assist you in finding your proper price to select newer and used vehicle.

Step 12: Mechanic's Inspection

If a previously-enjoyed vehicle makes your final cut, don't make a $10,000 mistake! A thorough mechanic's inspection and an Expiring Auto Check Report (highly recommended) are your best protection against buying a used car with costly, hidden problems. All certified new vehicles are inspected by a manufacturer-trained mechanic and come with extended warranties that are backed by the manufacturer.

Before you go, ask for maintenance receipts and documents. A person who has a good set of records usually has given the car regular maintenance, and that means it's probably a better car all around. You can expect to pay about $100 for the mechanic's efforts, but its well worth it.

Choose a reliable repair shop recommended to you by family or friends or an independent consumer rating organization. Mechanic look over the car to confirm the problems and advise you on the seriousness and cost of repairs. The driveway or garage floor will tell the truth even if the seller doesn't. You should ask the mechanic to check brake check, engine test, charging system, cooling system, emission level, other inside and outside.

If the car passes your mechanic’s inspection, make an offer. Consider making low-cost repairs on things like dents, dings and scrapes, as well as small mechanical problems, rather than selling the car "as is." You can use the cost estimates of repairs supplied by your mechanic to help negotiations.

Step 13: Warranties Explained

Unless you're t prepared to pay for the very best policies from the highest rated companies like Warranty Direct, we find them more trouble than they're worth.

Manufacturer-approved used-car schemes and many smaller garages also offer some form of warranty scheme on used cars.
Whether you own a new or older make/model, an extended auto warranty will provide you with peace-of-mind protection regarding costly mechanical repairs that can happen at any time during the life of your vehicle.

Buying an extended auto warranty today will allow you to avoid paying higher rates later due to price increases and required surcharges due to the multitude of issues that develop as the vehicles flaws become public knowledge. You'll be able to immediately take advantage of your plan's benefits: towing, lost key/lockout, and car rental discounts.

An extended warranty as a risk-management tool that ensures that repairs to your vehicle are performed when they are needed. All our warranties are transferable so your vehicle will be worth more when you sell it. This careful approach is a good thing for new car owners also. A typical new car comes with a manufacturer’s warranty offering coverage for three years or 36,000 miles, or four years or 50,000 miles.

An extended auto warranty offers Factory Like Coverage for Newer and Used vehicles (as well as most other vehicles). The companies represent are A, A+ and A++ rated by AM Best, and re- insured by some of the largest insurance carriers in the world. If a car is about to exceed a dealership’s warranty, the dealership will more than likely not extend it; however a third party warranty vendor will find out how extended warranties through national providers can save you $$ while offering the same coverage as dealer warranties which typically entitle you to a new car if yours is lost, stolen, or goes kaput- but remember that these almost always have a hidden price, as you may have to pay more in the long run than you would if you shopped around.

The sales contract also must include other specific information about your warranty. Warranty service is provided without requiring that you return a warranty registration card.

Step 14: Shopping for Insurance

Don't sign anything until you find out what your insurance costs will be. Before you buy, get a quote on the car you want from an online insurance broker who represents many different firms like Insweb.com and Netquote.com. The difference in premiums between insurance companies can be staggering!

Liability coverage is the foundation of any auto insurance policy, and is required in most states. Almost every state government requires that car owners have car insurance. It provides evidence that you have the financial resources to pay a judgment against you if you should injure another person or protects unlucky people that are the victims of accidents. Insurance helps you live up to that responsibility by ensuring your ability to cover the costs of potential damages or injuries.

Gap (Guaranteed Asset Protection) insurance is good to have. Gap insurance could be the difference between getting all your money back and owing the bank money for a car you don't have anymore. Yet it is only good as long as your insurance company values it more than what you owe for it. That's why it’s better to buy Gap insurance on a newer car rather than an older car, and it's essential if you've carried over negative equity from your prior loan.

Choose the right insurance company. There are several internet sources to compare companies B www.jdpower.com or the State Division of Insurance http://www.dora.state.co.us/insurance/. Check your credit-card coverage. Many credit cards now offer some level of collision and theft protection. The NAIC recommends calling your credit-card provider to determine your level of coverage.

New vehicle replacement if your car is written off and is less than two years old (or less than 30,000km) or 3 years (or less than 50,000km) including registration, stamp duty and dealer charges. Buy direct from an insurer. Tell your insurer about any pre-existing medical conditions you have or this will affect a claim relating to a condition.

Step 15: Disposing of the Old Car

Remember the car is going down in value everyday. Whether you decide to trade-in or sell your car, you should always clean it thoroughly before prospective buyers or wholesalers see it. Receive "wholesale" dollars for vehicles rather than "retail" dollars when trading-in. You could list on AutoTrader or other online and print auto magazines. A good price on the right new vehicle plus the right financing is nice, but the old car is an important part of the equation as well.

Dispose of a car battery at the auto repair store. This is the same thing as a service station where you fill up your gas or get an oil change. Consider disposing of your car and certainly your second car if you have one.

Step 16: Buying on the Internet

Discount internet buying services like Cars.com, CarsDirect.com, Edmunds.com, and whatcar.com (all recommended) are great for busy people and for cost-conscious consumers who dread typical dealer negotiating or are fearful of being ripped off.

It forces dealers to slice profit because they must beg for your business. It allows consumers to comparison shop loans and leases, as well as extended warranties and insurance. You will be able to view the course online as many times as you like. Used car wholesale and retail prices are available through the official kelley blue book and the NADA Used Car Pricing Guide.

Some websites will help you to get a "vehicle price quote" for each type of vehicle you like best that make your shopping and buying new car easier and hassle free even low price in touch with a local dealer. Moreover its fast, free and with no obligation to buy or sell. Surely helps to build confidence, and getting a fair deal on your car is a lot easier when you are well informed.

If you live in an area without a lot of dealerships, you may get a quote from dealers in nearby towns. Even if you are not willing to make the drive, do not throw out this quote. Quotes from out of town are often the most competitive since the salesman knows it will take a great price to motivate you to drive 40 or 50 miles to do business. Consumer Reports also has used-car price reports available for $12.

Step 17: Final Dealer Negotiations

Don't expect a holdback discount on every vehicle.  If a car has been sitting on the lot for 90 days or more, all of the potential holdback profits have been wasted on interest payments that the dealer makes to floor plan (finance) the vehicle. After 90 days, the dealership has to dip into its own profits to keep the car in inventory.

If the car's just arrived, the dealer gets to keep all of the holdback as instant profit. At 45 days he gets to keep 50% of it.  Since most dealers rotate their inventory in less than 90 days, they usually get to keep some of the holdback payment. Because the price is a factor in the dealer’s calculations regardless of whether you pay cash or finance your car - and also affects your monthly payments - negotiating the price can save you money.

Make sure the price you agree to pay includes the options you choose, taxes, licensing, and registration fees only. Tell the salesperson that you will back out of the deal if he or she adds hidden fees to this price. Note that the contract is typically not legally binding, so you can still abandon the deal if necessary. You'll get a worse deal if you want a low-supply, high-demand vehicle, or you're inflexible regarding make, model, trim level, color and equipment.

The foundation of successful negotiation is information. This is particularly true when buying a used car. And yet, the condition of used cars means prices will vary widely. Many used cars on new car lots come from vehicles that were traded in. In order to sell someone a new car, the dealer gave them credit for their used car as a trade-in. They will not reap the benefit of this arrangement until they turn the used car into cash. This is where you come along. Whoever you're selling it to, determine your car's value with Kelley Blue Book listings.

If you can come to a mutual understanding, congratulations! If not, don't beat a dead horse. You should like to back-out by thanking the seller for their time, leaving a copy of the inspection report as a "gift" and telling them my final price, should they reconsider.

Step 18: Taking Delivery of the Vehicle

Inspect the car before you hand over any money or complete any paperwork. If buying used, check that everything works correctly. If buying from a dealer, make sure any accessories have been fitted to the car as requested. Once you sign the papers and leave the lot, though, the car and its problems are yours (at least until a lemon law kicks in). On Delivery of your Car you will be asked to sign a Delivery Acceptance Note. Please note that after signing this note you will be deemed to have accepted the Car in the condition it arrives.

To avoid having this happen with any car you buy, be sure to drive the actual car (not just one like it) before you sign the papers. Be aware that neither you nor the dealer can sign away your warranty rights. A vehicle purchased from a motor vehicle dealer has clear title. This means you are protected against another party claiming a financial interest in the vehicle. The seller will sign the back, indicate the mileage, and the amount they sold the car to you for. Be sure the seller has a valid driver license and that they are the owner of the car listed on the title.

After you buy a used car, you have to transfer ownership from the seller to yourself. The dealership, will file the necessary documents. You need to prove that you bought the car and are now the new legal owner. Be aware that neither you nor the dealer can sign away your warranty rights.

In some states, a vehicle inspection or emissions test is required when a vehicle is sold. Find out from the DMV who is responsible for paying for the test. A "pass" may be required to register the car. Remember to contact your insurance agent to start a policy on the vehicle. Proof of insurance may be required before you drive the car off the lot. Cash is dangerous to carry around. With a bank draft, you have a record that you paid the seller money. You may cancel the bank draft if you are not satisfied later. But you can't cancel cash. 

Step 19: Problems Down the Road

What if your purchase turns out to be a lemon?

If you feel that you have been sold a "lemon" or a bad car, you do have recourse. All states have "lemon laws" that pertain to new car purchases. These laws allow you to take action against a dealer for selling you a bad car. If you feel you have been cheated, find out what you can do about it. The CGA applies to sales of motor vehicles to consumers by traders (including unregistered motor vehicle traders), where the motor vehicles are of a kind ordinarily bought for personal or domestic purposes

The statutes providing for arbitration and repurchase of a lemon were written separately so your car may not qualify as a "lemon" but you may still be entitled to an arbitration hearing. These laws apply to the manufacturers and not to the dealers.

If 30 days have passed since your vehicle's delivery and you haven't received your registration or title ,even unsatisfied after talking to the dealer, contact your state's Department Of Motor Vehicles (DMV) and Attorney General's Office to see if they can be of assistance.

Used vehicles sold by the company’s stores are thoroughly inspected and guaranteed against frame and flood damage and title or odometer issues. Consumer safety advocates say they’re especially concerned that rebuilt cars that have been declared “total losses” by insurance companies are being resold without their troubled histories being revealed - a longstanding industry problem.

The Magnuson-Moss Warranty Act is a federal (lemon) law that protects buyers of products worth more than $25, as long as the products come with an express written warranty when the manufacturer or its agents fail to cure any nonconformity within the specified limits. (In other words, you need a specific written guarantee, not just your assumption -- however reasonable -- that the product will actually work as advertised.)

Step 20: Maintenance

Don't play chain-store roulette with your precious new possession. The dealer's service department or your independent mechanic can provide reliable service and spot problems before they turn into disasters, if you visit regularly.

Take care of minor problems as soon as you can, before they could cause something serious. Check your car's oil level, engine coolant, belts, and battery contacts when the engine is cold. Regular oil /transmission fluid, changes are very important to keep your engine in a good shape. Try to avoid hitting your tyres against kerbs, especially when parking. The principle is always the same - as little maintenance as possible and no more than necessary.

There is no one best way to buy your next vehicle. Assessing your needs and priorities is probably the most important consideration. Determine what future auto maintenance cost will or could be. Replace your current vehicle if your average yearly auto repair bills are more than ten percent of the price of the new car you would like. Technical Service Bulletins (TSB'S) are fixes to known problems that dealer service departments have alerted the vehicle manufacturer.

Evaluating Vehicle Emissions Inspection and Maintenance Programs assesses the effectiveness of these programs for reducing mobile source emissions. Preventing problems before they occur will keep both you and your vehicle happy. Make sure your vehicle is running properly by visiting an Approved Auto Repair Services facility. Also, get yourself a copy of your vehicle's auto repair manual.

As you browsed '20 Steps To Successful Car Buying' you may find interest in following articles . . .

Comments

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

This is the most comprhensive and detailed analysis I ever read by far. Thank you very much for the good work

Post new comment