Car Buying 101
Our best customer is an educated customer. It frustrates me when I see good people treated badly just because they needed a decent car or truck. Cutting through the hype and hysteria of the car buying experience is easy if you’ll take the time to do a little research and a little soul-searching before you step onto your first car lot.
Unless you’re collecting special interest vehicles, cars lose value every day you drive them. The absolute best way to minimize your car expense is to buy a quality vehicle and drive it as long as possible. If you were in the position of buying a new Mercedes Benz and driving it for 20 years and 300000 miles your cost of ownership would be insignificant compared to the average consumer. You could have further reduced your expense by buying a three-year-old Benz on which someone else had absorbed the big depreciation hit. Whether you’re talking domestic or import, most manufacturers are producing products which, when properly maintained, will provide years of reliable service.
First you need to evaluate your needs. How are you going to use your car? Is your situation going to change in the foreseeable future? Will your family expand? Is the vehicle you want going to handle mud and snow as well as current conditions? You wouldn’t believe how many people come to my lot with their three-month-old buggy and would like to trade because it doesn’t do what they wanted it to or worse because some salesman sold them the car he wanted them to have.
When you’ve decided on your car, do a little at home shopping. The newspaper classifieds are a good starting point, as you can get an idea of the price range at which your choice is being offered. Watch out for dealers who don’t list a price, it’ll be too high, the same goes for listings without mileage. The internet is the best place to window shop because of sites like autotrader.com and kbb.com. You can research both your purchase and your trade-in. Be thorough; look at suggested and actual retail values for the car you want to buy. Look at trade-in values for your car, making sure you evaluate its condition according to the website’s guidelines.
The worst mistake most buyers make is letting a dealer sell them a car they don't really need or want and burying them in payments with "easy" financing. If you are "upside down" in your vehicle, (owe more than it is worth), you are in no position to trade. Many dealers will be only too glad to help you dig a deeper hole financially and help you on your way to repossession or bankruptcy. Save your money, make your payments, get yourself into a positive equity position and then deal from a position of strength.
Another terrible way to waste money is leasing. It satisfies the need for instant gratification but you'll pay much more than you should and have nothing to show for it at the end of your lease. I like radio talk show host Dave Ramsey's term "fleecing". And guess who'll be getting shorn. Hint, it ain't the new car dealer.
OK, you've decided on a car and you're in a financial position to buy. Now it’s time to find an honest dealer who’ll treat you fairly. Ask your friends, family, and co-workers; often times they’ll have good information to help you on your way. If you’re responding to an ad at an unknown dealer, you should be wary. Did they give you the price of the vehicle you want or ask if you had a trade instead? Usually that means they have more than one price for that vehicle so they can show a larger trade-in value when necessary. Is the dealer willing to let you have your mechanic evaluate the car? Does he include a warranty? Has he been in business long?
Avoid dealers running snake-oil promotions where they give $1000’s for any junk you can get to the lot. They obviously have priced their cars high enough to cover that allowance. How about a repo sale? Do you suppose the former owner was spending money on routine maintenance when he couldn’t make the payments? All those too-good-to-be-true prices and promises follow the cliché and don’t deliver the great deal they made you think you were going to get. Find a dealer who’ll treat you with respect and honesty instead of trying to process you at the car factory.
Do the math. Look at the numbers. If dealer A has a Ford for $8000 and gives you $2000 for your trade and dealer B has a very similar Ford priced at $10000 and gives you $3000 for your trade where will you get the best deal? I’ve had many prospective customers try to convince me it’s dealer B How about 0% financing, look at the difference between buying a new car at 0% or a three-year-old model with bank financing at a reasonable rate. The steepest part of the depreciation curve for any new vehicle is the first 36 months. Why be the person who suffers that financial hit?
Don't buy a used car from a new car dealer. Look at all the overhead he has to support. Who do you think is paying for that beautiful showroom and those full page newspaper ads? You aren't going to be driving either one. Don't believe in the "power of huge" overhead is overhead, the bigger the dealer the larger the overhead, the more you'll pay. If you're prepared to spend the next ten to fifteen years driving that new Camry go ahead and buy new, but if you're shopping used go to the specialists, not someone who's in the used car business because they have to dispose of trade-ins.
I can't respond to specific individual cases i.e. "I'm being offered $3745 for my 1919 Flivver, is that a good deal?" Without firsthand knowledge of your specifics the best I could do is a wild guess. However, if you see an ad or promotion that intrigues you and you'd like an opinion as to its legitimacy, drop me a line and I'll try to let you know what the real deal is. Chances are I've seen it before.
I hope you’ve found this helpful. If you’re within a convenient distance of Montrose, we’d welcome the opportunity to help you make your next car purchase. If not, I hope you’ll be a little savvier the next time you buy.
Happy Motoring!
Al Tilley Jr.
Email: atas@epix.net