Buying and Maintaining a Car
Objectives/Focus Questions
1. What are some publications that provide information on
different makes and models of automobiles?
2. Where can you look to buy a used car?
3.
4.
5.
6.
7.
What are the things to check when examining a used car?
Why should you not buy a car?
What is the purpose of “lemon” laws?
What can you do to reduce the need for major car repairs?
If you buy a new car, where are you likely to get good service?
Making Informed Decisions
Various print materials and internet sites have buying guidelines,
tips for evaluating vehicles, and other information about costs and
reliability.
Example
Consumer reports magazine
Edmunds.com
Shopping for a Used Car
Depreciation the decline in value of a car due to age
Advantages to buying a used car
• More affordable
• Major problems have been discovered and corrected
Where to look
• Private sale (used cars less than 3 years old are covered under
manufacturer’s warranty and are transferable)
• Manufacturer’s warranty a written guarantee against specific
defects
• Obtain a Carfax
• Obtain maintenance records if possible (might be included in
Carfax)
New Car Dealers
• Trade ins the cars that new car buyers turn in as partial payment
on their new car purchases
• The used cars typically offer a limited warranty
Use car dealers
• Their used cars typically offer a limited warranty
Banks and Finance Companies
• Their cars offered for sale have been repossessed – taken back
because of missed loan payments
• Usually advertised in local newspapers
Rental Car Agencies
• Usually come with a limited warranty
Online listings
•
•
•
•
•
Ebay motors
Car Max
Craigslist
Auto shopper
Web sites of car dealers
What to look for
• Check the interior and exterior
• Tires
Go for a test drive
•
•
•
•
•
•
•
Does the car shift smoothly?
Good acceleration?
How does the car handle?
How are the brakes?
Enough headroom and legroom?
Driving position comfortable?
Air conditioning and heating working?
• Are the controls and gauges easy to use?
• Visibility good?
Check the vehicle history report
• Car fax
• VIN (vehicle information number) a unique number assigned to a
car at the factory for identification purposes
Get a mechanic’s evaluation
• Excessive rusting or cracks in the frame
• Check all major mechanical systems: steering, braking, electrical,
and exhaust systems
• Look for fluid leaks, and examine the belts and hoses
• ECM (electronic control module) controls engine operation and
emissions
Get a clear title
Title a document that indicates the legal owner of a vehicle
When not to buy
• Is the salesperson pressuring you too much?
• Are you told that you must decide immediately?
• Were you refused a test drive or the chance to have your
mechanic check out the car?
• Is it an online purchase that you have not evaluated in person?
Getting the best deal
Make the lowest offer you think might be accepted
Used Car Rule a federal trade rule requiring dealers to place a
Buyers Guide on every used car, telling the buyer both whether the
car is being sold “as is” or with a warranty, and how much of the
repair costs the dealer will pay
Cars sold by a private individual are not covered by the Used Car
Rule
Use Car Warranties
• Some warranties provide for all parts and labor for ninety days
• Some pay half the cost of repairs for a certain period of time
• Get it in writing
Shopping for a new car
• Do your homework
• Check evaluations of cars in car magazines, consumer
publications, and web sites
• Take a test drive
New car warranties
• Bumper to bumper for 3 years or 36,000 miles which ever comes
first
• 5 year or 60,000 miles limited powertrain warranty
• New car warranties may vary considerably among car
manufacturers
Negotiating the Best Price
• Know the Invoice the price the dealer pays the manufacturer for
the car
• Sticker price (MSRP) the retail price that the manufacturer sets
for the car typically 10 to 15 percent above dealer’s cost
• Destination charge
• Rebates
If you have a Trade In
For trade in value check the NADA price guide and/or Kelley Blue
Book
Keep the purchase and trade in deals separate
You usually can get a higher price for your old car by
selling it yourself
Lemon laws
Laws providing relief for people who buy new cars that do not meet
basic standards of quality and performance
New vehicle that has been in the shop at least four times for the
same repair, or is it out of service for thirty days or more during the
first year
Financing a Car
Many lenders require that you pay at least 20 percent of the selling
price as a down payment
Trade in may serve as your down payment
Arranging a Loan
• Cosign to act as joint signer on a loan, guaranteeing pLayment if
the primary signer does not meet the requirements
• Banks, S&Ls, credit unions, finance companies, dealerships
Exploring Your Options
Check loan rates at Bankrate.com
Buying Insurance
If you finance a car, the bank or loan company will probably require
proof of insurance to protect its money in case the car is badly
damaged.
What About Leasing a Car?
Leasing a car is something like renting it for a specific period of
time
Advantages of Leasing
• You can drive a new car or newly near car with a lower down
payment than if you purchased the same car
• Your payments are lower than if purchase a car. You are not paying
for the whole life of the car, just for the time of the lease period
• Often the dealer will provide an excellent service package to be
sure the car stays in good condition for resale at the end of the
lease
• At the end of the lease you just give back the car to the dealer
Disadvantages of Leasing
• You do not own the car. At the end of the lease, you have nothing
to show for the money you have paid
Private Transportation
Protecting Your Investment
• Maintenance
• Tire pressure
Private Transportation
Protecting Your Investment
• Maintenance
• Belts
Private Transportation
Protecting Your Investment
• Maintenance
• Hoses
Private Transportation
Protecting Your Investment
• Maintenance
• Washer fluid
Private Transportation
Protecting Your Investment
• Maintenance
• Coolant /
Anti-freeze
Private Transportation
Protecting Your Investment
• Maintenance
• Brake fluid
• Power-steering fluid
Private Transportation
Protecting Your Investment
• Maintenance
• Transmission Fluid
• Oil (change regularly
to extend life of car)
Private Transportation
Protecting Your Investment
• Arranging for repairs
• Driving for economy
(http://fin.emcp.net/cartalk)
Which of the following is not an
important maintenance tip to
prolong the life of your car?
A.
B.
C.
D.
E.
Check oil level often.
Check tire pressure often.
Check fluid levels often.
Check hoses.
Make sure radio volume is loud enough
for you; if not, add speakers.
Which of the following is not an
important maintenance tip to
prolong the life of your car?
A.
B.
C.
D.
E.
Check oil level often.
Check tire pressure often.
Check fluid levels often.
Check hoses.
Make sure radio volume is loud enough
for you; if not, add speakers.
What do you think?
Discussion
• Do you thinking leasing or buying is the
better option? Why?
• Do you check the oil, brake fluid, hoses,
and transmission fluid on your own car?
Why?
• How do you make sure your mechanic is
not “ripping you off”?
© EMC Publishing, LLC