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used car savings

Save Money When You Buy A Used Car, The Right Way Part 1

Buy a Used Car The Right Way

You may not be on the market to buy a used car, but at some point, your child, niece, nephew, grandchild or other relative friend or neighbor may be. Buying a used car can come with many “gotcha’s” that can ruin your savings. So, here are a few helpful hints.

WAYS TO BUY A USED CAR

There are many ways to buy a used car. Some are efficient and some are not. You can buy from a family member or friend and know the history of the car. You can also buy from the used car lot side of a new car lot, which is a good option when you go to a car lot.

You can purchase a certified used car, but it is a good idea to check out the VIN number any. The certified used cars are usually 3-4 years old and typically are in good shape.

You can also purchase a used car at one year old, from a rental car agency. You can also buy directly from a used car dealer, this requires a lot of homework on your part to make sure you have a quality used car, and you don’t get an over-priced car or predatory loan.

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A lady I spoke to at a seminar of mine told me she was concerned for her son. He went alone, to a used car lot and brought home a car. She was proud of him for taking the initiative to go alone, negotiate a car price and loan, and provide his transportation to and from work.

He was told the length of his loan period, but it was not true. That time period has long past, and he still owed a lot of money on his car loan. She could not understand how this could happen.

I told her to get the contract out, read the fine print, and get back to me. Before she contacted me, I told her what to look for. The following items are what she looked for, and sadly, many are what she found.

Credit scores can make or break your finances for car buying

GET INFORMATION ABOUT USED CAR LOANS FIRST

I informed her that she should talk to her son and tell him the importance of “doing his homework” before he makes a major purchase of any type. The next time he sees; “used cars for sale” – he should immediately start his research.

The first thing to do is to call the local banks and credit unions to find out what the going APR and interest rates are. Currently used car loans interest run from 2% to 5%. If you go to a used car dealer and he offers you 20%, you are better off riding the bus.

Alternatively, if he offers you a 7-year loan on an inexpensive used car, that is also a red flag — that something is wrong.

If you can qualify for a used car loan from a bank or your local credit union, these loans are far superior to the used car dealer loans.

You can get qualified from your bank or credit union first, then take your “evidence of loan qualification” papers with you to the dealer.

Learn car buying skills like a pro

DEALER INTEREST KICKBACK

The women I spoke to about her son’s used car loan informed me that her son’s contract stated he was paying 21% interest, he was told the interest rate was 9% by the dealer. Understand more about debt and money when you get your free ebooks on debt, money, and finances.

Used car dealers can charge something called a “dealer rate” over the “buy rate”. The dealer works with a lender who gives him the loan and allows him to “mark-up” the interest rate as he wishes, this is the “dealer rate”.

The dealer is not really concerned about the markup because he will get the difference between his rate and the lender’s rate, or the lenders “buy rate”. He uses the excuse that his clients all have bad credit, and are high risk.

That is not true, her son had good credit. His only problem was that he was a low-information buyer. The lenders “buy rate” is the lower rate the car buyer qualifies for — her son had a very low “buy rate”, but did not know it. Her son did not understand what the sign, “used cars for sale”, really meant, and neither did she.

A sad trick that some used car dealers’ play on low-information buyers is the conditional sale agreement. The buyer unknowingly signs a “conditional sale” agreement, after they have the car for a while, the dealer calls and tells them to bring back the car.

Used Car Buying Borders on Rocket Science,   -Lois Center-Shabazz

He then, informs the buyer that he/she must now sign a permanent sells agreement, but the interest rate has been increased.

Lois Center-Shabazz| Money Strategist | Course Delta Agency

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How to Buy a Car From a Private Owner

BUY A CAR FROM A PRIVATE OWNER 

HERE ARE 3 OF THE MOST USUAL WAYS CAR BUYERS BUY A CAR FROM A PRIVATE OWNER

The main things a buyer needs to look for is legal ownership, that the car has DMV registration, and a car that has no outstanding recalls or major mechanical problems.

If the car has major problems the seller should disclose all problems with the car, so the asking price will be based on the true value of the car.

Just as I have recommended before it is important to get the VIN# and license plate of the car. The first research with these items should be with your local department of motor vehicles – they will verify the legal ownership and registration of the car.

You can follow up your research with the online services that give you information about the car via the VIN# and license number.

Here are 3 of the most common ways to buy a car from a private owner:

  1. BUYING FROM A CLOSE FAMILY MEMBER, NEIGHBOR, OR FRIEND

The best opportunity is when you buy a car from a person you are close to because you are more likely to be familiar with the functions and mechanics of the car.

Also, a family member or close friend will be more likely to let you know what the true status of the car is. Even if you know the person well, it is still important to verify the status of the car–it’s ownership and legal status.

Learn car buying skills like a pro

  1. BUYING FROM A NEWSPAPER AD

This is a little more complex way to buy a car from a private owner who you are not familiar with. The verification process is crucial in this situation.

It is rare but, there are those who sell cars that don’t belong to them. They use false identification and sell stolen cars that have not yet been reported, or through some other process.

Because of the many ways strangers can sell illicit cars, it is important to take your time and go through a verification process. Start with asking for a driver’s license and car registration that match, before you look at the car. Make sure the car is insured before you test drive it.

  1. BUYING FROM SIGNAGE ON A PARKED CAR

Some cars are left on the side of the road by their owners with signs “for sale”. Those that are parked in the driveway of the owner’s home is the best bet because you have their address, if it matches the registration, it is most likely their car.

If it is parked on the side of the road, it may or may not belong to the seller. So, be cautious and go through the verification process.

Make sure you 1. See the seller’s driver’s license, 2. See the car registration, 3. Take the VIN#, 4. The license plate number on the car – all this should be taken to the DMV and other verification websites. Of course, again, make sure the car is insured before test driving it.

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Buying a car from a private owner can be tricky, some have been found to be stolen, and some are simply bad cars. Remember to always get these cars checked out by a mobile mechanic.

And, make sure the VIN#, which appears in the lower corner of the front windshield always matches the car description.

From the VIN#, you can also get the history of the car such as reported car accidents, totaled out cars that are patched, flooded cars and history of owners.
An excerpt from the eBook, “The Ultimate Guide to Car Buying for Women” by Lois Center-Shabazz

Lois Center-Shabazz | Course Delta Agency
Personal Finance: Author, Blogger, Course Creator, Money Strategist

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The ultimate guide to car buying for women

The ultimate guide to car buying for women

3 Surefire Ways to Save Money on Car Buying

How to Buy a Car From a Used Car Lot For Women

Buy a Car From a Used Car Lot

If you must buy a car from a used car lot, here are some helpful suggestions to protect your safety and your finances.

1. RESEARCH CARS THAT PERFORM WELL AS USED CARS

Before you think you can buy a car from a used car lot, especially if it is five or more years old, do a search for a similar make, model and year online. Find out 1. what buyers and dealers are asking for that make and model with x number of miles on the car, 2. What is the maintenance history of the car from frequent breakdowns to cost,  3. How long does this type of car last without major problems?

With this knowledge, you won’t be inclined to overpay for a car on a used car lot, since you know the maximum you should be charged. Used car dealers get their cars from various sources, 1. Some are from car auctions where cars are rejected by new car dealers, who take used cars as trade in’s for new cars. 2. Some cars are purchased directly from sellers, 3. Some cars are obtained illegally – this is where VIN# and license plates are important to investigate.

Learn car buying skills like a pro

2. SHOW ME THE CARFAX AND DMV REPORT

If the used car dealer tells you that you don’t need a Carfax, DMV or other reports with your car, go elsewhere. The Carfax report, as well as other reports, can tell you if you are looking at a bad car. I consider it a bad car if it has been in an accident–and was considered totaled, or a  flood, or has an excessive number of owners, or if it has a questionable title.

Make sure you take a picture of the VIN# with your cell phone ( it is on the lower windshield), then you can go home and get your own Carfax report and check with the DMV that the car has not been reported stolen or severely damaged. Periodically stolen cars find their way onto used car lots.

3. DON’T BUY A USED CAR FROM A USED CAR LOT UNTIL YOUR MECHANIC CHECKS IT OUT

This sounds like a lot of trouble, but it can save you a lifetime of pain and financial loss. There are mobile mechanics you can pay to meet you at a car lot and look at the car you are interested in. Make sure that mechanic goes over the car thoroughly. If it is in bad shape, listen to the mechanic. Some dishonest used car lots sell badly damaged cars that look ok on the outside.

Some used car lots sell certified used, with an expensive warranty, but they are known for not certifying their cars. Have your own mechanic certify the car before you think about buying it, if your mechanic says the car is ok to purchase, consider putting the certification money in the bank, so you can fix it as needed.

The when you buy a car from a used car lot and get and purchase a warranty, a certified warranty can cost as much as $2000 or more.


4. IF THE CAR YOU ARE INTERESTED IN IS LESS THAN 5 YEARS OLD

See if a car less than 5 years old has the original manufacturer’s warranty with it. Many cars are sold with a 5 year or 10-year manufacturer’s warranty on the powertrain. The original manufacturer’s warranty could be voided for many reasons, including if the original owner did not take the car in for warranty servicing during the first year or if the car was in a bad accident or flood.


5. Women, Please Take a Man With You

Ladies, don’t go it alone. I was told growing up not to purchase a car alone. Especially a used car because, unfortunately, there are still far more men who study car maintenance than women. Many men will know immediately when a car is started if there are serious problems. If not after starting the car, they can see if there are things under the hood that signal major problems.

With this said, please take a Dad, a brother, a best male friend, a boyfriend or husband when you feel that you have to buy a car from a used car lot. Unfortunately, I have a few very sad stories of women who went to buy a car at a used car lot alone and the results were disastrous.

Save Money, Don't Get Cheated When Buy a Car


6. IMPORTANT NUMBERS TO CHECK ON A USED CAR

The VIN# tells a lot about a car. You need it to verify that the car is in sellable and buyable condition with the car report services such as carfax.com, Kelly Blue Book, or kbb.com and your state, DMV (Department of Motor Vehicles). The next most important number is the license plate.

These numbers will tell you if the car is registered to the current owner which should be the used car dealer. I know a few people who found out their car was not registered to their used car dealer after an accident or ticket.

They found out the 30-day temporary registration was never valid, and they never got their “pink slip” or legal ownership paper. If you don’t get a “legal registration” in 40 days, contact the car dealership, then the DMV.

The car should be registered the same day you purchase it at the dealership if it is a legitimate dealership. There was a recent news story where people had new – used cars confiscated from their driveways, the VIN# on their cars were traced to a stolen car ring, but each of the individuals purchased their car from, what they thought, was an honest used car dealership.

Don’t be in a hurry to buy a car from a used car lot, take your time, check it out.

Every used car is required to have a “Buyers Guide” affixed to the car window, it gives information such as a no dealer warranty, or dealer warranty. Read the “Buyers Guide” sticker on the window carefully, when it says “as-is” that is what they mean, as the car may not run after you leave the lot, but you do have 3 days to rescind your contract, so get the car inspected quickly.

Far too many people never read the sticker on the window called the “Buyer’s Guide”, and pay for their negligence later.

When you buy a car from a used car lot the process is very serious. You must know that the car lot has a good reputation and sells good, legal car or you could suffer for years to come with a bad car, a bad loan or both.

Excerpt from the eBook “The Ultimate Guide to Car Buying For Women” by Lois Center-Shabazz

Lois Center-Shabazz | Course Delta Agency

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Resources: Federal Trade Commission, Consumer Finance Protection Board

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The ultimate guide to car buying for women

The ultimate guide to car buying for women

buy a car from a used car lot