Photo: Manoj Prasad via Flickr, CC BY-SA 2.0
Avoid These Common Mistakes When Buying A Car
Purchasing an automobile often presents an intimidating set of mechanical, financial and legal issues. Unscrupulous dealers take advantage of uninformed consumers by using several new and old techniques. At best, a consumer may end up paying more than they expected. At worst, dealer fraud can end in repossession and a negative credit history.
Whether new or used, owning a car can easily become a thousand-dollar headache. These tips will help you to avoid the major pitfalls.
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Shop Around For Financing
Shop around for financing before you buy, because credit unions and banks usually offer much better rates than dealerships. Financing through the dealership also gives unscrupulous dealers an opportunity to run one of many financing scams.
For details on financing scams: Consumers for Auto Reliability and Safety
Shop Around For The Best Warranty, And Check For Recall And Service Bulletins
Shop around for the best warranty. If the car is used, call the manufacturer to find out if it is still under warranty, and if that warranty is transferable to a new owner. Check for recall and service bulletins online at the National Highway Traffic Safety Administration and Center for Auto Safety. You may also find out about recalls and bulletins by writing down the vehicle identification number and calling the customer service number for the manufacturer of the vehicle you plan to purchase.
Check The Vehicle Conditions Of Used Cars
Find out the condition of the vehicle. You can purchase a vehicle history report through a National Motor Vehicle Title Information System approved vendor, or check to see if there is a free service through your bank or credit union. Do not buy the vehicle if you find a record of serious damage, an existing lien, or if the title is identified as salvage, junk, rebuilt or flooded. Have a mechanic check out the vehicle. Many mechanic shops offer this service for around $100.
Make Sure The Seller Signs An Official Document For Used Car Purchases, And Make Sure The Title Transfers Properly
Make sure the seller signs a document showing the purchase price, date, name of the seller, and the year, make and model of the vehicle—the title document itself may be sufficient for a private-seller transaction. Check with your local department of motor vehicles for the rules regarding title transfers. Many AAA offices have a vehicle registration service and can assist with the title transfer.
Problems After The Sale Is Complete: Repair Scams
Don't get scammed by the dealer on repairs. Some unscrupulous dealers repeatedly sell the same defective car, knowing that the buyer is likely to spend more money at the dealership for ineffective repairs. The buyer may spend so much on repairs that they are unable to make payments, giving the dealer the opportunity to repossess the car and run the same scam again. If you experience mechanical problems soon after the purchase, comparison shop before taking it back to the dealer. Pay with your credit card, so you will be able to withhold payment through your credit card company in the event there is a problem with the repairs. Also, learn the "lemon laws" for your state. Some state lemon laws hold dealers responsible for sale of defective vehicles, while others don't. The Center for Auto Safety has an online guide to state lemon laws.
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