12 Tips for First-Time Car Buyers

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By Remar Sutton & Will from Holland

(Part 2 of 2)

4. Don’t think you have to spend a fortune to get a good car. You don’t. Many times, the best car can cost a couple of thousand or less. But there are two rules in the car business that make it very hard to buy a good, cheap car:

• Most cheap cars are junk, especially if you buy them from a dealer. The dealers who exclusively sell ‘cheap’ cars are often a lot less reputable than other used-car outlets. Plus, these sellers usually try to make too much money on their customers.
  
• Looks don’t tell you anything about the reliability of a vehicle. This is true about all vehicles, but it’s more real if you’re looking for a really inexpensive car.

So, how do you buy a cheap car the right way?

First, you buy it from an individual, if at all possible. (And not one selling on the curb of a vacant lot—usually a con.)

Second, you buy the simplest car you can find. For instance, if you’re buying a fifteen-year-old car, don’t buy one with lots of options that can break, like power windows.

5. Never buy a vehicle without checking out the cost of collision and liability insurance before you buy it. Did you know that in many states it can cost you five times as much to insure an eight-cylinder 2-door sports car than it can to insure an identical car with a four-cylinder engine? Sellers of cars generally don’t tell you things like that. Show Me can tell you what affects the cost of insurance.

6. If your first car is going to also be your first major credit experience, don’t blow it! How you pay your first loan—even if that loan is in your parent's name or guaranteed by your parents—will affect your ability to get credit for decades. Do this right, and you’ll never regret it. ‘Right’ means never financing without comparing the dealer’s contract to your credit union’s contract. We’ll tell you how to do that in a minute.

7. Never buy your car on your first visit. All dealerships want to sell you the first time you visit them. Why? They make a lot more money if you don’t have time to compare their deal.

8. Never fall for ‘spot’ delivery. When dealers are making a lot of money on you, they just love to send you home with the car the minute you sign the paperwork. Don’t fall for it! Spot delivery means your emotions, not your wallet, are ruling the transaction.

9. Never buy a used car without having it checked out by a mechanic. Most first-time car buyers spend all their money on a car, then don’t have repair money for the almost inevitable problems any used car will have. Don’t be that dumb: find out what’s wrong with the vehicle before you buy, then budget the money you’ll need to put it in good working order.

10. If you’re buying used, never automatically finance with the dealer. Here’s a way to always know who is cheaper: Insist that the dealer gives you a copy of their finance contract and bring it to Your Credit Union. If our contract isn’t cheaper, we’ll tell you.

11. Remember that the price of the car isn’t where most sellers make their profit. The profit is made on add-on charges. Everybody will sell you a car cheap, new or used, if you know how to ask. But those same sellers can make thousands on you in other charges. We won’t let that happen.

12. Talk to us before you shop. The minute you start thinking about new wheels, stop by one of our branches. We’ll help you plan your auto attack.

Make sense? Read more about issues like this in our other articles and be sure to give us your feedback.

Cheers, Remar Sutton and Will from Holland

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