Car Handbook

Where to Buy a Car

Once you’ve done some background work, narrow your choices to three or four models you’d like to test drive. And choose a seller as carefully as you choose a car. This chapter tells you where to start shopping for one.

Once considered rock bottom on consumer lists that rank trustworthiness, car salespeople have climbed above others in surveys today. Car salespeople have a twofold job: selling you a car and selling you a car you want. Seek out a car dealer who errs on the latter side. Shop for a dealer as diligently as you are shopping for your car.

Price isn’t the only consideration in selecting a dealer, however. The service you’ll receive after you buy the car is critically important, too. Ask to speak to the service manager before you buy a car. Find out when the service department is open, especially if weekends and weeknights are the best times for you to bring in the car. Also ask about the availability and condition of “loaners.” Some dealers loan cars when repairs take a day or more to complete. Others will rent you a car or provide you with transportation.

Proximity is another important consideration. Having your dealership close to home saves time and gas money when servicing the car.

Ask friends to recommend dealers or seek out customers’ opinions. Also, look for customer service awards proudly displayed on the walls of the dealership. Manufacturers survey the dealers’ customers about the service they received and recognize top-flight dealerships. You can also call the Better Business Bureau at (651) 699-1111 or (800) 646-6222 for more information about a dealer.

It’s Gotta Be New

New cars are sold through dealers—but what kind of dealers? There are several types, each with its own personality and sales techniques. Get to know the types, then decide which particular seller you are most comfortable with.

The Traditional Dealer

Traditional new-car dealers will typically be willing to haggle over the price of a car. They can be intimidating or extremely affable, but much of your perception of them probably will depend upon how comfortable you are with negotiations.

No-Hagglers

Many no-haggling dealerships cropped up to serve customers who prefer not to barter over price. But no-hagglers aren’t new. The idea of selling cars at one—and only one—price was first presented by dealers who sold cars that were so sought after the dealers felt they shouldn’t have to negotiate. If a buyer didn’t like the price, the dealer could always find someone else who did.

The one-price strategy still works best for dealers selling high-demand vehicles. But today’s greater demand for customer service has added a new dimension to car sales. Customers want good service, plus the option not to haggle, while still getting a good price.

No-hagglers may offer a standard discount below the sticker price and hold the price steady for all customers. The set price allows the dealership to make a decent profit, yet it reassures the customer that he or she isn’t being taken for a ride. This allows a friendly relationship between the customer and the salesperson.

One no-haggling salesperson, who called himself a “service technician,” said, “I steer you into the correct vehicle. I’m not just trying to sell you anything. I want you to find the ‘right seat.’”

Be aware that no-hagglers may negotiate loans and may push extended warranties, rustproofing, credit life insurance, service contracts, and other back-end extras, as discussed here.

Auto Brokers

If you want to shop price without doing the work yourself, you can hire an auto broker. Brokers may or may not get you the best deal. They are found through some credit unions, banks, discount clubs, and auto clubs such as the American Automobile Association. They may work with a handful of dealers or a single dealer. Sometimes they make their money by splitting the manufacturer’s holdback with a dealer. A holdback is a set amount of money the manufacturer refunds to the dealer when a car is sold.

To find out if a broker is reputable, talk to car buyers who have used the service or call the Better Business Bureau at (651) 699-1111 or (800) 646-6222 to see if the broker has a good rating.

Selecting Used-Car Sellers

More than half of the people who buy used cars buy them from private individuals—and half of those individuals are friends or family members. Other used cars are usually found through ads in the classified section of the newspaper, on the Internet, and on bulletin boards, or you may see a used car with a home-made sign in the window.

Dealers, used-car lots, rental car agencies, auto brokers, and auctions all sell used cars, too. There are major pros and cons to buying from each.

Private Sales

Pros: If you know the seller, chances are good you’ll be able to get honest answers about how the car was driven and kept up. The owner will usually sell the car for less than its retail value because he or she has no overhead and only small advertising fees.

Cons: If you don’t know the seller, you might not get honest answers about how the car was driven and maintained. Ask for repair receipts. Be sure to check that the seller is indeed the owner. If not, the seller could be what’s called a “curbstoner”—a used-car sales pro who pretends to be a private seller and more likely than not specializes in fleecing his or her customers. You can run into title and licensing problems when you buy from anyone other than the owner. If you suspect the private seller is a salesperson posing as the car’s owner, ask to see the title of the car. If the name on the title is different from the seller’s, walk away.

Curbstoners

Watch out for pros posing as private car sellers. These curbstoners run classified ads, just like private sellers, but often ask to meet at a parking lot so you won’t know where they live. They take advantage of buyers by overcharging for cars, often by rolling back odometers to increase the car’s apparent value or by selling previously wrecked and rebuilt cars. Call the past owners who appear on the title to double-check the mileage. And be wary if a seller’s phone number appears more than once in the classifieds. That’s the sign of a pro.

Phone and Email Inquiries

Ask private sellers the following questions over the phone or by email to save you unnecessary trips to look at cars. Honest sellers will tell the truth whereas a curbstoner will lie about them, so be wary.

1. What condition is the car in?
2. Why are you selling it?
3. Are you the original owner?
4. How long have you owned the car?
5. Have you maintained the car according to the manufacturer’s schedule in the owner’s manual? How often has the oil been changed?
6. Do you have repair receipts I can look at? Where did you usually take the car for service?
7. Where did you buy the car?
8. Do you sell many cars?
9. Where did you generally drive the car—in the city, on long trips?
10. What is the mileage?
11. Has the car ever been painted? If so, why?
12. Has the car ever been recalled? If so, may I see verification that the problem was corrected?
13. Would you object if I took the car to my mechanic for inspection?
14. Is there anything that I’d need to do to put the car in tip-top condition?
15. Are there any liens on the car? (If so, the owner still owes money on the car and you could get stuck paying what’s owed if you buy the car.)
16. Has the car ever been in an accident or a flood?

New-Car Dealers

Pros: They usually have a wide selection of higher-priced used-car models because they only keep the best cars. The others go to auctions or used-car lots. Because they have service facilities, they’re more likely to have made repairs on the car than have other types of sellers.

Cons: Used cars from new-car dealerships may be more expensive.

Used Car Lots

Pros: Besides offering a broad selection, used car lots often offer a number of less expensive, older model vehicles.

Cons: Used car dealers often buy the cast-off cars from new dealers. They also buy from auctions or purchase used cars from lease fleets, taxi companies, or police departments.

Used car lots often don’t have a service department to repair cars; instead, these operations tend to sell cars “as is.” Even so, under Minnesota law, a used car dealer must give you a warranty unless the car is excluded from the law for such reasons as having more than 75,000 miles on it or costing less than $3,000. See Used Car Warranty Law for a detailed description of the law.

The dealer may also offer to sell you a service contract to cover the cost of repairs. This serves as insurance against having to pay through the nose for repairs. Read any service contract carefully so you know the deductible amount and exactly which repairs are covered.

Questions to Ask a Dealer About a Used Car

1. Where did you get the car?
2. What condition is the car in?
3. Does it have any major defects?
4. Has the car ever been in an accident?
5. Has the car ever been painted? If so, why?
6. What is the mileage? What steps have you taken to confirm the accuracy of the odometer reading?
7. Has the car ever been recalled? If so, may I see verification that the problem was corrected?
8. Has the car ever been bought back by the manufacturer as a lemon?
9. What repairs have you done to it?
10. Would you object if I took the car to my mechanic for inspection?

Rental Car Agencies

Pros: Some people believe rental cars are a good deal because they’re usually rented by business people for short trips to the airport or meetings, as well as for vacationers’ longer, but less wearing, road trips. Rental cars are usually serviced regularly, with records of their maintenance history.

Cons:You don’t have any way of knowing who has driven the car before you buy it. You don’t know if the car was abused by one or more of the drivers who previously rented it. That’s why the Minnesota Automobile Dealers Association members have adopted a standard to disclose when cars for sale are previous rentals. That way, you can make up your own mind about whether you want to purchase a previous rental vehicle. Rental cars may also cost slightly more than cars purchased from private sellers.

Auctions

Pros: You can get a good deal if you really know cars and are an avid fixer-upper.

Cons: Mostly professionals bid at auctions, so auctions can be intimidating for the average car buyer. Some auctions won’t admit private parties.

Online Car Sales

Online car sales are becoming increasingly popular. You can go online to narrow down your search for local cars and then go inspect/drive the car before making a purchase. Many people, however, are buying cars from far away, uninspected and unseen. If the delivered car is not as represented online, it may be very difficult to resolve the problem.

Internet car sales can also be a haven for fraudulent actors looking to make easy money at the expense of others. A current car scam against people who are trying to sell their car online illustrates the point.

How the Scam Works
The scam artist may claim that he/she is buying a vehicle on behalf of a client. Once a price is agreed on, the scam artist sends a personal or cashier’s check to the seller in excess of the purchase amount, requesting that the seller make payment directly to the supposed buyer, in the same amount as the excess payment. The fraudulent operator promises that once payment is received, a representative will pick up the vehicle. Since sellers are often in a hurry to finalize the vehicle’s sale, the seller will typically cash the check and make the payment to the scam artist before discovering that the check was fraudulent. Victims of such fraud can be scammed out of thousands of dollars. Furthermore, it can be difficult for law enforcement agencies to track down such perpetrators, leaving victims with little recourse or hope of recovering their money. Prevention is the best protection against such scams.

Tips to Avoid Internet Scams:

• If it sounds too good to be true, it probably is.
• Don’t be tricked into sending payments to fraudulent actors. If an individual is actually owed a commission, their client should be the party making the payment.
• Don’t be rushed. People often make poor decisions when they are hurried. If someone really wants to do business with you, they will wait until you are ready to make a legitimate transaction. Furthermore, if an individual wishes to make changes to the terms of the transaction, such as where the payment is sent, do not let your eagerness to complete the transaction blind you to potential problems.
• Know where you are sending money. If you send payments to foreign countries, law enforcement agencies may lack jurisdiction to pursue criminals there.
• Be on guard against offers that include checks or other payment instruments from overseas.
• Beware payments made by cashier’s check. Even though banks may make money readily available to a customer upon cashing a cashier’s check, the check may not be authentic. Checks generally must be sent to the issuing bank before payment is authenticated, a process which frequently takes several days.
• Contact the bank or financial institution that the check is drawn from to determine whether the payment is legitimate. Do not, however, use the contact information that appears on the check, which may be forged to misdirect potential fraud victims. Instead, obtain such contact information independently, through legitimate directories or other sources.
• Use a secure escrow payment service such as PayPal. Many online auction companies offer such a service for a low fee. Question demands that you use an escrow payment service you are unfamiliar with, or other unusual payment requests.

The Test Drive

You’ve done your research. You’ve narrowed your choices to a few models. Now it’s time to get behind the wheel and take that all-important test drive.

You may wonder, isn’t a test drive like any other type of drive? Not quite. Keep in mind what you want to learn. You’re about to make a major commitment and you want to make sure it’s to the right vehicle. The following should be a part of your test drive:

• Take the car on the road for at least a half hour.
• Drive in city and freeway traffic. See how the car starts, stops, shifts (if it has a manual transmission), speeds up on the freeway, and takes corners.
• Ask yourself how comfortable you feel in the driver’s seat.
• Let a friend drive so you can see how the car feels from the passenger’s seat. Try out the back seat, too, if you’re buying a sedan or van.
• If it’s winter, great! Find out how the car handles on snow and ice.
• Don’t go easy on the car. Drive like you really plan to drive.