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A Helpful Guide to Buying a New or Used Car

Buying a car is a major expense, so if you do buy one, you want to make sure that you get the best deal possible as otherwise you could end up spending a lot more money than you need to.

In this article, we are going to be looking at some of the most important things that you should know about when buying a new or used car. The purpose of this guide, however, is not only to save you money, but also, to reduce the risk of any purchase you make.

Car buying is something that can be fraught with a lot of danger, so if you can keep the following points in mind, you should find that the process of purchasing a car runs a lot more smoothly and trouble-free.

So let’s get started with the first thing you need to know about: the type of car that you would like to buy.

How to Decide What Car to Buy

The most basic decision that needs to be made when choosing a car to buy, is the type of vehicle that you require or would like to drive.

Some of the things that you should take into consideration are:

 1) Type of Automobile

sports car

Determining the basic type of vehicle you wish to purchase is the first step in buying a car.

There are many different categories of vehicles to choose from. For example, do you want a sports car? A family car? A van? Or do you want to go for a modern hybrid or electric vehicle?

Another consideration is the engine size. Do you want a vehicle with a large powerful engine? Or would you like something a bit more modest so that you can achieve better fuel economy?

To help you with this process, you may find it useful looking at car magazines, information provided by car manufacturers, TV programs that review cars (e.g., Top Gear) and also speaking with friends or relatives.

2) Cost

money

In addition to the initial cost of your purchase, you should also take into account additional costs such as maintenance, fuel and insurance.

Cost is a major factor in any purchase decision, especially when it comes to buying a new car.

Give yourself a rough ballpark figure as to how much you can realistically afford. Then, on top of that, add running costs such as car maintenance, gas and car insurance costs.

Be sure that you are looking at a price range you can afford, as otherwise you might not be able to afford to keep your car running after you have bought it!

3) Purpose

land rover

Different cars can serve different purposes. What do you want your car to do for you?

Cars can serve different purposes. They can be used for short or long haul journeys, they can be used to transport family members or they can be used as status symbols.

Think about what you want from a vehicle, as that is likely to play a great influence in the type of vehicle you ultimately purchase.

4) Ease of Finance

car loan application

Your credit rating can affect the likelihood of you being approved for a loan and how much that loan will cost you to repay.

Unless you have the money to purchase a vehicle outright, you will most likely need to take out a car loan. However, if you have a poor credit rating, you may be denied a loan or will have to pay a higher rate of interest than if you had a good credit rating.

If you are unsure of what your credit rating is, it’s worth taking the time to find out because there is no point in committing to a large long-term loan when it’s going to be set at a silly rate of interest.

5) Customization Options

car bluetooth

Added extras can make it easier for you to sell your vehicle at a later date.

All vehicles have certain options that are either included as standard or can be included for an additional cost.

These options are worth thinking about, because when it comes to selling your car, having things such as a CD/Mp3 player, satellite navigation (SAT NAV) and air conditioning can make it much easier to sell your vehicle later on.

6) Color

colored cars

We all have a favorite color, but some colors are easier to sell than others.

Color is a very unique preference choice, and as a result, cars are now coming in virtually every type of color that you can imagine.

Although the type of color you choose is ultimately up to you, bear in mind that the color of a car can affect how easy it will be for you to later sell. The most popular car colors are blue, red, black and silver.

7) New or Used?

bentley

New cars come at greater cost but carry less risk. Used cars come at lower cost but carry greater risk.

A new car will be considerably more expensive than a used car, but at the same time will have less risk associated with its purchase.

If you are buying a car to enhance the image that others have of you, then you will probably be looking at new cars. But if you just want something to get you from A to B, then a used car is probably your best option.

8) Freedom of Choice

toy car

You will have the most control over the type of car you drive by buying a new car.

You will experience the greatest freedom with your specifications if you buy a car new, as this will allow you to choose from different models with different optional extras.

If you a buy a car second-hand, however, you might not be able to get the exact specifications you want, as this will largely depend on whether such a vehicle is put up for sale.

When is the Best Time to Buy a Car?

Surprisingly, many people appear to be unaware of the fact that when you choose to buy a car can affect how much you end up paying for it.

So if you want to save money on your vehicle purchase, making your purchase at the right time could quite possibly be the easiest way for you to achieve this aim.

Some of the factors that can determine when you should buy a car, and thus how much you end up paying for it, are discussed below:

1) Your Level of Need

The golden rule when it comes to making any type of purchase, is to not buy when you are in desperate need of something.

Although this may seem counterintuitive, buying something when you desperately need it can lead to you having a lower price sensitivity.

This means that you will be willing to pay more for your purchase than if you were buying something which you didn’t so desperately want.

car wreck

The more desperately you need to buy something, the more you are likely to end up paying for it.

Price sensitivity can also be affected by the number of alternative options that you have. If you have fewer options to choose from for example, you are likely to pay more for you purchase than if you had more options to choose from.

You can therefore reduce the influence that these factors have on your price sensitivity, by taking your time before you purchase a car and by purchasing one that is not in sort supply or otherwise rare or unique.

2) Release of New Models

new car

When new car models are released they push down the price of the older models.

Car dealerships usually start displaying new models of cars for the upcoming year around August to November, and this is also the time that they start discounting their older models.

So if you can wait until around the end of the year before you make your purchase, you could very easily save yourself a significant amount of money.

However, be sure to ask dealerships when they release new models, as this is something that will vary between different dealerships.

3) Your Schedule

coffee cup

Make sure you leave plenty of time to make your purchase, as otherwise you could end up paying more than you should.

Buying a new or used car is not like going to the grocery store and picking something up in five minutes. In order to get the best deal, you need a lot of time to examine the different models available and then to negotiate with the seller for the lowest possible price.

For this reason, it’s a good idea to purchase your car on a day in which you will have plenty of time free. As if you try to rush your purchase, you will probably end up spending a lot more money than you should have done.

4) Sales Targets

car saleswoman

Salespeople who must meet certain targets each month will be more willing to give you a discount if they are not meeting their targets.

Car dealerships usually offer their employees incentives for selling a certain number of cars each month. This is something that you can use to your advantage by visiting your local dealership towards the end of the month.

Providing the salesperson has not yet reached their target, you should be able to negotiate the price down lower and more easily than you otherwise would have done at the start of the month.

5) Promotional Offers

new car special offers

Look out for promotional offers as they are an easy way to snap up a bargain.

Occasionally, car companies and dealerships will offer discounts on their vehicles or run promotional sales. Although you can’t always predict exactly when these will happen, it’s worth keeping an eye out for them as they are a great way to easily save money.

In general, January, July, August and December are good months to look for car discounts, as that’s when offers are usually run to stimulate car sales.

You may also be able to save money by sending your old car in for scrappage or part exchanging it when you make a new purchase, so you might want to enquire about such offers at your local dealership.

6) New Registration Plates

registration plate

Unless you really must have the latest model, save yourself some money by getting the previous year’s registration.

Every year a new registration plate comes out for the latest models of cars, and as a result, the previous years’ models are often discounted as many people like to buy a new car.

Unless you absolutely must have the latest model, buy a car with the previous years’ registration as this is another way to easily save money on your purchase.

7) Weak Economy

economy sucks t-shirt

Car sales are often stimulated in a weak economy by dealerships and manufacturers offering discounts.

When the economy is down, people buy less. In order to stimulate sales and/or capture market share, manufacturers will often offer incentives or deals so that you buy their product. When the economy picks up, however, prices are likely to go back up due to increased consumer demand.

Where to Buy Used Cars

A used car is any type of vehicle that has had a previous owner and is therefore not considered to be new. You can buy a new car either from a private seller or a car dealership.

1) Private Sellers

Private sellers are car owners who have chosen to sell their car by themselves. Usually, you will find advertisements from private sellers in your local newspaper, car magazines or online.

buying car

Private sellers offer the potential for the lowest purchase price, but may come at an increased risk of something going wrong with your vehicle.

Buying a used car from a private seller can be advantageous, as you are more likely to secure a lower price. You might, for example, find some sellers who have mispriced or underestimated the value of their vehicle. Or you might find sellers who are in a rush to sell their vehicle, and so are willing to part with it for a very low price.

However, buying a used car from a private seller also carries certain risks with it. You may find a seller for example, who is not entirely honest about their vehicle and tries to sell you something which will eventually break down.

Also, you are unlikely to get a guarantee on your purchase as it will be sold on an “as is” basis. So if something does go wrong, it will be entirely your responsibility to sort it out.

2) Used Car Dealerships

Car dealership can come in two varieties; used car dealerships which specialize in used cars, and new car dealerships which sell both used and new cars.

The main advantage of buying a used car from a dealership, is that providing the dealership is reasonably well-known, you can be quite confident that the vehicle you purchase will be in good working order and has been accurately described.

used car dealership

A reputable used car dealership is a cost-effective and safe way to buy a car.

Also, because there are likely to be many other vehicles on display, buying from a dealership can also be a convenient way to look at many different cars from one location. This then increases the chance of you finding something that meets your exact needs and requirements.

If anything goes wrong with your vehicle after purchase, you will usually be given a limited warranty that will cover certain faults if they occur within a month of your purchase, or within a year if you take out an extended warranty.

For a longer warranty that extends up to three years, you may want to enquire about a certified pre-owned vehicle, although be aware that such vehicles will cost more than regular used cars.

Where to Buy New Cars

When it comes to buying a new car, most people tend to assume that there are only a few places where they can buy a new car. In reality, however, there are actually many different options available to choose from, and each has their own advantages and disadvantages.

Below are listed some of the places that you can buy a new car from:

1) Car Dealerships

car dealership

If you want a new car, don’t expect to get much of a discount from new car dealerships.

Car dealerships, also known as franchised dealers, are what most people tend to think of when it comes to buying a new car.

Dealers will provide you with a wide selection of models to choose from, and will also provide servicing and repair for your vehicle post purchase.

Dealerships tend to operate within strict targets, and unfortunately, this puts you in a weaker position when it comes to negotiating a lower price.

2) Auto Imports

auto import

Auto imports allow you to get a car that you might not be able to get in your home country, but this often comes at great added expense.

Importing a car from another country can be desirable if cars in your country are already very expensive, or if you want to purchase a car which you cannot obtain in your own country.

If you are importing a car for cost reasons, be sure to take into account the costs associated with importation, as these may not make the import seem so financially attractive.

3) Online

cars on laptop screen

Buying a car online makes it very easy to compare different vehicles and find the lowest possible price.

Just like most things nowadays, you can buy a car online. This can be a great way to view many different vehicles, and it also increases the chance of you finding something that matches your specific needs and requirements.

The disadvantage, however, is that you can’t physically inspect the car until you view it in person. This means that you can’t be certain the description of the car given by the seller is 100% accurate.

4) Car Supermarkets

car in trolley

As car supermarkets already offer very heavily discounted prices, the price you see is probably the price you will pay.

Car supermarkets are like a cut down version of car dealerships. They specialize in providing a wide variety of different types of cars at the lowest possible price.

Although car supermarkets can be a good way to get a low-cost car, don’t expect to negotiate the price down very much because the price you see is usually what you are expected to pay.

Buying Tips & Strategies

When buying a car, there are certain things you can do to ensure that you get the lowest price possible. Let’s have a look at a few of those things now.

1) Wear the Right Clothes

man wearing shorts and shirt

Salespeople can make a quick judgement as to how much you can afford by looking at the clothes you wear.

It is a simple fact of life that people tend to judge others by the way they look. When it comes to buying a car, you will also be judged on the way you look. This can either work in your advantage or work against you by hindering your ability to negotiate a lower price.

If, for example, you try to buy a car wearing expensive designer clothes or a nice looking suit, then you will probably be judged as someone who can afford to spend a bit more and so will be charged a bit more.

So save your best outfit for later, and wear something a bit more casual when you go to buy a car.

2) Be Prepared to Leave

woman walking away

Being prepared to walk away from a potential purchase increases your purchasing power, but sometimes this may backfire and leave you with nothing.

The key when it comes to negotiations, is never to let the seller know just how much you want something. The more interest you express in what they have, and the more desperate you seem to obtain it, the more power you give the seller to resist your efforts to negotiate the price down.

Always approach any type of sale with an attitude of leaving if you do not get what you want. Having such an attitude will put the power back in your favor, and will cause the seller to conform to your demands if they truly want to make the sale.

Be warned, however, that some sellers may also have the same attitude and so will let you walk away.

3) Take Your Time

wrist watch

Studies show that poor decisions are most often made when people feel rushed or under pressure. Tactics that are commonly used by salespeople.

Studies have shown that people tend to make poorer decisions when they are under pressure or rushed, because less time is spent thinking critically about the decision which is made.

When buying a car, salespeople know that if they can get you to make a decision on the spot, you will be much more likely to buy a car from them, there and then, than if you were to go home and think about it.

So if you want to save money and also make the right purchase decision, don’t let yourself be forced into buying a car without first having a “cooling off” to carefully consider your choice and any other alternative options available to you.

4) Be Careful of Extras

car extras

In comparison to the large cost of a car, small added extras can seem insignificant in cost. Often, however, these extras are vastly overpriced.

One way in which car salespeople make their money, is by selling you additional products or services for your car.

These extras tend to be great money makers, because in comparison to the cost of a car, small additional items seem relatively inexpensive. But in the large majority of cases, you will find that they are actually vastly overpriced.

So unless you really need the additional extras that are offered to you, it’s usually a safer bet to decline them and look elsewhere instead.

5) Know Your Prices

A seller’s job is to try to sell you their product for the highest possible price. As a buyer, your job is to buy their product for the lowest possible price. When it comes to buying a car, one of the best ways to do this is to find out how much the vehicle you are interested in is actually worth.

You can find out how much a dealership paid for a particular car by looking at car price consumer reports. The valuation that you get from such reports, can then be used to negotiate a lower price with the dealer.

consumer reports magazine

Consumer reports are an excellent way to determine how much room you have for negotiation.

Of course, nobody is going to sell you a car and not make a profit, so don’t expect to buy a car at trade prices. You can however, realistically expect to receive a discount somewhere in the region of 10-30% depending on your strength as a negotiator.

However, it’s worth noting that how much discount you can get largely depends on how popular a car is. If a car is very popular for example, then a dealer has little incentive to lower the price because buyers are plentiful. But if a car is not very popular, then the dealer will be more inclined to lower the price in order to stimulate sales.

You can therefore save money on a new vehicle buy purchasing a model for which there is currently not a high demand. The following two lists may help you in this regard:

Top 10 Bestselling Cars In Europe (2011)

1) Volkswagen Golf
2) Ford Fiesta / Volkswagen Polo
3) Ford Fiesta supermini
4) Ford Focus
5) Renault Clio
6) Vauxhall/Opel Astra
7) Vauxhall Corsa
8) Volkswagen Passat saloon and estate
9) Renault Megane
10) Peugeot 207 hatchback

Top 10 Bestselling Cars In North America (2011)

1) Toyota Camry
2) Toyota Corolla/Matrix
3) Ford Fusion
4) Honda Accord
5) Nissan Altima
6) Honda Civic
7) Chevrolet Malibu
8) Chevrolet Cruze/Cobalt
9) Chevrolet Impala
10) Hyundai Sonata

When you are buying a used car from a private dealer, a similar tactic can be employed by finding out how much other sellers are selling the same or a similar car for.

6) Give & Take

Negotiation is a game of give and take. In order to receive something from the other party, you will usually have to give something up.

tug of war

The things you don’t like about a car can be highlighted to pull the negotiation in your favor.

When buying a car, what you can “give up” are the things you don’t like about the car. For example, perhaps it doesn’t exactly match the specifications you were looking for? Perhaps it’s in a different color than what you wanted? Or perhaps the vehicle is damaged in some way?

The more that you can do to reduce the perceived value of a car, the more the seller will feel obligated to make up for those dislikes by lowering their price.

On the other hand, if you wildly exclaim that the car is perfect in every respect, the seller will have absolutely no reason to lower their price and every reason to keep it the same or even raise it!

What to Look For When Buying a Used Car

No matter how trustworthy a seller may appear to be, before you buy a used car, you should carry out a detailed inspection to ensure that the vehicle lives up to claims made by the seller.

To start with, ask the seller to tell you a little bit about the car such as its mileage, any faults that it has, and any other information which is relevant to your purchase. Any claims that are made about the car should be backed up with documentation if possible.

used car salesman

Not all used car salespeople are crooks trying to con you, but that doesn’t mean you shouldn’t verify everything you are told.

The next stage is to physically inspect the car for yourself, looking at both the exterior and interior of the vehicle. This is also a good opportunity to see if what the seller has told you matches up with what you find.

For example, if they described their vehicle as having only a few minor scratches but you also find deeper scratches in less visible regions, then you would be right to question the integrity of the seller and start to wonder what else they have failed to tell you about.

Some of the things that you should specifically be on the look out for when buying a used car are:

1) Odometer Reading

The odometer reading of a car tells you how many miles that car has been driven. The more a vehicle has been used, and therefore the more miles it has clocked, the greater the chance of that vehicle suffering from failure later on.

As a result, some sellers may try to illegally manipulate the odometer reading so that it shows fewer miles on the clock, as the lower the odometer reading is, the more they can charge for their vehicle.

odometer

The more miles a car has clocked the higher its risk of failure will be.

The average used car will have clocked around 15-20,000 miles. Anything substantially less than this should be approached with caution, as it could be a sign that the odometer has been tampered with.

Of course, some vehicles will have fewer than the average miles due to the owner not using their car very much, so a low odometer reading is not always a sign of fraud.

The most obvious signs of odometer fraud are a low odometer reading but with significant signs of wear on the seat, handles and steering wheel.

odometer fraud

Odometer fraud is the illegal manipulation of a car’s odometer reading.

New tires can also be a sign of odometer fraud, as if a car has around 20,000 miles on the clock, then it should still have its original tires. New tires could therefore be a signal that the car has driven more miles than what you are being told.

On mechanical odometers, look closely at the digits on the dashboard. If it has been tampered with, the numbers may not be straight or the dashboard may have finger marks or scratches indicating that someone has tried to access the odometer.

2) Vehicle History

Before you commit to purchasing a used vehicle, make sure that you are given the vehicle registration number and the vehicle identification number (VIN). With this information, you can then check the history of the vehicle to see if it matches up with what the seller is telling you.

However, you also want to be sure that the VIN number which you are given is in fact from the car that you wish to purchase. To confirm that you have been given the correct number, check to see if it matches up with the number on the car.

vehicle identification number

A vehicle identification number, or VIN number, allows you to determine the authenticity of a vehicle’s history.

The VIN number can be found on the vehicle registration card, on the bottom of the driver’s side windshield and on the manufacturer’s label, which, in most cases, will be on the driver side door.

You should check all three of these locations. If there are any signs that these numbers have been tampered with, or if you notice that some numbers are missing, the vehicle history associated with your VIN number may not accurately represent the history of the car that you are looking at.

VIN number

VIN number on driver’s side door.

To obtain a vehicle history report you will have to spend some money to get one, but it’s worth doing for your own peace of mind. Some sellers may even have a vehicle history report with them, so be sure to ask about this.

The information contained in a vehicle history report will tell you about any major damages the car has suffered from in the past, how many owners it has had, when the last owner received the car, the last official odometer reading and other important information that will help you to make an informed purchase.

3) Bodywork Tampering

It’s not uncommon for a car to be involved in an accident and then undergo subsequent repair to restore its previous condition.

scratch on car bodywork

Be suspicious of a seller who doesn’t disclose the full condition of their vehicle before you see it in person.

This isn’t necessarily a bad thing, as providing the car has been restored to working order and classified as roadworthy, you shouldn’t have any problems with it. But it is something that the seller should tell you about. Unsurprisingly though, not all sellers will disclose this information.

A quick way to tell if a car has undergone recent work is to look at the bodywork of the vehicle. For example, are there any inconsistencies in the paintwork? Or any irregularities in the body such as dents or bumps?

If you find evidence that the car has been worked on, but the seller did not tell you about it, then you may want to consider purchasing another vehicle because the seller could be omitting other important information from you.

4) Signs of Wear

Depending on the type of used car that you purchase, you can expect to come across differing amounts of wear. But this wear should have been described by the seller and so shouldn’t come as a surprise when you examine the car.

When looking at the external appearance of the car, pay particular attention to signs of wear such as dents in the body, scratches in the paintwork, overly worn tires/tire tread depth, the condition of the bonnet/hood/wing mirrors and oil leakages.

worn tires

Lincoln head test for tire tread depth. Bottom picture shows wear beyond the legally allowed limit.

A good way to spot oil leakages is to look at the ground directly beneath the vehicle. For example, if you are viewing the vehicle at the sellers’ place of residence, look for signs of oil leakage on their driveway or in their garage.

It is not unheard of for sellers to claim that their vehicle has not suffered from oil leakages, but then forget to clean up the evidence from the ground which they park their car on.

car oil leak

Although not all oil leaks will be as obvious as shown in the picture above, looking at the ground a car is normally parked on can be a quick way to spot if leaks have occurred in the past.

You can also check the condition of the paint around the keyhole. As most cars have central locking nowadays, scratches around the keyhole may indicate that the vehicle has problems with its electrics or has done a lot of miles.

Internal checks

Internally, the general state of the car should be noted such as signs of wear around the seats and driver area, in addition to making sure that everything is in working order such as lights, air conditioning and car stereo.

Once you’re in the driver’s seat, take a quick look at the seat bolster on the window side, and then compare the amount of wear that is present with the bolster nearest to the gear stick/handbrake for comparison.

Does the amount of wear you observe tally with the miles the vehicle has clocked? Or does there appear to be too much wear for such low mileage? What about the wear on the steering wheel or gear stick?

seat bolster wear

Wear on seat bolsters should tally with the age and mileage of a vehicle.

Be on the look out for any missing items within the vehicle, such as the parcel shelf in the boot, as those can be very expensive to replace. Also, if the boot/trunk carpet feels wet, then the boot seals may have failed and so will need to be replaced.

Finally, have a look at the ashtray as that will tell you if the previous owner was a smoker. If you find evidence to suggest that this was the case, carefully inspect the seats and carpets for cigarette burns.

But the best way to ensure that everything is in good working order, is to get the vehicle inspected by a car mechanic as this way you can be reasonably assured that you won’t suffer from any unexpected events later on.

5) Vehicle Operation

car on road

The best way to determine the condition of a car is by taking it out for a test drive to see how it handles on the road.

The final inspection of a vehicle comes when you take it out for a test drive. This is your chance to see how the car drives, whether you like driving it and whether there is anything obviously wrong with it.

During your test drive, try to test everything in the car at least once such as the windscreen wipers, car stereo, air conditioning, brakes and windows.

Also, be sure to drive the car for a long enough period, at least 30 minutes, so that you can make a proper assessment of how the vehicle handles on the road.

6) Sale

itemized bill

Just because you are buying a used car it doesn’t mean that you shouldn’t get the proper documentation.

In order to make your purchase official, you should receive an itemized bill of the sale and a title of ownership document which officially lists you as the car’s owner.

How to Buy Safely Online

The internet has forever changed the way that people buy things. Whereas in the past you had to physically go to a shop to buy something, now, you can do so within the comfort of your own home.

Today, you can now even buy cars online. Doing so can offer you many advantages, but unfortunately, but this comes at the expense of exposing you to a new variety of risks.

Advantages

One of the major advantages of buying a car online, is that you will have access to an enormous range of vehicles to choose from. This in turn increases the likelihood that you will find what you are looking for and be satisfied with your purchase.

couple shopping online

The Internet can be a useful way to find rare cars and generic cars at low prices.

If you are looking for a unique or rare car for example, then the internet is probably your best bet. As not only can you search on a local and national scale, but you can also carry out your search on a global scale.

Another major advantage of buying a car online, is that you can easily compare prices from different sellers and then snap up the best price. This, however, tends to be most applicable to people who want to purchase a generic car that is being sold by many sellers.

Disadvantages

Like buying anything else on the internet, the risks you face can be different to those you would normally experience when buying something at a traditional brick and mortar store.

car sale ebay

When buying a car online you can never be sure as to the exact condition of a vehicle unless you inspect it yourself.

The most obvious risk is that you can’t be certain that something has been described truthfully or accurately until you have seen it in person. There is also the risk that you might not receive what you paid for and so end up losing your money.

Another problem that can occur when buying things online, is that it can sometimes be difficult to communicate with the seller to ask them questions about the product you wish to buy.

Even though they may respond to you by email, or sometimes by phone, the fact that these forms of communication lack the body language signals which you would normally see in real life, can sometimes make it difficult to determine whether someone is being completely truthful with you.

How to stay safe when buying a car online

Thousands of people buy cars online every month across the globe, and although some do have a bad experience, the majority do not. Providing that you are careful and use some common sense, this is therefore not something that you should be overly concerned about.

Use the following tips to help you buy a car online safely and reduce the amount of risk that you are exposed to:

1) Be Weary of Very Low Prices

car cut in half

If an online price seems too good to be true, it probably is!

One of the most common scams when it comes to online auto sales, is offering a vehicle at a rock bottom price with a seemingly plausible reason as to why the price is so low.

Although in some cases the seller may have a genuine reason for selling at such a low price, in the large majority of cases, these are scams designed to lure people in who want to snap up a bargain.

As the old saying goes, if it’s too good to be true, then it probably is.

2) Make Sure the Car is Real

toy cars

Some online car sellers sell cars that don’t really exist.

Believe it not, some sellers on the internet will try to sell you a vehicle that does not actually exist.

If you find a vehicle that you are interested in buying, you should therefore request that the seller sends you the vehicle registration number and also the vehicle identification number.

Once you have this information, you will then be able check the vehicle’s history to determine whether it really exists or not.

3) Inspect the Vehicle Yourself

couple looking at car

Never pay for and buy a car online without first seeing it in person.

One thing that you definitely don’t want to do when buying a car online, is to assume that what the seller tells you is accurate and then pay for the car without physically seeing it for yourself.

Arrange a meeting with the seller so that you can examine the exterior and interior of the car. You may also want to have the vehicle inspected by a car mechanic, just to make sure that it’s in good working order and roadworthy.

If you like the car, and are thinking of buying it, be sure to take it out for a test drive. If the seller refuses, offer to pay for the petrol. If they still refuse, walk away.

4) Protect Your Identity

woman wearing mask using laptop

When buying online, keep the amount of personal information that you disclose to an absolute minimum.

Identify theft is another common scam that can occur when buying a car online, so be careful about what type of information you give out.

Things you should be protecting are financial information, your address, your social security number and anything else that is confidential or could be used against you.

5) Don’t Send Money Online

money transfer

Online payment requests are the most common type of fraud when buying a car on the Internet.

The most common time for a scam to occur is during the payment process. For example, the “seller” requests for money to be wired or for you to send a cheque to them.

You should never send money to someone who you have never met in person, nor give them any personal or financial information online.

The safest way to pay for a car that you have purchased online, is to meet with the seller and then pay them in cash once you have received legal ownership of the vehicle.

Taking Your Vehicle Out For a Test Drive

The only way you will know if a particular car is right for you, is by taking it for a test drive and getting a feel for how it handles on the road.

When you take a car out for a test drive, try to keep the following points in mind.

1) Your needs

Is there enough room in the back to carry the amount of passengers that you want? Is the boot big enough for you? Is your garage wide enough to accommodate your vehicle?

2) Comfortability

Do you feel comfortable sitting in the car? Is everything within easy reach? Are there any places that you could put small items, such as your cell phone or candy?

3) Test route

Choose a test route that reflects how you are likely to use your car, as this will give you the best feel for whether that car is suitable for your needs or not.

4) Manoeuvrability

If manoeuvrability is important to you, then make sure you try out reversing and turning.

5) Time on the road

Give yourself enough time on the road to determine how the car will behave under regular usage conditions. Aim to spend at least 30-60 minutes on the road so that you have enough time to identify the strengths and limitations of the vehicle.

car driving on dirt road

Always make sure that your vehicle meets the exact agreed upon specification before you drive it home.

After you have paid for your vehicle, you should give it a final check before driving off just to make sure that everything is in pristine condition. Look out for things such as scratches on the paintwork, dents in the bodywork, chips in the windows and stains on the seats.

If you bought a new car, then everything should also be as you specified such as the options you selected and the color you selected. Remember, you are buying a brand new car and that’s exactly the type of car you should be driving off the forecourt.

Unless your purchase was with a private seller, you can take your vehicle back to the dealer if any problems or faults develop within the first month after purchase.

If any serious faults occur during this period, you will have the option to reject the car and ask for a replacement or refund. But only if you do so within two weeks of the fault occurring.

Tips For Selling/Trading-In Your Old Car

Selling your old car can be an effective way to offset the cost of buying a new car. However, due to depreciation, you will get less for your old car than what you originally paid for it.

car for sale

Selling your old car can be an effective way to offset the cost of a new purchase.

When you are selling your car, you therefore want to make this depreciation effect as small as possible so that you can get the largest discount on your new purchase.

There are two main ways in which you can use your old car to offset the cost of your new car.

i) Private sale

Selling your car privately is the most common option that people choose when purchasing a new car. Selling privately allows you to get more money for your car, although it does put you at risk by exposing you to dishonest buyers who may try to con you.

Private sales can also be carried out via online car auctions. These place a limited amount of time in which your car must be sold, and can result in you receiving much more for your vehicle than you thought you would.

However, they can also result in you getting less, so auctions can sometimes be a bit of gamble.

ii) Trade in

The simplest way to use your old car to offset the cost of your new car, is to trade it in or do a part exchange at your dealership.

The main disadvantage of doing a trade in, is that you will tend to get less for your vehicle than if you had sold it privately.

If you want to sell or trade-in your old car to offset the cost of buying a new car, use the following tips and advice to help you get the most return on your old vehicle:

1) Clean & Tidy

If you are trading-in or selling your old car, you want to make sure that it looks as good as possible so that you can sell it for the highest price possible.

Give the car a thorough wash, and make sure that it’s clean inside and out. Use a vacuum cleaner to remove dirt from the seats and carpet, and clean the insides of the windows to remove any finger marks.

man cleaning car

Dealerships will be a lot more critical of the cleanliness of your car than private sellers.

If there are any small mechanical faults with your car, such as with the radio, electric windows or windscreen wipers, try to get those fixed too.

Generally speaking, used car dealerships will pay a lot more attention to how clean your car is than a private buyer would, and so the cleanliness of your vehicle is likely to affect how much a used car dealer is willing to pay in part exchange.

If you are a smoker, then expect to receive less for your vehicle sale (if you smoke inside it) from used car dealerships. But if you are selling privately to another smoker, then this shouldn’t be an issue.

woman smoking in car

If you smoke inside your car dealerships will pay less for that vehicle. But this may not be the case if you are selling privately to another smoker.

Unfortunately, removing smoke from car fabrics can be very difficult to do, especially if you have been smoking in your car for many years.

You may be able to lessen the smell of smoke somewhat by using a household vacuum cleaner/hoover on the seats and carpet, and then leaving the car doors or windows open for several hours to air out the inside.

The use of an air freshener or odor neutralizer can also be used, although this will only temporarily disguise the smell.

2) Seal the Deal First

If you want to trade in your vehicle at a dealership, don’t tell them that you are planning to trade in your car right away.

handshake

If you want to trade in your old car, don’t disclose that information until you have agreed a purchase price. This can help you to get a better deal overall.

First, find a car that you want to buy and then let the dealer make you an offer. After you have bargained down the price, tell the salesperson that you want to trade in your old car.

If you do it this way, the dealer can’t factor in the trade with the price of the new car. This means that overall you should get a much better deal on your new vehicle.

3) Find Out What the Dealer Paid

Before you make an offer on a car you like, it’s worth finding out how much the dealership actually paid for that car. This can usually be done by ordering a car price consumer report.

money car

If you know what a dealer paid for a particular vehicle, you will be in a much better position to know what sort of discount you could realistically obtain.

You will have to pay a small fee to receive the report, but the additional expense is well worth it because you will know how much the dealer paid for the vehicle plus the cost of each option.

One you have this information, decide which options you want, add them to the basic cost of the vehicle, and then use the number you come up with as your first offer to the dealer.

4) Determine Your Vehicle’s Value

Before trading in your automobile, use the National Automobile Dealers Association (NADA) guide to determine your vehicle’s current value. Then subtract that value from the cost of the car you would like to purchase.

money next to car

To prevent a dealer from underestimating the value of your vehicle, find out for yourself how much it’s actually worth.

Carrying out this step is a simple way to protect yourself from dealers who underestimate the value of your vehicle, thereby ensuring that you will get the maximum trade in value possible.

Note: How much your old car is worth has nothing to do with how much the new car you want to buy is worth. Some dealers may try to give you less for your old car by using this trick.

5) Secure Finance First

coins

Salespeople often use financing as a bargaining tool. You can therefore strengthen your position by obtaining financing before you make your purchase.

If you walk into a car dealership with pre-approved financing from your bank or credit union, this will prevent the salesperson from using financing as a bargaining tool.

6) Protect Yourself Against Future Claims

Once a deal has been made, the buyer should sign an agreement which includes the price of the car, the name of the buyer and seller and the date of sale.

auto agreement

Including the words “sold as seen” or “as is” can protect you from a buyer making future claims against you.

Your agreement should also include the words “sold as seen” or “as is”, as this will protect you from any future claims should the buyer have problems with the car later on.

Payment should be made in cash, as unless you know the person very well, it’s not a good idea to accept a cheque/check.

Financing Your Vehicle

Most car dealerships offer their customers financing to help pay for their new car.

But be aware these loans are usually at a higher rate of interest than what you would normally get from a bank. Furthermore, because the dealer is lending you money, they may also try to sell you a more expensive car.

So if you need to finance your car, a better way is to take out a loan from a bank or credit union. You will get lower interest rates, and also avoid the risk of being persuaded to take out more than you originally intended.

loan application approved

You can get financing from a dealership, but you are likely to pay much more for that loan than you would do had you obtained financing through a bank or credit union.

However, when it comes to car loans, make sure that you look around to find the best deals available, because even a few percent could make a significant difference to how much that loan is going to cost you overall.

Generally, you will find that credit unions offer the lowest interest rates, so if you can get one through a credit union, it will probably be in your best interest to do so.

Some of the things that you should take into consideration when getting a car loan are:

1) Installment Vs Interest Loan

Try to get an interest loan rather than an installment loan, as this means you will only have to pay interest on the remaining amount of your loan.

car on calculator

Interest based loans work out cheaper than installment based loans.

With an installment loan, you will have to keep paying interest on the full amount of your loan. For example, even if you have paid $6000 of a $12,000 loan, you will still be required to pay interest on the $12,000.

Of course, what option you choose to finance your vehicle will largely depend on your current financial situation. But if you are able to do so, it’s better to go for the option that will save you money in the long-term.

2) Money Down

money

The less money you need to borrow, the less you will end up paying back. So it’s a good idea to save up as much as you can before taking out a loan.

The more money you can put down on a car, the less money you will need to borrow. This means that less money will be spent on paying back that loan, and in some instances, you may also be able to get a lower interest rate on your loan.

So try to save up as much money as possible before making your purchase, as this will put you in a much stronger financial position later on.

3) Cash Rebate

A cash rebate is a set amount of money that you get back from the manufacturer for buying their vehicle.

This is an easy way to save money on your purchase, but don’t fall into the trap of buying a more expensive car that is outside of your budget just because it offers a rebate.

cash rebate

Some manufacturers offer cash rebates for purchasing their vehicle, but don’t let that trick you into buying something more expensive than you originally planned.

There are two things to bear in mind when it comes to cash rebates. The first, is that not all vehicle manufacturers offer rebates, and some will only offer them at certain times of the year on a promotional basis.

Secondly, different vehicle manufacturers are likely to offer different amounts of rebates. So if saving money is your primary concern, be sure to look around to see who is offering you the most back.

4) Short Term Loan

The less time it takes to repay a loan, the less that loan will cost you overall. So it can be desirable to take out a short-term loan.

calculator

Short term loans will cost you less to repay, but they also come with substantially increased risk.

If you take out a short-term loan, however, be certain that you can afford to do so as such loans will mean higher monthly repayments. If you are not able to make your repayments, you may end up losing whatever you used to secure your financing with.

For most people, a short-term loan tends to be quite risky. Yes, it can save you money, and if you’re on a good income, it may be the best option for you.

But if you have any doubts about being able to repay the monthly amounts, then you are probably better off going for a slightly longer term financing plan.

5) Early Repayment Option

If you can afford to do so, and your loan agreement allows you to, pay off your loan in full to save having to pay extra interest.

please pay here

Try to get a loan that gives you the option to repay early, as this could save you a small fortune should your financial situation improve.

If you think that you might be able to pay off your loan early, but aren’t entirely sure at this stage, speak to your lender about whether your agreement with them will allow you to repay early. If it does, you will always have the option to repay early, even if you never do.

Leasing a Vehicle

Leasing a car involves renting it for an extended period of time from someone else. You pay your money upfront, and the car is yours for the agreed upon length. When your lease has expired, you will have the option to buy the car or lease another one.

Some of the advantages of leasing a car include:

• Most leases don’t require you to make a down payment.

• You can drive more expensive cars than you can afford to buy.

• You can change the car you drive on a regular basis.

• You can easily get a car for a short period if needed.

• In the short-term, leasing a car is cheaper than buying a car.

• You may be able to offset the cost of the lease against your business.

• Lower monthly payments compared to repayments for a car loan.

• Lower start-up costs.

• Ideal option if you need a car but can’t afford to buy one.

Some of the disadvantages of leasing a car include:

• In the long run, leasing a car works out to be more expensive.

• You pay for something that you don’t own.

• You only have the car for the duration of your lease.

• Penalties can be imposed for exceeding set mileage limits.

• A lease does not cover insurance or maintenance costs.

• Your dealer may require you to pay for the cost of auctioning your car at the end of your lease.

There are two types of lease agreements that can be taken out:

Closed-end agreement

With a closed-end agreement you simply return the car back to the dealer at the end of your lease.

Open-end agreement

With an open-end agreement you have the option to buy the car at the end of your lease for its current value, or for a value that was estimated beforehand when you signed the lease.

In the latter case, if you find that the estimated cost given by the dealer is lower than what the car actually costs at the end of your lease, then it may be worth buying the car because you will be getting it at price below its market value.

If you decide to lease a vehicle, bear the following points in mind:

1) Get a closed-end agreement

Get a closed end-agreement, as this will allow you to return your car at the end of your lease with no obligation to buy it.

2) Maintenance costs

You will be responsible for maintenance on the car that you lease. So make sure you know what sort of condition the dealer expects the car to be returned in, as otherwise you will get fined for not meeting those conditions.

3) Inform your dealer of intended use

You will be fined for exceeding a certain amount of miles in your leased car. So if you plan on doing a lot of driving, be sure to tell the dealer about this beforehand so that you can negotiate a higher limit.

On the other hand, if you will not be using the car very much, ask the dealer if they can offer you a low mileage discount.

4) Be aware of the manufacturer’s warranty

The manufacturer’s warranty makes the manufacturer responsible for certain repairs and the condition of the car.

Make sure you know what this covers, as it could help you to avoid wasting money on repairs that the manufacturer would have done for free.

5) Length of lease

Sign the lease for as long as you need the car. This is for two reasons. First, getting a longer lease than you need is just a waste of money, and second, if you break a shorter lease you will get fined.

How Long Will Your Automobile Last?

Whilst it’s true that you can get many years use out of a car, on average, around 8 years or 15 for a well maintained vehicle, eventually, there will come a time when it begins to fail more and more often.

Taking it to the mechanic once or twice isn’t such a big deal, but if it becomes a regular occurrence, then you might be better off trading in your old car and getting a new one instead.

cars on road

The average lifespan for a well maintained vehicle is 8-15 years.

Unfortunately, you can’t predict exactly when you will need to trade in your car, which can make buying a new car difficult to factor into your budget.

However, there are some factors, which, if you are aware of, should allow you to gain a rough idea as to how long your car is likely to last.

Some of the factors that can affect the life expectancy of your car are:

1) Frequency of Maintenance

engine oil top up

Cars are machines and so they need to be well looked after in order to keep them running optimally.

Cars are machines and so they need to be maintained as otherwise they will break down. The more you look after your car, the longer it will last. So try to check it over at least once every month or every few months.

Some of the things that you should check for on a regular basis are: under inflated/worn tires, windscreen wipers tales, clogged air/fuel filters, oil leakages and coolant/brake fluid levels.

2) Local Climate

rusted truck

Vehicles in coastal regions are more susceptible to corrosion due to salt water vapor condensing on metalwork.

The climate you live in will affect the overall condition and lifespan of your car. For example, if you live in a wet area with salty air, such as by the coast, then you can expect your car to be more prone to rust, failure and have a shorter life.

When buying a car, it’s therefore best to purchase one from a dealer located away from coastal areas.

3) Automobile Accidents

automobile accident

The lifespan of your vehicle could be substantially reduced if you are ever involved in an accident.

Nobody plans to have an accident, but should one ever occur, your car could become damaged in a way that severely shortens its life.

This is most likely to happen if you didn’t realize that a particular part of your car was damaged. For this reason, you should always get your car thoroughly checked over by a mechanic after having an accident, before you set out on the road again.

4) Can You Fix It?

changing tire

Knowing how to maintain your vehicle can increase its lifespan and save you money.

People who have the ability to fix their own car are much more likely to keep it for longer than people who rely on others to fix problems for them. Learning how to fix basic automobile problems can therefore be well worth your time in the long run.

Most countries however, will require you by law to have your car serviced on a yearly basis by a mechanic (e.g., MOT, Smog Test). So unfortunately, you won’t be able to completely avoid maintenance expenses, no matter how good of an amateur mechanic you are!

5) Frequency of Use

two men driving car

The more you use your vehicle the higher its risk of failure will be.

The more you use your car, the more likely it is to fail. You can therefore extend the life of your car by using it only when absolutely necessary. When you don’t need to use your car, try walking, riding a bike or using public transportation instead.

Another tip is to arrange car pooling with your work colleges so that you can alternate who drives to work each day. This benefits everyone, as not only will your cars last longer, but you will also end up paying less for gas.

6) How Easily You Get Bored

bored man

The lifespan of a car can be very short if you get bored easily.

Some people like driving around in new cars, and as a result, quickly get bored with using the same car day in day out. Such people are likely to own many different cars throughout their life, never getting full use of the car they currently own.

If this applies to you, consider leasing a car rather than buying. This will allow you to drive a new model every few years and satisfy your desire for change.

7) Vehicle Manufacturer

Honda Accord

Honda Accord, consistently in the top 10 most reliable cars.

It’s a well-known fact that some makes of cars last longer than others. By purchasing a car which is known to be reliable, you can therefore minimize the risk of it breaking down and then having to spend money on repairs or a new car.

The 10 most reliable family cars in 2012 are:

1) Toyota Avalan
2) Honda Civic
3) Toyota Camry
4) Honda Accord
5) Volkswagen Passat
6) Mazda 6
7) Mazda 5
8) Subaru Legacy
9) Nissan Altima
10) Nissan Maxima

As you can see from the factors we have just listed, how long your car will last really depends on how well it’s looked after, your attitude towards the car and the make of the car.

If you look after your vehicle well and don’t really care about what type of car you drive, then you are likely to get many years of use.

But if you don’t take care of your car, and strongly desire to drive the latest models, then you are likely to spend a lot more money on cars throughout your life.

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