"A Penny Saved Is A Penny Earned"

Monday, December 7, 2009

Buying a Used Car - Part 1

2007 Mini Cooper photographed in USA.Image via Wikipedia

Buying a Used Car

This year, millions Americans will buy a used car. Why buy used? Because a frugal person knows that the minute you drive a new car off the lot, you lose thousands of dollars in value, not a frugal choice. Also, the depreciation in value over the first couple of years is astronomical. So if you’re frugal and used is what you are planning, this post may help you.

It explains your protections under the FTC's Used Car Rule and offers some shopping suggestions, even if you are not buying from a used car dealer.

Before you begin looking at used cars, think about what car models and options you want and how much you are able or willing to spend. You can learn about car models, options, and prices by searching on the Internet and by reading newspaper ads, both display and classified.

Also, your local library and book stores have magazines that discuss and compare car models, options, and costs, as well as provide information about frequency-of-repair records, safety tests, and mileage. The U.S. Department of Transportation Auto Safety Hotline (800-424-9393) will tell you if a car model has ever been recalled and send you information about that recall.

Before You Look For a Used Car, Consider

- Costs. Remember, the real cost of a car includes more than the purchase price: it includes insurance, maintinance and repairs. loan terms and interest rates should not be a consideration, because living the frugal lifestyle means avoiding debt and interest and paying cash for purchases.

- Reliability. You can learn how reliable a model is by checking in publications for the frequency-of-repair records. Find out what models have repair facilities in a location convenient to you and if parts are readily available at the repair facility.

- Dealer Reputation. Find out from experienced people whoseopinions you respect which dealers in your area have good reputations for sales and service. You may wish to call your local consumer protection office and the Better Business Bureau to find out if they have any complaints against particular dealers.

If you go to a dealer for a used car, look for a "Buyers Guide" sticker on the window of each car. The Buyers Guide, required by the Federal Trade Commission's Used Car Rule, gives you important information and suggestions to consider. The Buyers Guide tells you:
  • Whether the vehicle comes with a warranty and, if so, what specific protection the dealer will provide.
  • Whether the vehicle comes with no warranty ("as is") or with implied warranties only.
  • That you should ask to have the car inspected by an independent mechanic before you buy.
  • That you should get all promises in writing.
  • What some of the major problems are that may occur in any car.
The Used Car Rule requires dealers to post the Buyers Guide on all used vehicles, including automobiles, light-duty vans, and light-duty trucks. "Demonstrator" cars also must have Buyers Guides. But Buyers Guides do not have to be posted on motorcycles and most recreational vehicles. Individuals selling fewer than six cars a year are not required to post Buyers Guides.

A penny saved is a penny earned,
--Greg

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