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Buying a used car in georgia insurance

Before you start shopping for a used car, do some homework. It may save you serious money. Consider your driving habits, what the car will be used for, and your budget. Research models, options, costs, repair records, safety tests, and mileage — online and through libraries and bookstores.

  • Before You Buy a Used Car
  • Pay in Full or Finance
  • Dealer Sales and the Buyers Guide
  • Warranties
  • Service Contracts
  • An Independent Inspection Before You Buy
  • Private Sales
  • If You Have Problems
 

Before You Buy a Used Car

Whether you buy a used car from a dealer or an individual:

  • Test drive the car under varied road conditions — on hills, highways, and in stop-and-go traffic.
  • Ask for the car's maintenance record from the owner, dealer, or repair shop.
  • Determine the value of the vehicle before you negotiate the purchase. Check the National Automobile Dealers Association's (NADA) Guides, Edmunds, Kelley Blue Book, and Consumer Reports. Some of these organizations charge for this information.
  • Research the upkeep costs for models you’re interested in, including the frequency of repairs and maintenance costs.
  • Examine the car using an inspection checklist. You can find checklists in magazines, books, and on websites that deal with used cars.
  • Check whether there are any unrepaired recalls on a vehicle. Start by asking the dealer if the vehicle you’re considering has a recall. You also can check yourself by entering the VIN at safercar.gov, or by calling the National Highway Traffic Safety Administration's (NHTSA) Vehicle Safety Hotline at 1-888-327-4236. If there is a recall, ask the dealer to fix it, or to give you information showing it was fixed. Keep in mind that federal law doesn’t require dealers to fix recalls on used cars, so you might need to get the repair done yourself. But don’t wait — according to NHTSA, all safety recalls pose safety risks and, left unrepaired, might lead to accidents.
  • Get an independent review of a vehicle's history. Check a trusted database service that gathers information from state and local authorities, salvage yards, and insurance companies. For example, the Department of Justice’s National Motor Vehicle Title Information System (NMVTIS) offers information about a vehicle’s title, odometer data, and certain damage history. Expect to pay a small fee for each report. The National Insurance Crime Bureau (NICB) maintains a free database that includes flood damage and other information. You can investigate a car's history by its Vehicle Identification Number (VIN). You also can search online for companies that sell vehicle history reports. If the report isn't recent or you suspect that it has missing or fabricated information, verify it with the reporting company. The information in the reports may not be complete, so you may want to get a second report from a different reporting company. Some dealer websites have links to free reports.
  • Consider hiring a mechanic to inspect the car.

Payment in Full or Finance

You have two choices: pay in full or finance over time. Financing increases the total cost of the car because you’re also paying for the cost of credit, including interest and other costs. Consider how much you can put down, the monthly payment, the financing term (such as 48 months), and the annual percentage rate (APR). Rates usually are higher and financing periods shorter on used cars than on new ones.

Dealers and other finance sources (like finance companies, credit unions, and banks) offer a variety of financing terms. Shop around, compare offers, and negotiate the best deal you can. If you're a first-time buyer — or if your credit isn't great — be cautious about special financing offers. They can require a big down payment and a high APR. If you agree to financing that carries a high APR, you may be taking a big risk.

  • If you decide to sell the car before the end of the financing period, the amount you get from the sale may be less than the amount you need to pay off the financing agreement.
  • If the car is repossessed or declared a total loss because of an accident, you may have to pay a considerable amount to repay the loan even after the proceeds from the sale of the car or the insurance payment have been deducted.

If money is tight, you might consider paying cash for a less expensive car.

If you decide to finance, make sure you understand the financing agreement before you sign any documents.

  • What is the exact price you're paying for the vehicle?
  • How much are you financing?
  • What is the finance charge (the dollar amount the credit will cost you)?
  • What is the APR (a measure of the cost of credit, expressed as a yearly rate)?
  • How many payments will you make — and how much is each one?
  • What is the total sales price — the sum of the monthly payments plus the down payment?

Dealer Sales and the Buyers Guide

Used cars are sold through a variety of outlets: franchised and independent dealers, rental car companies, leasing companies, used car superstores, and online. Ask friends, relatives, and co-workers for recommendations. Contact your local consumer protection agency and state Attorney General to find out if any unresolved complaints are on file about a particular dealer. You also can search online for reviews or complaints. Enter the name of the seller and the word “review” or “complaint” into a search engine.

Some dealers attract customers with "no-haggle prices," "factory certified" used cars, and better warranties. Consider the dealer’s reputation when you evaluate its ads.

Dealers are not required by federal law to give used car buyers a three-day right to cancel. In some states, dealers are required to give a right to cancel. In other states, the right to return the car in a few days for a refund exists only if the dealer chooses to offer this privilege. Dealers may describe the right to cancel as a "cooling-off" period, a money-back guarantee, or a "no questions asked" return policy. Before you buy from a dealer, ask about the dealer's return policy, get it in writing, and read it carefully.

The Federal Trade Commission’s (FTC) Used Car Rule requires dealers to display a Buyers Guide in every used car they offer for sale, and to give it to buyers after the sale. This includes light-duty vans, light-duty trucks, demonstrators, and program cars. Demonstrators are new cars that haven’t been owned, leased, or used as rentals, but have been driven by dealer staff. Program cars are low-mileage, current-model-year vehicles returned from short-term leases or rentals. Buyers Guides do not have to be posted on motorcycles and most recreational vehicles. Anyone who sells, or offers for sale, fewer than six cars in a year doesn't have to post a Buyers Guide.

The Buyers Guide tells you:

  • the major mechanical and electrical systems on the car, including some of the major problems you should look out for;
  • whether the vehicle is being sold "as is" or with a warranty;
  • what percentage of the repair costs a dealer will pay under the warranty;
  • to get all promises in writing;
  • to ask to have the car inspected by an independent mechanic before you buy;
  • to get a vehicle history report and to visit ftc.gov/usedcars for information on how to get a vehicle history report, how to check for safety recalls, and other topics;
  • to ask for a Spanish Buyers Guide if the sale is conducted in Spanish;
  • the dealer’s contact information, including the contact for complaints; and
  • to remember: spoken promises are difficult to enforce.

Keep the Buyers Guide for reference after the sale.

Maine and Wisconsin are exempt from the FTC’s Used Car Rule. Those states require dealers to display a different version of the Buyers Guide.

Warranties

When you buy a used car from a dealer, the Guide must reflect any negotiated changes in warranty coverage. It becomes part of your sales contract and overrides any contrary provisions. For example, if the Buyers Guide says the car comes with a warranty and the contract says the car is sold "as is," the dealer must give you the warranty described in the Guide.

As Is - No Dealer Warranty

When the dealer offers a vehicle "as is," the box next to the "As Is - No Dealer Warranty" disclosure on the Buyers Guide must be checked. If the box is checked but the dealer promises to repair the vehicle or cancel the sale if you're not satisfied, make sure the promise is written on the Buyers Guide. Otherwise, you may have a hard time getting the dealer to make good on his word. Some states — Connecticut, Hawaii, Kansas, Maine, Maryland, Massachusetts, Minnesota, Mississippi, New Jersey, New Mexico, New York, Rhode Island, Vermont, West Virginia, and the District of Columbia — don't allow "as is" sales for many used vehicles.

Louisiana, New Hampshire, and Washington require different disclosures from those on the Buyers Guide to create a valid “as is” sale. If the dealer fails to provide proper state disclosures, the sale is not "as is." To find out what disclosures are required for "as is" sales in your state, contact your state Attorney General.

Implied Warranties

State laws hold dealers responsible if cars they sell don't meet reasonable quality standards. These obligations are called implied warranties — unspoken, unwritten promises from the seller to the buyer. However, dealers in most states can use the words "as is" or "with all faults" in a written notice to buyers to eliminate implied warranties. There is no specified time period for implied warranties.

If you have a written warranty that doesn't cover your problems, you still may have coverage through implied warranties. That's because when a dealer sells a vehicle with a written warranty or service contract, implied warranties are included automatically. Dealers can't delete this protection if they provide a written warranty. Any limit on an implied warranty's time must be included on the written warranty.

Implied Warranty of Merchantability

The most common type of implied warranty is the warranty of merchantability: The seller promises that the product offered for sale will do what it's supposed to. That a car will run is an example of a warranty of merchantability. This promise applies to the basic functions of a car. It does not cover everything that could go wrong.

Breakdowns and other problems after the sale don't prove the seller breached the warranty of merchantability. A breach occurs only if the buyer can prove that a defect existed at the time of sale. A problem that occurs after the sale may be the result of a defect that existed at the time of sale or not. As a result, a dealer's liability is judged case by case.

Implied Warranty of Fitness for a Particular Purpose

A warranty of fitness for a particular purpose applies when you buy a vehicle based on the dealer's advice that it is suitable for a particular use. For example, a dealer who suggests you buy a specific vehicle for hauling a trailer is promising that the vehicle will be suitable for that purpose.

Full and Limited Warranties

Dealers may offer a full or limited warranty on all or some of a vehicle's systems or components. Most used car warranties are limited and their coverage varies. A full warranty includes the following terms and conditions:

  • Anyone who owns the vehicle during the warranty period is entitled to warranty service.
  • Warranty service will be provided free of charge, including removing and reinstalling a covered system.
  • You have the choice of a replacement or a full refund if the dealer can't repair the vehicle or covered system after a reasonable number of tries.
  • You only have to tell the dealer that warranty service is needed to get it, unless the dealer can prove that it is reasonable to require you to do more.
  • Implied warranties have no time limits.

If any of these statements doesn't apply, the warranty is limited.

A full or limited warranty doesn't have to cover the entire vehicle. The dealer may specify that only certain systems are covered. Some parts or systems may be covered by a full warranty.

Warranty Documents

Make sure you get a copy of the dealer's warranty document if you buy a car that is offered with a warranty. Review it carefully to determine what is covered. The warranty gives detailed information, such as how to get repairs for a covered system or part. It also tells who is legally responsible for fulfilling the terms of the warranty. If it's a third party, investigate their reputation. Look up reviews online.

Unexpired Manufacturer's Warranties

If the manufacturer's warranty still is in effect, the dealer may note that in the "systems covered/duration" section of the Buyers Guide. To make sure you can take advantage of the coverage, ask the dealer for the car's warranty documents. Verify the information (what's covered, expiration date/miles, and necessary paperwork) by calling the manufacturer's zone office. Make sure you have the VIN when you call.

Service Contracts

A service contract is a promise to perform (or pay for) certain repairs or services. Although a service contract is sometimes called an extended warranty, it is not a warranty as defined by federal law. A service contract may be arranged any time and always costs extra; a warranty comes with a new car and is included in the original price. Used cars also may come with some type of warranty coverage included in the sales price. The separate and additional cost distinguishes a service contract from a warranty.

To decide if you need a service contract, consider:

  • whether the service contract duplicates warranty coverage or offers protection that begins after the warranty runs out. Does the service contract extend beyond the time you expect to own the car? If so, is the service contract transferable or is a shorter contract available?
  • whether the vehicle is likely to need repairs and how much they're going to cost. You can determine the value of a service contract by figuring whether the cost of repairs is likely to exceed the price of the contract.
  • whether the service contract covers all parts and systems. Check out all claims carefully. For example, "bumper to bumper" coverage may not mean what you think.
  • whether a deductible is required and, if so, the amount and terms.
  • whether the contract covers incidental expenses, like towing and rental car charges while your car is being serviced.
  • whether repairs and routine maintenance have to be done at the dealer.
  • whether there's a cancellation and refund policy for the service contract, and if it has cancellation fees.
  • whether the dealer or company offering the service contract is reputable. Some dealers sell third-party service contracts.

If you buy a service contract from the dealer within 90 days of buying a used vehicle, federal law prohibits the dealer from eliminating implied warranties on the systems covered in the contract. For example, if you buy a car "as is," the car normally is not covered by implied warranties. But if you buy a service contract covering the engine, you automatically get implied warranties on the engine. These may give you protection beyond the scope of the service contract. Make sure you get written confirmation that your service contract is in effect.

An Independent Inspection Before You Buy

It's best to have any used car inspected by an independent mechanic before you buy it. For about $100, you'll get a general indication of the mechanical condition of the vehicle. An inspection is a good idea even if the car has been "certified" and inspected by the dealer and is being sold with a warranty or service contract. A mechanical inspection is different from a safety inspection. Safety inspections usually focus on conditions that make a car unsafe to drive. They are not designed to determine the overall reliability or mechanical condition of a vehicle.

To find a pre-purchase inspection facility, check the phone book under "Automotive Diagnostic Service," go online, or ask friends, relatives, and co-workers for referrals. Look for facilities that display certifications like an Automotive Service Excellence (ASE) seal, and search online for comments.

Ask what the inspection includes, how long it takes, and how much it costs.

If the dealer won't let you take the car off the lot, perhaps because of insurance restrictions, you may be able to find a mobile inspection service that will go to the dealer. If that's not an option, ask the dealer to have the car inspected at a facility you designate. You will have to pay the inspection fee. If a dealer won’t allow an independent inspection, you might want to consider doing business elsewhere.

Once the vehicle has been inspected, ask the mechanic for a written report with a cost estimate for all necessary repairs. Be sure the report includes the vehicle's make, model, and VIN. If you decide to make a purchase offer to the dealer after considering the inspection's results, you can use the estimated repair costs to negotiate the price of the vehicle.

Private Sales

Buying a car from a private individual is different from buying from a dealer.

  • Private sellers generally are not covered by the Used Car Rule and don't have to use the Buyers Guide. However, you can use the Guide's list of an automobile's major systems as a shopping tool, and you can ask the seller if you can have the vehicle inspected by a mechanic.
  • Private sales usually are not covered by the "implied warranties" of state law. That means a private sale probably will be on an "as is" basis, unless your purchase agreement with the seller specifically states otherwise. If you have a written contract, the seller must live up to the promises stated in the contract.
  • The car may be covered by a manufacturer's warranty or a separately purchased service contract. However, warranties and service contracts may not be transferable, and other limits or costs may apply. Before you buy the car, ask to review its warranty or service contract. Many states do not require individuals to ensure that their vehicles will pass state inspection or carry a minimum warranty before they offer them for sale. You can ask your state Attorney General's office or local consumer protection agency about the requirements in your state.

If You Have Problems

If you have a problem that you think is covered by a warranty or service contract, follow the instructions to get service. If a dispute arises, try to work it out with the dealer. Talk with the salesperson or, if necessary, the owner of the dealership. Many problems can be resolved at this level. However, if you believe you're entitled to service, but the dealer disagrees, you have some options:

  • If your warranty is backed by a car manufacturer, contact the local representative of the manufacturer. The local or zone representative is authorized to decide issues of warranty service and repairs to satisfy customers. Some manufacturers are willing to repair certain problems in specific models for free, even if the manufacturer's warranty does not cover the problem. Ask the manufacturer's zone representative or the service department of a franchised dealership that sells your car model whether there is such a policy.
  • Contact your state Attorney General or the American Association of Motor Vehicle Administrators.
  • You might consider using a dispute resolution organization if you and the dealer are willing. Under the terms of many warranties, this may be a required first step before you can sue the dealer or manufacturer. If you bought your car from a franchised dealer, you may be able to seek mediation through the Automotive Consumer Action Program (AUTOCAP), a dispute resolution program coordinated nationally by the National Automobile Dealers Association and sponsored through state and local dealer associations in many cities. Check with the dealer association in your area to see if they operate a mediation program.

If none of these steps is successful, small claims court is an option. Here, you can resolve disputes involving small amounts of money, often without an attorney. The clerk of your local small claims court can tell you how to file a suit and the dollar limit in your state.

The Magnuson-Moss Warranty Act also may be helpful. Under this federal law, you can sue based on breach of express warranties, implied warranties, or service contracts. If successful, consumers can recover reasonable attorneys' fees and other court costs. A lawyer can advise you if this law applies.

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If you're not living in a big city in the U.S., chances are you're going to need a car to get around. If you don't know if you will need a car during your internship, be sure to check before you arrive. Ask your employer what the local public transportation is like, and whether they recommend purchasing a vehicle. That way, you will know ahead of time if you need to get a car and won't be stranded when you get here.

If you do decide you will need to buy a car, you must first make sure you are eligible to drive in the United States.

Step One: Getting a Driver's License

If you wish to drive a car in the United States, you must have a Driver's License. If you have a license from your home country, this may be acceptable if the document is also written in English. However, if it is not, you have two possible options.

If you already have a license from your home country, the first option is to get an International Driving Permit (IDP) before you leave. An International Driving Permit translates information contained on your driver's license into 10 languages so that officials in foreign countries are able to read your license. While an IDP will supplement a valid government-issued license, it is not a replacement for a license. You must have both an official license and an IDP if you wish to drive in the United States and carry both with you when driving. If a law enforcement official asks to see your license for any reason, you will need to show both the IDP and your foreign license. Please note that the U.S. does not issue IDP's to foreign visitors, so if this is something you want to obtain, you will need to do so before arriving in the United States.

The second option is to apply for a United State's Driver's License once you arrive. This can be a complicated process. Luckily, the Student Exchange Visitor Program (SEVP) has provided these tips to help you understand what you will need to do:

  • Contact InterExchange Career Training USA within 10 days of arriving in the U.S. to activate your SEVIS record.
  • Wait at least two business days after your SEVIS record has been activated AND at least 10 days after your actual arrival in the U.S. before applying. This will ensure enough time for your information to be processed through SEVIS and other U.S. Government databases so that the Department of Motor Vehicles (DMV) can access it.
  • Know what you are applying for and if you are eligible. Visit the DMV website for the U.S. state in which you are living for more information.
  • Check your forms. Check to make sure all of your forms are correct when you apply for a license. Data integrity is very important because if there is an error on your paperwork, it will cause delays in your application process. Make sure that your Form I-94, Form DS-2019, and SEVIS record are each correct.
  • Bring all of your paperwork. When you go to your local Department of Motor Vehicles (DMV), please remember all of your paperwork. For most states, this includes:
    • Form DS 2019
    • Form I-94
    • Passport (with visa)
    • Proof of legal presence or residence. What this document is varies from state to state. Check with your state's DMV to see what they require.
    • Social Security Number (SSN) or a Social Security Administration (SSA) Form SSA-L676, "Refusal to Process SSN Application." Please visit the SSA website for more information.
    • Any other documents or information indicated on the DMV website

This process can take one or two months, so make sure to find a different means of transportation while you try to get a license. For more information, download the DMV fact sheet.

Step Two: Getting Car Insurance

While you may give the dealer money to purchase a car, they will not let you drive it out of the lot without proof of car insurance. You cannot drive a car in the U.S. without insurance. If you are caught driving uninsured, you will be ticketed and fined. Car insurance is meant to protect you against the losses that could occur with a major accident or theft. You will need to research different companies and compare prices to make sure that you are getting the best rate for your insurance needs. ConsumerReports.org has a great resource page that explains what different types of coverage exist and gives some money-saving tips. It also has links for sites where you can compare various insurance providers. For more information on how to select the best car insurance for you, click here. (Please note: The Accident and Sickness insurance you have through InterExchange is not car insurance.)

Step Three: Buying a Car

Now that you have a license and insurance, you can purchase a car. Doing your research before buying a car is very important. You must be sure that a car fits your needs and budget before you purchase it. First you should decide if you want to buy a used or new car. Used cars are normally much cheaper than a new car, but they do present more challenges. You will need to be willing to risk more car trouble and repair costs for a used car. Typically, the best place to find a used car is in the classified ads of local newspapers from individuals selling old cars. You can also go to dealerships or search online to find used cars. Before you buy a used car, make sure to get all the information on the car's history. This includes the number of previous owners, if the car was ever in an accident, any previous mechanical problems, and the maintenance history of the car. Sites like Carfax can help you find this information. Normally, anyone selling a used car will also allow you to take it to a mechanic for an inspection or "diagnostic check." This will make sure that the car is in good condition.

If you choose to buy a new car, different dealers will have different prices. You will need to decide what options and special features you will want installed in you car, if any. Make sure to compare different prices and options, and get advice from experienced car owners. Do not always trust the salesperson at the dealership, since they are probably more interested in making a profit than figuring out what is best for you. Do your research before you go to the dealership so you will not be taken advantage of. Buying a new car can be a negotiation, so you need to be prepared with all the facts so you can get the best deal. Again, ConsumerReports.org has another very helpful resource about buying a new car at the best price. Click here to learn more about bargaining and negotiating with the dealer.

Step Four: Registering Your Car

So now you have a license, insurance and car; there is still one last step you need to take before you can legally drive your vehicle in the U.S.: registration. All states in the U.S. require that a car be registered. If you are caught driving an unregistered vehicle, you will be fined or ticketed. If you buy a used car, you must still register it, even if it was registered under a previous owner.

Registration is the documentation that proves you have paid the registration tax and fees on your motor vehicle. In most states, this consists of a metal license plate, a validation decal, and a registration certificate. Most states also have a deadline for when a car must be registered after it has been purchased. You should research and find out how much time your state allows. This can be as little as 10 or as many as 30 days after you buy your car, so make sure to check. You will also need to check with your state's DMV to figure out what paperwork you will need to register your car.

Once you collect all the documents you need, you can go to your local DMV or tax collector's office and submit the registration application. They will then issue you the metal license plates or paper temporary plates that prove your car is registered. If you are going to be in possession of this car for over a year, make sure you also know when you need to renew your registration. In most states you are required to renew your registration and insurance every 12 months.

After you have registered your car, you are all set to drive in the U.S!

Plan B: Renting a Car

For those of you who do not need a car everyday, a good option is to rent a car when you need one. If you decide you want to get away for the weekend or perhaps explore some of America's scenic drives, then renting a car for just a few days is probably your best bet. Just like buying a car, you will want to do your research and compare prices at different rental agencies to make sure you get the best price on a rental. Many big cities also have car-sharing programs like ZipCar that will allow you to get a car for a few hours if you need one. The nice thing about renting or sharing a car is that most companies will provide car insurance to their customers, and you do not need to worry about registering the vehicle. As long as you have a valid license, then you should be eligible to rent or share a car.

We hope this has given you a better understanding of how to drive and get a car in the United States. For more information, check out some of these websites:

http://www.usa.gov/Topics/Foreign-Visitors-Driving.shtml

http://www.consumerreports.org/cro/cars/car-buying-advice/index.htm

http://auto.howstuffworks.com/buying-selling/car-buying3.htm

http://www.ehow.com/way_5758740_steps-registering-used-car.html

http://www.carinsurance.com/Articles/content187.aspx

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Buying a New or Used Vehicle

Internet car insurance discount courseAre you in the market for a new or used car? Or perhaps you are looking for a truck, SUV, van or motor home? You can save yourself a lot of money and problems by doing your homework, investing some time and paying attention to the important details. Please read on to learn how to be a wise and informed buyer.

Step 1: Prepare in advance

  • Research automotive and consumer magazines, sales literature and Internet websites for information on product quality, reliability and performance.
  • Attend an auto show to look at vehicles for appearance, size, controls and features.
  • Test drive the makes and models of the vehicle that interest you to check performance and make sure you like them. (DON’T bargain or negotiate at this point.) You can even rent a car for one day.
  • Read consumer magazines, pricing services and websites for pricing information, trade-in values and negotiating tips.
  • Determine how much you can afford to pay, based on the total cost of the vehicle - taking into account sales tax, interest rates and the length of the loan. Many loan calculators or amortization tables are available online. Be sure to include any rebates and the trade-in value of your current vehicle.
  • Consider whether you may be able to get more money for your trade-in by selling it yourself instead of trading it to the dealer, who might only offer you its wholesale value.
  • If possible, arrange financing in advance through your bank or credit union. If you don’t have a favorable credit rating and can’t prearrange financing, you may have to make larger down payments and pay a higher interest rate.
  • If you are “upside down” on your trade-in (you owe more on your car than it's worth as a trade-in), think carefully about whether now is the best time to buy another vehicle. Any amount you still owe on the trade-in will be included in the loan for your new purchase, and this might perpetuate the cycle when the time comes for your next trade-in. It may also subject you to less attractive lending terms or require the purchase of “GAP” insurance to protect the lender’s interests.
  • View advertising with a cautious eye. Pay careful attention to the exact wording of the ad before rushing to the dealership, and do not make assumptions. Look for fine print, asterisks, limitations or conditions to the offer. Remember: “If it sounds too good to be true, it probably is.”
  • Select two or three dealerships for comparison shopping, based on location, prior personal experience, recommendations of friends or relatives, and sales policies. (Does this dealership negotiate or haggle over the sale price or trade-in value? Are they a “one-price” operation with a fixed price for their vehicles?)

Websites with Product Information

  • www.autosafety.org (safety and mechanical defects, complaint history, class action information)
  • www.nhtsa.gov (safety defect and recall information, crash test results)
  • www.carfax.com (vehicle history reports)
  • www.autocheck.com (vehicle history reports)

Websites with Pricing and Negotiating Tips

  • www.carbuyingtips.com (negotiating and financing tips, plus many useful links)
  • www.edmunds.com (new and used car pricing, reviews and information )
  • www.kbb.com (new and used car pricing, reviews and advice)
  • www.nadaguides.com (new and used car pricing, other information, links)
  • www.ebaymotors.com (vehicle auctions, dealer links, comparison shopping)
  • www.autotrader.com (vehicle sales and auctions, comparison shopping, links)
  • www.carprices.com (new and used car pricing, loan calculators, research information)

Step 2: Shopping and negotiating

  • Take your time. Don’t be rushed or get caught up in “new car fever.” You’ll have to work to get a good deal, so be prepared to spend the necessary time and energy.
  • Don’t give in to pressure tactics. Do NOT sign a buyer’s order or place a deposit during negotiations. Do this AFTER you have comparison-shopped and decided what to buy. A dealer who really wants to sell you that vehicle should be willing to hold the offer open for a day or two while you compare and decide.
  • Check out the vehicle thoroughly. This is very important, because all vehicles are sold AS IS unless otherwise specified in writing. “As is” means NO warranty, and verbal promises may not apply. Unless you have a specific written promise or purchase a service contract, the seller may not be liable for any problems the vehicle has, or for any repairs it may need, once you sign a purchase agreement.

For a new car, you should not only take it for a test drive, but also do a thorough walk-around inspection and ask plenty of questions about anything unusual (such as more than 50 miles on the vehicle, or claims that the car was a demonstrator or executive car.) Since dealers are not required to disclose prior damage, even on new vehicles, unless the damage exceeds a certain dollar threshold, be sure to inquire specifically about any prior damage.

For a used car, additional steps are recommended, including a check of the vehicle’s history and a professional examination by a qualified mechanic or body repair technician. Some online services check official records for a fee and will generate a report on the vehicle’s accident history or prior odometer mileage readings. (Read about Odometer Fraud.) Pre-purchase inspection services that professionally examine and road-test vehicles at a cost of about $100 are increasingly common, and many mechanics, service centers and body shops will also inspect cars for a reasonable price.

  • Pay attention. Stay focused on the details of what the seller is offering or proposing. Ask follow-up questions such as, “Does that price covers everything, including rebate, sales tax and dealer fees?”
  • Separate the deal into key parts. Keep the main components distinct, so that you can consider and maintain your options. Negotiate 1) the purchase price, 2) the trade-in value and 3) the financing or monthly payments, separately and in that order. Then you can choose whether to trade your old vehicle or sell it yourself, and whether or not to finance through the dealer.
If you do not discuss these items separately, confusion can result, as changing one item may also change others. For instance, the monthly payment amount may go down, but the contract is changed from a purchase to a lease; the trade-in amount may be increased, but the purchase price also goes up; or the monthly payment goes down, but the interest rate and length of loan are extended.

Step 3: Closing the deal

  • Be sure before you sign! Unlike some other purchases, there are few remedies for car-buyer’s remorse (that is, changing your mind). Contrary to a popular rumor, there is no cooling-off period or statutory right to cancel a vehicle purchase contract, and in fact very few dealers will agree to allow you to cancel. In essence, once you have signed the contract, you have bought the vehicle, even if you haven’t yet driven it off the dealer’s lot.
  • Get it in writing. Price offers or verbal promises have little or no value if they are not put in writing. Be aware that a buyer’s order usually states that the dealership is not bound by a price quote even if it is written, unless it is signed by a manager rather than a salesman. Also, most contracts state that the dealership is not responsible for any verbal promises or representations not included in the contract itself. Make sure that all such promises, including items or options to be delivered later, are put into the contract before you sign it. This might include floor mats, striping, a stereo/audio system, an alarm system, or special wheels or tires.
  • Don’t buy what you don’t want or need. Additional options (such as paint sealants, additional undercoating, fabric treatments, anti-theft parts etching, and alarm and navigation systems) and additional services (such as extended warranties or service contracts, routine maintenance packages, credit life or credit disability insurance) do have value but, like any other item, they should be comparison-shopped and carefully considered. Be especially wary if the dealership tells you all their cars must have paint sealant or etching applied, or that a service contract can only be obtained at the time of purchase.
  • Read every document before you sign. Unfortunately, most people don’t follow this advice, but it is the best way to avoid problems, especially concerning the terms of the deal or special promises or considerations.
  • Don’t take delivery of the vehicle until your financing is approved. (See Say No to Spot Delivery.)
  • Get copies of the most important documents before you leave. Don’t wait for them to be sent by mail. Ask for copies of your buyer’s order or bill of sale, any finance agreement, Lemon Law Rights Statement (for a new vehicle) and the odometer mileage disclosure form.

…and finally, when you have followed all of these tips and purchased your new or “like-new” vehicle, enjoy your pride of ownership, and please drive carefully!

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