A lot of news sites are doing a lot to report about the current economic cycle and the poor quality of the economic environment around the world. In addition to housing loans and credit markets, cars loans are obviously the next large monetary groups and though we all know it’s going to be tougher to get credit to purchase a new car when our current model becomes inadequate due to life changing events (births, new jobs, death, etc.), you have an accident or you need a new ride because you just got a raise and want to upgrade. Below is an analysis of the number of ways you might be able to get a great deal on a car or at the very least, improve your chances on getting everything you want. Without further adieu…

Look at Last Year’s Models

Unless you’re getting a completely redesigned model, the only difference between a 2007 and a 2008 Ford F-150 is a different color option or two and maybe different features in the cold weather package, but it’s the same car built in the same factory by the same people. The engine and electronics are just as reliable and major recalls should already be fixed if the cars haven’t been purchased yet. Dealers have to move current inventory before they can add more cars. As such, they’ll want to cut their margin on these cars to get them moving and move in new, “more desirable” cars for those looking at the newest and best. Don’t be too picky and you might just get yourself a super deal.

Look for Incentives

Cash back and similar incentives are mostly gimicks to get you to purchase a new car. However, they are worth a look. Different dealers can offer different incentives for the same car. So, if you have a steady income to buy a new car but don’t have a large savings for a down payment, you might want to look for 0 money down incentives where as those who have been planning the purchase for a while might get money back off the total of the car. Some dealers like Chrysler and Suzuki had incentives dealing with gas locked in at a low price for the first year of car ownership, but with gas prices in rapid decline, these sorts of incentives are less impressive today.

Look at Used Cars

Just because you’ve always had new cars doesn’t mean you always have to have a new car. A car that’s 3-4 years old with low mileage will carry 90% of the reliability of a new car with with a majority of depreciation already worked into the price. Whereas some cars, like the Mini Cooper, see very little depreciation after a few years time, high volume models like the Civic, Corolla and

Look at Certified Pre-Owned Cars

Whereas a used car will take a deep discount due to the lack of warranty after a few years, the Certified Pre-Owned car (or CPO) is a middle ground that carries a slightly higher cost due to dealer going over the car upon trade in and ensuring everything is in factory condition (mechanically), even if the leather might have one or two wear marks or the paint isn’t factory fresh. These cars often offer a warranty

Shop Around

With the number of dealers shutting down (and will shut down in the coming months), you may have to look to dealers not in your immediate area for deals. It may be harder to leverage dealers against each other because of the distance you’ll have to travel. However, because of the prevalence of shipping cars to your local dealer, don’t be afraid to look around the country for great deals on cars. Maybe a particularly slow market has an over stock of mini-vans. Leverage this in your buying decisions and keep your eyes peeled in markets other than your own. It pays to be a smart shopper and go outside your local dealers.

Don’t Settle For Less Than You Want

This is a buyers market. Between dealers who are overstocked and independent owners who are strapped for cash, if you have cash, you’re in the cat-bird seat. You worked hard and now have the money to buy the car you want. Don’t let someone get away with trying to rip you off because they are in a hurry to sell the car. You owe it to yourself to get the best deal possible. That doesn’t mean you can be a “tire kicker,” but it does mean you have the luxury of time. Spend that time well!

Don’t Be Pressured to Buy

Dealers need you more than you need them. Dealers are starting to wise up to the average buyer and high pressure situations don’t work as they once might have. You are the one who is gracing them with your presence. There are plenty of dealers out there (for now) and you can just as easily drive to another one (or another make all together). They should treat you with the utmost respect for you are one of the few people out there still looking to buy a new car!

Don’t Buy More Than You Can Afford

Options on cars these days can be an endless wish list of all the things you’ve ever wanted or could possibly seem useful. Look at Mini Coopers, for example. The base price may start out at a mere $21,000. However, adding convenience package, technology packages, cold-weather packages and the rest of the seemingly endless supply of dealer add-ons can put your car well over $40,000 (I have a friend who virtually built one of these cars back when the Mini first came out). Determine your needs ahead of time, use the online car builder and read reviews about various features. Maybe you save a few dollars by not putting that DVD navigation system in and just buy a nice portable unit to use in multiple cars. A few items like that can set you back $2500 or more, depending upon your manufacturer.

Wait

There is the possibliity things will get worse before they get better. Millionairs became millionaires by saving their cash and waiting for the right time to invest. The same goes for car buying. Keep your cash in reserves until YOU are ready. Emotion can play a huge part in car purchasing as well as ownership. Don’t let greed or impulse drive your decision for that shiny new car that’ll make all your friends jeolous. Bide your time, look for your deals and wait. The car will come to you and when it does, you’ll be glad!

My last post was about basic “paper work” associated with the car. Every car has a VIN number. It’s like an auto-social security number. However, something every car does not have is a great service history and a great previous owner. With that said, the rest of the posts about buying a used car will be about the intangibles of a used car purchase. This week, we’ll be talking about the test drive.

The first thing is that when testing a used car, be sure the previous owner gives the car at least a half day to cool down before you come for a test drive. If the car has trouble starting cold, an owner may warm the car up for you before you get there to subvert the problem for a potential buyer. In the same respect, be sure to shut the car off after your test drive an try to start it warm.

Next we’ll discuss the engine itself. Pop the hood while it’s running and look at the engine. If it’s rattling back and forth you could have problems with engine bushings or an actual engine problem that could require costly engine replacements. After checking the engine idle, be sure while on the test drive you accelerate the car throughout the rev range. A slight power loss could indicate there are problems with anything from throttle position sensors ($$) to ECU problems ($$$) or full on engine problems ($$$$$). Listen to the sound of the engine at all these speeds. It’s good to make sure the radio in a potential car works, but don’t let yourself play songs the whole time. Listen to the engine and, for that matter, the transmission. If you hear heavy thuds when shifting, you could be in store for a transmission that has never had it’s fluid changed. This can be a $2000-3000 job. With a manual transmission, make sure you’re shifts are tight and slip into the gate solidly. If not, you could have bushings that need to be replaced, or worse, broken transmission internals. With automatic or manual (standard) gearboxes, put the car into every gear! Don’t assume if one or two work they all will (more so with automatics). Manual transmissions should have relatively quick engagement of the clutch, or you could be spending a few hundred dollars replacing your clutch.

To ensure the car’s steering is in tip top shape, be sure to find an empty road or parking lot and turn the wheel from one side to the other at full lock. This will not only test your steering response (and ensure you might not have power steering problems), loading the left and right suspension will yield a slight grinding noise if one of the wheels bearings needs to be replaced. Likely, you’ll only hear it from one site. This is not a hugely expensive job, but you can expect to pay $200-300 depending up the shop. Any other sever squeeks or shimmies when the suspension is loaded can indicate other suspension problems like bushings, worn shocks or springs and loose components. Be safe, but give drive and accelerate such that you can get a feel for all the corners of the car. This is a hard skill to master and know what you’re looking for and it will often behoove you to take a friend who does know this, or go on a test drive with a mechanic as part of a pre-purchase inspection.

When test driving a used car, be sure to check things like cruise control too. This is another thing often overlooked by most people on a test drive.

The last, and perhaps most important thing to check are the quality of the brakes. Talk to the current owner and ask if you can check the ABS by panic stopping in a parking lot from 25-30 MPH. Most times you’ll see an ABS light if there is a problem and most problems concern ABS sensors which are pretty cheap to replace. However, if you do have a ABS pump problem, you can expect a few hundred dollars for repair.

With any of the above options, remember, if you do have concerns, you can either have the previous owner fix the problem as part of the cost of the used car, or expect to see discounts and you can repair them yourself or have a mechanic fix the problem. That way, you’ll have someone you trust to the repairs as well as saving some money on the car of your dreams.

When we go out looking for a new or used car, the word “tire kicker” often evokes a negative stigma. However, it represents what everyone looking for a new or used car should be doing: an inspection. Once you’ve come up with your initial criteria for a replacement of addition to your current stable of cars, you’ll often want to research the possible choises you have for a variety of things like reliability, economy, usability and other real world metrics. All of the above a very personal things that each person weighs in a way only they can. However, when you actually go to check out the car itself, it’s easier to have a guide that you can run through in a mechanical fashion to make sure the car of your dreams won’t become the car of your nightmares.

This post is the first in a series of posts where I’ll present a new set of criteria as part of an inspection. At the conclusion, I’ll post a complete PDF checklist that every owner should use to see if the car you have your heart set on is, in fact, meat to be. So, onto part 1 of the list: VIN Inspection

1. VIN matches other VIN’s on vehicle and paperwork/Proper attachment (original/no alterations)
2. Vehicle has California emission sticker (California only)
3. Service bulletins and recall updates performed on vehicle
4. Check vehicle for trouble codes
5. Oil Change/Scheduled Maintenance Performed

eBay is infamous for people posting pictures of a valid VIN on a car that looks exactly like the one they are selling, when in fact they have a title that gives a completely different VIN. That clean VIN will show a car with an excellent history and the same features as the car being sold. The sellers count on a lazy user who won’t compare the VIN on the car when they see it in person to the VIN they were given to do a CarFax check with. It’s pretty strait forward, but people can be lazy and not check these things when the high of seeing a new car takes over. Once this is verified, you’ll often be able to check for service recalls. Taking the car to a local mechanic that specializes in the model you’re interested in is another great way to make sure the seller is honest and you’re getting what you’re told you are. Most mechanics will check car error codes for free, for example, and those who do charge will probably do it for less than $50. Should the car you are looking at have a check engine light (CEL), taking it to a mechanic to validate the reason is a MUST. From personal experiance, it’s very easy to buy a running car with “just a CEL on” and end up with a car that has a cracked engine block or head. If you’re lucky enough to find a car that has a complete history of records, check the average mileage between oil changes. Simply changing the oil and filter every 3000-5000 miles will help ensure your car will last years to come without serious internal engine problems.

I hope you enjoyed this small post and hope you’ll come back to learn more about our next inspection step…

The Road Test!

What to Look for When Buying a Used Car

Read these 8 Tips for Buying a Used Car before making your final decision on what car to buy:

1. The Engine - The first thing to check is the engine. You need to look at the overall condition of the engine. Is there oil all over? Does there look like the belts are worn? If you see anything that does not look right, you should inquire as to why. You can have your own mechanic check to see if there are any potential problem with the engine of the used car.
2. The Body - The body is another thing to look at. Just because you do not see any rust or holes, does not mean the underside does not have rust or holes. Check the wheel wells and the trunk for holes or rust. Take a close look at the bumpers. Make sure there is no rust by the connections. Make sure the bumper is secure.
3. The Fuel Efficiency - Some used cars can be certified gas guzzlers.  In these economic times the cars fuel efficiency should be top of mind (Check out these 8 best used cars under 10k that are fuel efficient).
4. The Mileage - Check the odometer. The mileage on a car is important. Compare the mileage to the mileage listed on the title. It is possible to turn back the odometer. An inconsistency with the odometer reading may be that a different engine was installed.
5. The Gauges - Remember to check all the gauges after you start the car. This includes the gas gauge, oil pressure gauge and the temperature gauge. A faulty gauge can cause confusion for the driver.
6. The Frame - Another thing to look at in your used car search is the condition of the frame. Examine the car from a straight on view from the front and back. Make sure the frame is straight. Cars that were in an accident and repaired may shows signs of frame damage that could not be repaired correctly.
7. The History - Ask the person questions about the car. Make sure you know everything about the car.  You can check with some of the car websites to see the history of the car. This helps you find out a little more information about the car that may not be known by the person selling it or the person may not want to disclose the information. All you need is the VIN number, which is located in the window on the left side of the car.
8. The Test Drive - Next, take the car for a test drive. Make sure to take it on the highway to see how the front end handles. A shaky front end may be a sign of an unaligned front end. See how the vehicle handles turning, stopping and accelerating. If the car passes all of your tests and examination, you are probably getting a good car that will last for a while.