Q. New automobile models are being released. Is now a good time to consider purchasing a new vehicle?
A. Buying a car, whether it’s a new one or a used one, can be scary and overwhelming. But it doesn’t have to be! Keep these tips from the Better Business Bureau, www.bbb.org, in mind to make the process as easy and successful as possible.
There is a lot you can do to get ready before you even set foot in a dealership. Here are some things you should do so you are an educated and prepared consumer:
Consider payment options. Take time to consider your payment options. You often have two options: pay for the car in full or finance over time. Choosing to finance the car over time may mean less money upfront, but it increases the overall cost of the car if you are paying interest. If you do decide to finance it, be sure you completely understand the terms of the financing agreement before you sign. For example, ask if you will have to pay any fees if you pay off the loan early. You can shop around for the best loan through third parties like banks and credit unions. Consider being pre-approved for a loan so you have something to compare to the dealer financing. Having an offer in hand will also give you a bargaining point.
Set a budget. Do not automatically spend whatever you qualify for in a loan. Decide how much money you can spend, based on the maximum amount you have saved up to spend or the maximum down payment and monthly payment you can afford if you are financing the car through a loan. When calculating the cost, be sure to include the price of the tax, title, registration, fees, and insurance. You are responsible for insurance as the purchaser of the car, and the dealer is not obligated to cancel a contract because you find out later you cannot afford to pay insurance. Do not forget to consider factors like how much gas the car will use and how much maintenance and repairs will cost when looking at what impact owning a car will have on your overall budget.
Lease vs. buy. Determine whether buying or leasing the car provides the best value for your money. A lease offers lower monthly payments, little money upfront, and restricted mileage. At the end of the lease the car is returned and the process is repeated. Buying a car requires monthly payments and more money upfront, but once the loan is paid off, you own the car.
Choose a car model. Check out various models to determine those that are the safest, most reliable, and otherwise suitable. Research and think about the equipment and options the car offers, the safety features you want, the conditions you will be driving in, and any other needs you have in mind for yourself or your family. Will you use it for commuting short distances or taking long road trips? How many passengers must fit comfortably? How long do you want to keep it? Consult resources like Consumer Reports, www.consumerreports.org . Consider additional factors like fuel economy, warranties, and operating costs. You should also look into theft rates as they can make your insurance higher. Investigate different cars’ accident history. Narrow your choices to several cars. Do not make the mistake of having your heart set on one car — it may reduce your bargaining power.
Compare prices online. Look up the prices of different cars on websites like Kelley Blue Book and Edmunds. By doing a side by side comparison of a few models, you can see what each car has to offer for what price. This will also help you determine the value of your trade-in. Obtain updated price lists to compare to the dealer costs displayed on the window sticker. You will know how much bargaining room you have on the basic car and individual options. It is important to know the difference between the invoice price (the price the dealer paid for the car) and the sticker price of the car (the desired price the dealer wants you to pay). When comparing prices, also consider different warranties, length of the warranty period and what items are covered by the warranty (this may vary). Check if the warranty includes parts and labor, and for how long. Ask if there are preconditions that you, the buyer, must maintain to qualify for the terms of the warranty.
Look for rebates. Many rebates are available to all consumers, but some carry eligibility requirements like loyalty bonuses, military status, or trade-in bonuses. Make sure you understand these qualifications to avoid disappointment later.
Find a dealership. Ask friends and family members for dealerships nearby that they trust and that provided a pleasant experience. Read Business Profiles at BBB.org to see BBB Accreditation status, ratings, reviews, and complaints. Search online for the dealers’ names and the words “complaints” or “reviews” to see what people are saying about them. The dealer should not be pushy. You want a dealer who will make you feel comfortable and informed with all of the available options. Be on the lookout for reviews that mention any bait and switch tactics.
At the Dealership
Remember that an ethical auto dealer will let you take the time you need to make a conscious and thought-out decision. If someone is rushing you and putting pressure on you, you may not want to do business with them.
Here are some things to do during your visit to the dealership:
* Take your time.
* Go on a test drive.
* Keep all negotiations separate.
* Determine the price for car.
* Decide if you are buying from stock or ordering from the factory.
* Discuss your trade-in.
* Ask about warranties and service contracts.
Signing the Contract
While some dealers may write a three-day cancellation into your contract, there is no blanket three-day cancellation rule (unless your purchase falls within the door-to-door rule because you received a promotion to go in for a test drive). Once you sign the contract, you are legally bound to buy the car unless the contract specifically states any options to cancel, so it is imperative that you read and understand everything before signing.
Before You Drive Away
Before you sign any final papers and drive away from the dealership in your new car, take a few minutes to inspect it carefully.
Check over the exterior of the car for any damage, such as “dings” or scratches. Look for a glossy and even finish and check that body panels are aligned evenly and the trim is secure.
Check the Vehicle Identification Number on the car to ensure it matches the one on the contract. Make sure you have the owner’s manual, warranty forms, and all legal documents.
After the Sale
Be sure to keep all of your paperwork for the vehicle, including the warranty and loan papers, in a safe place.
Maintain a file of every repair order, receipt, and letter of complaint. There is no rule that you can return a car within 30 days if you are unsatisfied, but if your car needs constant repairs from the time you buy it, you may have some recourse.
In the United States, you may be protected by “lemon laws” in your state. The State of Tennessee and Georgia have new automobile “lemon laws”. BBB Auto Line also has information on the lemon laws in each state, as well as a dispute resolution program to help you with your lemon law complaint.