How to Buy a Used Car. Buying a car is a huge decision for anyone. Be sure you make the right choice.

Transcription

1 How to Buy a Used Car Buying a car is a huge decision for anyone. Be sure you make the right choice.

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3 HOW TO BUY A USED CAR EDITED BY: REBECCA ROBERTS EDGAR CARRANZA JUAN OCHOA CHABREA OWENS JANNEK RANCHOD

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5 Table of Contents iii Table of Contents How to Use This Manual... v Chapter 1 Car Criteria... 1 Chapter 1: Car Criteria... 2 Chapter 2: Test Driving the Car... 7 Chapter 2: Test Driving the Car... 9 Chapter 3: Purchasing the Vehicle Chapter 3: Purchasing the Vehicle Section 1: Estimating the Cost of a Used Car Troubleshooting Index... 23

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7 How to Use This Book v HOW TO USE THIS MANUAL Everyone knows buying a car is a huge decision. Since there are so many bases to cover, it may be difficult to decide which vehicle is right for you. We hope that this manual will assist you in both assessing the criteria that fits your style and directing you through a step-by-step process on how to test drive and purchase a car. Feel free to jump from chapter to chapter and make notes in the margins. Use the index to look up key words quickly and refer to the Table of Contents for the chapter pages.

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9 CHAPTER 1 CAR CRITERIA SECTION 1: DETERMINING A BUDGET SECTION 2: CAR FUNCTION SECTION 3: OTHER CRITERIA

10 2 How to Buy a Used Car CHAPTER 1: CAR CRITERIA Section 1: Determining a Budget Before you consider anything in purchasing car you must determine your budget. Having a budget will allow you to find the best car for the amount of cash you have. Before you begin, ask yourself the following questions: o Will you pay for the car with cash or a loan? o What can you afford on monthly payments? o How much of your saved money can you spend on the vehicle? Staying within your budget is extremely important in making sure you don t overspend. Once you know your budget, you will have a narrowed range of cars to choose from. Section 2: Car Function What will you use the car for? This is an important question to ask yourself in choosing a vehicle. Answer the following questions to determine what style of vehicle is best for you. o Do you have children? o An SUV may be the way to go. o Do you have to commute a long way? o A coupe or sedan normally has lower gas mileage than a truck or sports car. o Do you care a lot about how the car looks?

11 Chapter 1 3 o You may be interested in a sports car. o Do you live in an area with a rough terrain? o A truck or jeep may be the best choice. Section 3: Other Criteria You need to take the following criteria into account when choosing a type of car. Design If you care a lot about what the car looks like, this is an important criterion to consider. Aspects of design could be spoilers, tinted windows, and the overall shape of the car. Horsepower Horsepower normally ranges from 125 to 200 but some high performance vehicles can have up to 400 horsepower. Since high horsepower normally increases the gas mileage, be sure to choose wisely. Determine the amount of work you want your vehicle to do and then determine the best amount of horsepower. Fuel Economy Fuel Economy is the amount of gas it takes to go a certain distance. For commuters, this is a very important criterion to evaluate. Paying for gas adds up after a while. Be sure you make your decision based on how much you will be going long distances in the car. Safety

12 4 How to Buy a Used Car The safety of the vehicle is very important to your decision especially if you have kids. Check the safety rating on the car you have in mind before buying the car. In the long run, you will be very glad that you did. Year The year range of your car is very important. Keep in mind, while newer cars tend to be more pricey, older cars are more likely to have more mileage and a higher risk for damages. An older model of a car may seem like a better decision but in the long run, you do not want to have to pay for extra maintenance of the car. Insurance It is a state law that you must carry auto insurance with any car. Models with more power and speed will have higher insurance rates and you should keep this in mind when determining about how much power you want in a car. After evaluating all of the above criteria, determine the make and model you would prefer for your car. Make refers to the company that makes the car and model refers to the different vehicles made by one company. Remember to think about all the things you want in a car when distinguishing between models and makes.

13 Chapter 1 5 Do research on the different vehicles you have selected to find common issues and look at reviews. Look at sites that estimate how much the vehicle should cost based on year, make, and model. Also, remember that the price on a used car is flexible especially from a private seller. Know exactly what you are willing to pay for the car before bargaining with the seller. If you still have several cars to choose from after evaluating the above criteria, you may want to consider the following things: Sound system Bluetooth Cruise control Automatic locks and windows Finally, look at different versions of the models. Some versions are fully loaded or come with the bigger engine for the extra power. Decide if these are important to you and whether or not it keeps you in budget.

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15 CHAPTER 2: TEST DRIVING THE CAR SECTION 1: BEFORE HEADING OUT SECTION 2: IN THE PARKED CAR SECTION 3: DRIVING THE CAR SECTION 4: AFTER THE DRIVE SECTION 5: QUESTIONS TO ASK THE DEALER

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17 Chapter 2 9 CHAPTER 2: TEST DRIVING THE CAR When test driving a car, it is important to remember that you are the customer. Do not let the seller dictate what you inspect during your test drive. The following chapter will help you determine if the car is best for you. Section 1: Before heading out 1. Determine where you will take the car you are test driving. That way, you don t have to worry about how to make it back. You can focus only on the car. 2. Be sure you have enough time to go on a thorough test drive. Ask for all the records of the car. This would include maintenance records and the owner s guide. Section 2: In the Parked Car 1. Walk around the outside of the car and be make note of any wear and tear on the vehicle. Be sure the tires are fully inflated and check the windshield for any cracks. 2. If the car has a trunk, open it and determine whether or not that will be enough storage space for your needs. A tape measure could really come in handy here. 3. As you get in the car notice how it smells. Inspect the inside of the car for any stains or tears in the seats

18 10 How to Buy a Used Car 4. Make sure the car is comfortable for you. Try getting in and out of it a few times and adjust the seats to make sure you can be comfortable. Play with all the controls and make sure they are all in working condition. 5. Turn the car on. Make sure it starts well and that the key will come out of the ignition easily. 6. Check the air conditioner and heating system. Test the air conditioner before the heat since it takes a while for the car to heat up. Make sure the vents can open and close easily. Section 3: Driving the Car 1. Be sure you drive in all kinds of areas. For example, some important places to test a car are: On gravel roads (See how the car responds to hitting bumps.) Getting on a highway (This is important to test the acceleration of the vehicle In parking lots (If a car is hard to control in the parking lot, it will definitely be hard to control anywhere else.) On steeper gradients (Be sure the car is able to make it up a hill without giving out.) Local street traffic (Make sure you can see all traffic signals from inside the car.)

19 Chapter Test the steering. Are there any delays in the response? Notice any extra play in the steering. 3. Test the brakes in a quiet area. Pick up some speed and then slam on the brakes. Notice if the car wants to turn left or right. Be sure the brake pedal has a firm feel. If it feels squishy, it needs to be checked out. 4. Test the alignment of the vehicle. When no other cars are around, take your hands off the wheel and see if it pulls to the left or right. This test reveals any front-end alignment issues. Hint! Keep your mouth shut while driving. If you keep the car silent the seller will be more likely to bring up any problems with the car. Silence also amplifies any rattles the car may have. Section 4: After the Drive 1. Ask the seller when you can bring the car to a mechanic. It is always best to get the car to a mechanic independently. 2. If you have any doubts whatsoever about the car, do not buy it. There are plenty of other cars to look at. 3. Before you leave, make all notes about the car to yourself. Include the date, kind of car, and asking price. Put all your notes down and rate it on a scale of 1 to 10. Section 5: Questions to Ask the Dealer 1. How many miles are on the odometer? This can help you determine the value of the vehicle. 2. Why are you selling the car? This will help you figure out how willing the seller is to sell the car, and whether or not they will be willing to negotiate the price

20 12 How to Buy a Used Car more. 3. Will it be okay if I get the car inspected independently? If they hesitate at all, let that serve as a warning. 4. Can I get a CarFax report before purchasing? Again, if the seller acts nervous when you ask this question, that is not a good sign. Any reputable dealer will give you a report without worries.

21 CHAPTER 3: PURCHASING THE VEHICLE SECTION1: ESTIMATING THE COST OF A USED CAR SECTION 2: YOUR BUDGET SECTION 3: NEGOTIATING A PRICE SECTION 4: PURCHASING THE VEHICLE SECTION 5: POST-PURCHASING

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23 Chapter 3 15 CHAPTER 3: PURCHASING THE VEHICLE Section 1: Estimating the Cost of a Used Car Other than the actual cost of the car, you will need to account for the tax the title processing fee the license plate fee You can ask for this general info and cost information from your local tax office, or authorized dealer. You should also include in the cost of the vehicle: any probable repairs maintenance inspections Section 2: Your Budget Now, you need to determine if you will be paying for all of the expenses mentioned above in cash that you have saved or if you will need to borrow money from a bank. If you have enough cash to pay for all of the expenses, then you can move on to the Price Negotiating section on page 17. If not, read the Bank Loan section below. Applying for a Bank Loan

24 16 How to Buy a Used Car Since you do not have enough money on-hand to cover all expenses of purchasing a vehicle, you will need to obtain a loan from the bank. However, banks will charge you interest for borrowing money from them. Depending on that rate, you could be spending thousands of dollars more than the amount you need to borrow. The interest will also increase the amount of your monthly payments. Before you apply for a loan, you need to identify whether or not you have enough money to pay for: the expenses of the vehicle outside the cost, tax, title and license of the vehicle a down payment for the vehicle Once you have done this, you will need to answer the following questions: Is your credit score sufficient to obtain the loan? How much money will you need to borrow from the bank to finance your vehicle? How much money can you afford to be spending on monthly payments towards the loan? How long will you be able to make the payments? There are two ways to get a bank loan Option 1: Go to a bank, ask for a car loan (including all cost mentioned in the estimating the Cost of a Used Car section), and apply for a loan

25 Chapter 3 17 Note: Some banks offer better interest rates than others, so shop around at different banks for the best rate. Option 2: Upon buying a vehicle, inform the seller you need a car loan and the dealer will assist you in obtaining a loan. Note: Dealers will usually only assist you in establishing a loan for the cost, tax, title, and license of the vehicle. Also, it is easier to control yourself at a bank than at a dealership when establishing your loan and monthly payments. Moreover, you could end up with a higher monthly payment than desired. Section 3: Negotiating a Price You shouldn t pay the advertised price of the vehicle because most dealers price their vehicles with the understanding that you will negotiate. By negotiating the cost, you could save thousands of dollars. If you have a vehicle you would like to trade-in for a discount or more cash to put towards the cost of the vehicle you re purchasing, you may also be able to negotiate the amount they re willing to give for it. However, the quoted price you re given is often not far from what they re willing to give, nor is it always negotiable. Section 4: Purchasing the Vehicle Purchasing from a Dealership When purchasing a used car from a dealership, it is recommended for you to bring your current driver s

26 18 How to Buy a Used Car license and automotive insurance policy. During the transaction, you will need to: pay for your vehicle in cash, or by a loan you have established through the dealership identify whether or not the vehicle is being sold as-is, with a warranty, and/or having agreed upon issues repaired sign some forms that will be given to indicate the sell and receipt of the vehicle ask for their policy on returning the vehicle in the case it needs to be returned Finally, you will need to determine whether or not you want the upgrades and additions the dealership will offer. Some of these include: Paint and rust protection Water damage protection Maintenance packages, such as oil changes Extended warranties such as Powertrain, Bumper-to-Bumper, etc. Congratulations on purchasing your vehicle! Now that you have purchased the vehicle, you may now skip to the Post-Purchasing section. Purchasing from a Private Dealer To purchase a vehicle from a private dealer, it is best for you to visit your local tax office and Department of Motor Vehicles (DMV), or their websites, for information, documents, and forms needed for a good transaction. For Dallas County, these are the links to their websites:

27 Chapter 3 19 Section 5: Post-Purchasing taxofficehome.html At these websites, you will be able to estimate the tax, title, and license fees. You will also find forms to: Transfer the title Identify that the vehicle is now in your possession Be able to temporarily operate the vehicle without a license plate or registration, in the case the seller removes them Upon filling out these forms, you will need to pay the private dealer for the vehicle. Note: Pay for the vehicle in a traceable form such as a money order or cashier s check. Congratulations on purchasing your vehicle! Now that you have purchased your vehicle, notify your insurance agency to add the purchased vehicle and remove the previously owned vehicle, if any, to your policy. You have a limited amount of time to do this depending on where you reside, so it s best to do it as soon as possible. After you have purchased your vehicle, there are a few things you need to know or do. If you purchased your vehicle from a dealership, continue to the Dealership section on the following page. If you purchased your vehicle from a private dealer, continue to the Private Dealer section.

28 20 How to Buy a Used Car Dealership Vehicle Registrations and State Inspections are usually done at dealerships during the purchasing process. Dealerships will also file for transfer of title. This will be mailed to you once the vehicle has been paid in full. Your license plates will either be mailed to you or you will need to pick them up at the dealership at a later date. In the meantime, you ll be driving your vehicle with a temporary plate that the dealership issues. Now enjoy your vehicle! Private Dealer With the forms that were filled out during the purchasing process, you now need to go to your local tax office to: register the vehicle transfer the title in to your name purchase license plates pay the tax on the purchase price of the vehicle Finally, with the money that you have set aside, you should take your car to an auto mechanics shop to: 1. have an in-depth inspection of all areas of the vehicle performed 2. have all necessary repairs completed, if any 3. have a State Inspection done on the vehicle Now enjoy your vehicle!

29 Chapter 3 21 TROUBLESHOOTING Here are some solutions to a list of potential problems you may run into. 1. If you find something wrong with your car after purchasing it, unfortunately, there is nothing you can do. This is why it is so important to thoroughly inspect the vehicle before paying for it. You can always inquire to the seller about the problem but the chances for any financial compensation are little to none. 2. If the seller will not negotiate the price at all chances are, they are not under immense pressure to sell the car. However, here are some negotiating tricks to try. First, never appear desperate. Give the impression that you could walk away from the table at any moment. Next, don t negotiate against yourself. Do not raise your bid until they have made a counteroffer. Last, raise your offer in small increments of $100 to $200 dollars. 3. If you find out you will not be able to pay for the monthly payments as you had planned immediately contact your lender. They have incentive to keep you as a customer so they will do whatever they can to make this easier for you. 4. If the seller fails to give you any records this should send up a warning flag. A seller that has something to hide is not one you want to buy from. Proceed with caution! 5. If there are not any cars for sale in your area that fit your criteria, widen your search to a greater distance away from you. Even though it may end up being a bit of a drive, it will be worth it to get the car that has everything you want.

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31 Index 23 INDEX air conditioner, 10 Bank Loan, 15 Bluetooth, 4 budget, 2, 5 CarFax report, 11 commute, 2 credit score, 16 Cruise control, 4 delays, 10 Department of Motor Vehicles, 18 Design, 3 Fuel Economy, 3 heating system, 10 Horsepower, 3 ignition, 9 insurance agency, 19 interest, 15, 16 license plate fee, 15 maintenance records, 9 mechanic, 11 Negotiating, 13, 15, 17 Private Dealer, 18, 19, 20 rough terrain, 2 Safety, 3 Sound system, 4 State Inspections, 19 SUV, 2 title processing fee, 15 Vehicle Registrations, 19 Water damage, 18 inspections, 15 Insurance, 4