Common Mistakes When Buying A Car.

Common Mistakes When Buying A Car.

I will add more to this section over the next few days.

Not taking enough time.

Big mistakes happen in a short period of time. If you are buying a new car, did you get all the incentives and rebates that are offered on that model? Or did it go in the dealers’ pocket? Where there any advertised specials in the newspaper, TV that could help you pay a lower price? Check your contract and other paper work carefully. Ask questions and if something doesn’t sound or feel right, ask questions. If you don’t get the answer you are looking for are you still going to sign those contracts? I get people in my office several times a month asking me… What did I sign?

Buying a used car? If you are getting a used car take the time to make sure everything on the car works correctly. Even if it’s a hot day did you check to make sure the heater works? Cold day? Check to make sure the air-conditioner works. It’s a little late to check that stuff after you bring the car home.

Taking a few more minutes during the car buying process will save you hours or even days worth of work and worry later.

Not taking a test drive

This is the most important part of the car buying experience. What good is the deal, if you don’t like the way the car drives? Even if you love the way the car looks on the outside and you like the way it feels on the inside, take the time to drive it. I once had a client that a three year old V.W and wanted to get the new and improved version of the same car. He read all the brochures and did his research. He did not test drive it before he bought it. He was very disappointed in the head room after and had already purchased the car. Not taking a test drive is one of the prime causes of buyer’s remorse.

Starting off by negotiating on the monthly payment.

You ask, “What is the price of the car?” Then salesman asks you “can you afford 400 (or what ever dollar figure) a month?” RUN!!! The key to any deal is to keep everything separate. What are you paying for the car? OK, STOP. Write it down. What is the interest rate? OK, STOP. Can you get a better rate from your own bank or credit union? Remember to keep everything separate. The cost of the car, your interest rate and length of term will determine your payment NOT the salesman. Want to know what your payment will be ahead of time? Get pre-approved on a loan amount before you go shopping.

(Insert shameless plug for Ed Car Guy to do the shopping for your car and your loan rate for you, here)

“Hybrids’ thirst for metal causes mining concerns”.

From The LA Times:
– J. Mark Sternberg

Hybrid cars are often lauded as a step toward a more sustainable future for cars. However, some of the rare earth metals needed to make the electric motors and batteries for cars like the Toyota Prius and Honda Insight are getting harder to come by.

Currently China is the leading provider of metals like neodymium and lanthanum that are used in hybrid batteries and motors. However, as China’s industries begin to use more of the metals themselves, there is less to be exported.

Hybrid enthusiasts can relax a little however, mines worldwide are sure to increase production to meet the growing need for hybrid technologies.

There is an open pit mine in Mountain Pass, Calif. (just north of the Mojave National Preserve on the Nevada border) that promises to supply a massive amount of rare earths. The mine was shut down in 2002 after major environmental concerns, and then finally competition from China drove the mine from profitability. However, with the decline of exports from China and a surge in demand for hybrid technology, the mine is set to reopen and cash in on California’s newest “gold” rush.

Cash For Clunkers

Buyers of new vehicles between July 1 and November 1 2009 will be given a voucher for $3500 if they forfeit a 1984 or later model car or truck. It must have been registered for the current year and has a combined fuel economy rating at least 4 mpg lower than their new vehicle. The voucher grows to $4500 if the increase in fuel economy is 10 mpg or higher. The old car or truck is then crushed and recycled.

The voucher REPLACES the trade-in deal you might otherwise get from the dealership; it’s not in addition to the car’s private sale or trade-in value. In other words, if you’re trading in a car that’s worth $3000, your net gain is only $500. If your car is worth $100, CFC couldn’t come at a better time. You cannot go out and buy a 100 dollar car and then get one of these vouchers.
The car had to be registered in your name and had to have been covered by your insurance company more than one year.

The do’s and don’ts of this program.

The car must be 25 years old or newer getting 18 MPG or less.

Voucher is only good on new cars and tucks.

This voucher only works on leases with terms that are over 5 years.
(Never a good idea to lease that long!)

Only one voucher per person.

You can apply this voucher at the time you get the new car or truck.

You do not get the voucher AND the trade-in value of the car.

For more information go to www.cars.gov

More On Cash For Clunkers

I get asked questions about this program several times a day. I can’t help trying to look at the bigger picture and feeling there is a better way. This deal will benefit approximately 250,000 new car buyers this year. According to The Kelly Blue Book, the auto industry sold 7 million fewer cars in the U.S this year than last year.

A few thoughts… What is the real propose for this program? Sell more cars? (250,000 cars down 6.75 million cars to go!) Get gas-guzzling cars off the street? Get people to drive more fuel-efficient cars?

Under the current program your car must get lower than 18 MPG (Miles Per Gallon) The new car must get at least 4 mpg more than your current car. Only 4 MPG more? That means you only have to get a new car that gets 22 MPG or better. There are full size pick up trucks that get 22 MPG. Why not take this to a much higher level. What about cars that get 30 MPG? That would be much more fuel-efficient. All new car owners that get a car with 30 MPG could be given a tax credit or rebate similar to the ones Americans received when Hybrids first came on the market.

As for getting gross polluters and gas-guzzlers off the road, the government will already buy your car from you if it doesn’t pass a smog test. And some people want gas-guzzlers to pull their campers, trailers and other toys.

In my opinion this is a good start for the consumer. Yet, there is a long way to go.

Should I buy a car after I have leased it?

I have a better question. (After all it is my blog) Is buying that car a good “deal” for you? When leasing, you pay for the car’s depreciation. The remainder is called the residual, which is the same as your lease end purchase price. It’s as if you went to a fortuneteller and they looked in their crystal ball and said, “this is what we believe the car WILL BE worth at the end of the lease. However, is that residual a good deal now? You will need to do some research to find out what the car is worth and compare that to your buy out on the lease. Auto trader .com, kbb.com and cars.com will give you a good idea of what your car is selling for retail. Of course the best idea is to pay closer to wholesale for the car.

Some times the leaseholder or the car dealership can lower the buy out price. Just ask! It can save you hundreds or even thousands of dollars. Start with asking the company to whom you make your payment. The loan company will tell you if they can re-negotiate your buy out or they will direct you to the selling deal. It all depends on their policy. The closer you get to the end of your lease, presto change-oh, the price that they were not going to lower… is now magically lower.

Other factors to consider when turning in or trying buying out your car in at the end of the lease are…
Are you under or over the mileage?
Is there damage to the inside or outside of the car?
Did you check between the seats for spare change?

Stars, Their Cars And Shopping

The Americana at Brand and The Petersen Automotive Museum are celebrating the beginning of summer with “Stars and their Cars”, a Caruso Concours d’Elegance.
This Sunday, May 31 2009. From 10am – 4pm
Caruso Avenue at The Americana at Brand in Glendale CA

If you have never been to The Petersen Automotive Museum this is a great way to get a free sample of a great collection of cars and shop at the same time!

Speaking of shopping…

This is what learned when I went shopping with my friend Lisa.
I got Ed-ucated by a super shopper.

Lisa knows more about style, color and the person that makes the woman’s shoes than the salesman trying to sell them to her. Don’t even try to B.S her about shoes!

No need to look at the map inside the Mall. She knows where EVERYTHING is!

Anything that makes your tush look great is a bargain! No matter what the price!

If the sales person is snotty she will make them chase around the store for the exact size, shape, color and style she wants and then not buy it smile and leave.

Shopping is an EXPERIENCE.. not just to buy stuff!

You can try on 7,496 article’s of clothing… NOT buy a thing and it was STILL a good day shopping!

The invoice VS market value

Clients will ask me, “How much over or under invoice should I pay for my car”?

I am not as concerned about the invoice as I am getting a price that is below the market value. When gas was near five dollars a gallon, the market value of a Toyota Prius was between 3-5 thousand dollars over the MSRP (Window Sticker). So, if I could get a client a deal at window sticker, or a little over, it was still saving my clients thousands of dollars. At the same time Jaguar had a program that gave the dealer 6,000 dollars in incentives to sell a car. I could buy their car for 5,500 dollars below invoice. So does the invoice price matter? It only matters as it relates to the more important market value.

“My salesman told me”…

Remember that a salesman’s job is to take as much money out of your pocket as possible. (Insert shameless plug for Ed Car Guy here) My job is to save you as much money as I can and get referrals for more deals. Clients will tell me that their salesman told them, “You can return the lease whenever you want” (Yes, and you will have to pay a bunch of money to get out of it early) or they will say that they will “include” a CD player or warrantee in the deal. “Including” does not necessarily mean free of charge. They just include it in to your payment. The key to any car deal is to keep everything separate. That way you know what you are getting and what you are not getting.

The point is to get it in writing. Anything that is verbal is not worth the paper it’s NOT written on… Smiles, I think you get what I mean

Warranties

 I am often asked “should I get an extended warrantee”? (Now the politely correct term is mechanical repair coverage) The answer is yes and maybe. Here is what I mean. If you are going to finance the car, then yes, I suggest that you have a warrantee that is at least as long as the financing. Clients will only have a 3 years or 36 thousand mile warrantee on their car. They finance it for 60 months (5 Years) or even 72 months. (6 Years)  What happens after the warrantee expires? It’s in the later years of the loan that they ask me, as the car is breaking down “Can I trade my car in… even though it has issues?” Remember there is still a balance due on your loan and now it also is in needed of repair. At this point in your cars life together you probably owe more then its worth. This equity position is called being upside down.

   What do I mean by maybe? Well, It’s very important when getting a extended warrantee to find out what it does and does not cover. There are several different kinds of warrantees. Some only cover the power train. That covers the engine, transmission, and other parts of the drive train only, which is defined as the 29 parts of the vehicle through which oil flows. These are the parts least likely to fail. That’s why they are usually covered for a longer period of time. Other warrantees will cover your car bumper to bumper… BINGO! That’s the one you want.

 There is another factor to consider in getting an extended warrantee of course it’s the cost. The Credit Union has very affordable plans. Be careful of the after market companies that try to sell you one over the phone or e-mail.

 The bottom line is that if you take some time now you can save yourself headaches later.

Chrysler-Fiat Shotgun Wedding

Chrysler and Italian car manufacturer Fiat are getting married. This wedding is one made from mutual respect and convenience. Where is the love? Yes there is love, a love of the car business. Fiat will gain name recognition in North America. Chrysler will gain some much needed cash and Fiats fuel efficient technology. Chrysler did well in the late 80’s and mid 90’s with their big gas guzzling SUV’s. Now, American’s are moving toward smaller more fuel efficient cars. The award winning Fiat 500 re tooled to meet emission standards in the U.S would help Chrysler compete with the very popular Mini Copper as well as the Honda Fit and Toyota Yaris. Chrysler vehicles with Fiat’s know how should reach showrooms in 18 months or less.

Along with the Chrysler-Fiat marriage other family members are doing their part to keep the automotive family happy and healthy. The UAW (United Auto Workers) ratified a cost cutting package that will keep union workers working and cost of making cars down.

What do I think? I have more questions than answers.

• How are they going to pay back the bail out money and make a profit at the same time?

• How will the 2 completely different car companies work together?

Like any other marriage, time will tell if this union will make each participant healthy and stronger. My hope is that it does not end up like a bad clip from the TV show Divorce Court with both parties yelling about what the other had promised and who gets the crock pot. When the point of the union was to make each other stronger for the greater good of the auto family.