Buying A Car Help

Buying a rebuilt-but not properly repaired-wreck of a car could wreck your finances.

A new study by AutoReputation.com shows that millions of cars severely damaged in major accidents have been rebuilt and are up for sale. Over the last five years, the number of salvaged cars on the market has increased nationwide by more than 50 percent.

This problem is more widespread than previously thought. Forecasters predict that more than 40 million used cars will be purchased this year, making the used-car market a target-rich environment for scam artists.

Experts estimate that more than 5 million cars annually are deemed salvage after severe accidents. More than half of these cars are resold, many by sellers who intentionally hide their damaged past.

Some of the common problems associated with previously wrecked vehicles may include:

• Title washing.

Title documents may be altered to remove a salvage brand and obtain a clear title from another state.

• Air bag fraud.

Scam artists are known to replace deployed air bags with phony or nonworking air bags to cut costs.

• Structure/frame damage.

As little as 8mm can compromise a car’s structural integrity, which may also affect many of the car’s safety features
.

• Odometer rollbacks.

The odometer may also be rolled back to further inflate the perceived value of the vehicle.

• Car clipping.

Some rebuilt wrecks are actually two different cars welded together.

Buying a salvaged car may not be a bad investment, but you must make sure you’re aware of any prior damage and, more important, see that the proper repairs were made. Many salvage vehicles are rebuilt properly and will run safely again.

However, con men can alter title documents and make cheap cosmetic repairs to others so they look as good as new on paper and in person.

The right answer to the question “Should you keep the car or trade it in for a brand-new vehicle?” could help put many motorists on the road to economy. So when you choose to keep your car rather than buy a new one, you’ll end up saving money.

“People who keep their cars, treat them as valuable investments and commit to regular vehicle maintenance end up saving a lot of money,” said Rich White, executive director, Car Care Council.

The most common maintenance procedures and repairs to keep your car operating safely and reliably while maintaining its long-term value involve checking the oil, filters and fluids, the belts and hoses, brakes, tires and air-conditioning. The council also recommends an annual tune-up and wheel alignment.

Over a four-year period, the difference in savings between keeping a car and buying a new one is $10,894, according to Runz-heimer International.

Cost Of Keeping The Old One

The cost comparison identified the expenses of keeping a 2003 six-cylinder, four-door sedan that gets 21 miles per gallon (mpg) and costs $19,727, versus buying a new six-cylinder, four-door sedan with 23.5 mpg that costs $23,451 and had a down payment of $10,158, the trade-in value of the older car.

At the end of four years, expenses on the used vehicle, including fuel, license, registration, taxes, insurance, maintenance and tires, were $16,548. A resale value of $3,759 puts the total four-year cost at $12,789.

New Car Costs

On the new car, expenses including the car payment, interest on the car loan, fuel, license, registration, taxes, insurance, maintenance and tires totaled $32,258. A resale value of $8,575 puts the total four-year expense of the new car at $23,683.

“We advise our clients that if they want to see an increase on their investments every year, they need to cut down on their expenses,” said Terry Mulcahy, vice president of investments for R.W. Baird in Mequon, Wis. “A new automobile is for most people their second-biggest investment next to a home, so a great way to save money and increase financial assets is to hang on to their current vehicle rather than buy a new one every few years.”

The Car Care Council is the source of information for the “Be Car Care Aware” consumer education campaign promoting the benefits of regular vehicle care, maintenance and repair to consumers.

For those in the market to buy a used vehicle, there is definitely some homework to be done. Online price comparisons, vehicle ratings, personal inspections, professional inspections and vehicle history checks are all critical parts of the process.

Despite all this information gathering, however, even the most savvy and educated used car buyers can sometimes fall back on folklore passing as common wisdom about what is or isn’t a good purchase. Unfortunately, myths and assumptions can keep people from choosing the vehicle that is truly best for them.

For instance, most everyone is drawn to the idea of a car that was owned by another person – someone like them. However, when many used car buyers happen upon a former rental car, it typically sends up a red flag. But should it?

According to research from Experian Automotive, being a former rental car is not necessarily a negative for potential buyers. Short-term rental cars tend to have been through strict maintenance regimens, which can help ensure their longevity even though they may be driven harder than non-rental vehicles.

Another common misconception is that cars with only one prior owner are automatically better than similar vehicles that have had more than one owner.

Though farfetched, the notion of a car owned only by some sweet elderly woman whose commutes were restricted to church and the grocery store remains appealing and sought after. However, Experian’s vehicle history research shows that unless a vehicle is 8 years or older, the number of owners isn’t a major factor in the vehicle’s projected longevity.

Other people avoid buying used cars from the “saltwater states” bordering the ocean, or those that may have often been driven on bumpy, unpaved roads. Geography, in fact, has little to do with the longevity of a used vehicle. Whether a vehicle was used on highways or rural routes, in icy, northern winters or balmy, southern summers, statistics show that location has no material bearing on the projected longevity of the car.

Cars having been through a wholesale auction are also frequently seen as less favorable. But these auctions are and have been a common way for used car dealers to find vehicles for their lot or to eliminate excessive inventory. Many times vehicles at auctions are fresh off a lease – usually meaning they are only slightly used with relatively low mileage – which statistics show is a definite positive for potential buyers.

A new feature of Experian’s AutoReputation (www.AutoReputation.com) called the AutoReputation Score takes statistical analysis of millions of vehicle histories and compares that to an individual used car you may be considering. Like a credit score, it produces a numeric summary for that specific car based on dozens of factors in that vehicle’s past, and compares it to the scores of similar vehicles. It’s the picture of a vehicle’s history based on real research, not on myths and guesses.

“There is no safe or sane way to buy a used car or truck based solely on common myths or assumptions. Buy a vehicle history report that makes it easy to understand and compare a vehicle’s history. The best way to do this is to purchase a report with a score, which offers the quick and easy information you need to buy with confidence.”

Besides its age and odometer reading, the AutoReputation Score factors in reported events such as title and registration information, collisions, auction data, the vehicle’s emission history, whether it’s ever been repossessed or stolen, whether the vehicle has ever been a government car, police car or taxi and whether it’s ever been leased. The AutoReputation Score does the analysis, helping you easily understand what a vehicle history report really says about that used car and buy with more confidence.

New car prices have certainly changed a lot over the years. While obviously inflation, the cost of energy and a number of other causes have caused automobile prices to skyrocket when compared to the 1970’s, there are also some changes in attitude from automakers which are reflected in modern pricing schemes.

Imagine the year is 1971. Walking into the new Dodge dealership, you see a brand new Charger R/T coupe, which was one of the definitive muscle cars of the era. The price? $4700. A similarly configured Charger, brand new from Dodge today in 2008 will cost in the neighborhood of $30,000. This represents a fairly significant increase. What are some of the factors that caused new car pricing to multiply six-fold?

Inflation only tells half the story. Adjusting that $4700 from 1970 into today’s dollars gives us a price of roughly $21,000. That still leaves us around $9000 short of the current market price for a similar car.

The difference becomes even more pronounced when examining median household income in the United States. In 1970, it was around $35,000 (in today’s dollars), but for the last few years it has stabilized around $42,000 – not a huge increase, and certainly not large enough to explain the discrepancy in pricing. It’s not as simple as saying that car companies now charge more for their vehicles because the market can bear higher prices.

One of the most telling components of new car prices are the increased cost of labor. In the 1980’s and 1990’s, American automakers fought a losing battle against trade unions representing the workers in their plants. The result of these confrontations were increased costs not only in the salaries paid to workers, but also in the benefits that workers were entitled to. In some cases, these benefits are paid out long after the employee has left the assembly line and is no longer economically contributing to the company. General Motors actually loses money on many of the cars they sell, and for a long time only generated profits based on their automobile financing company.

Japanese car companies don’t have these same labor issues, yet their pricing remains competitive with domestic car companies. This indicates that employee costs are not the only driving factor when it comes to car price increases. The implementation of technology is another part of the pricing puzzle.

Cars of today are technologically advanced over those of three decades ago to an almost extreme degree. Anti-lock brakes, airbags, stability control systems, drive-by-wire – all of these features were expensive to develop in terms of research and testing, and they also contribute to increased manufacturing costs, due to the more delicate techniques and expensive materials required to implement them in modern vehicles. The increased demand for fuel efficient engines which produce minimal emissions has also forced automakers to invest in their engine programs to a much larger degree than they have in the past.

It seems that peeling back the surface of today’s automobile pricing reveals an intricate web of dependent financial concerns that together make up the cost of driving a brand new car in the United States.

First-time buyers account for a third of all-terrain vehicle sales each year. As with any major purchase, a little education can go a long way towards helping you get the best possible deal for your money.

Polaris Industries, a leading manufacturer of ATVs, offer the following advice when you’re making your first ATV purchase:

* Consider the age and experience of the ATV’s primary rider.

ATVs come in all shapes and sizes. It’s important to match the right features with the rider for a more enjoyable ATV experience. Is the rider a youth, beginner adult or adult with other power sports equipment experience? There are vehicles on the market available for children as young as 6, and machines built to be raced by professional adult riders. Be sure to not overdo it on your first purchase. There’s always the option to upgrade power and performance down the line.

* Weigh how the ATV will be used.

ATVs, generally, can be broken into two separate categories — sport or utility. Sport quads, such as the Polaris Outlaw, have a sportier look and feel, and are more suited for recreational or high-performance riding. Utility ATVs, such as the Polaris Sportsman XP, usually are larger and capable of carrying loads, towing, plowing and performing other tasks. Some machines combine a mixture of these attributes.

* Consider the terrain where you’ll be riding.

Will it be hard-packed trails, fields, mud, sand or steep hills? If you will be riding mostly on tough terrain such as deep mud or steep hills, a four-wheel drive ATV, with its enhanced traction, would probably be better suited and make for a more enjoyable riding experience. For regular trails and field riding, a two-wheel drive vehicle would probably suffice. If riding in highly rutted or rocky terrain, an ATV with electronic power steering might be the best bet to help reduce handlebar feedback and rider fatigue.

* How many riders will your ATV need to carry?

ATVs such as the Sportsman Touring models are specifically designed to carry a driver and passenger for double the fun. Known as “2-Up” ATVs, they are perfect for leisure riders or families that want to enjoy the great outdoors together.

* Are you prepared to play safely?

Safety is always an important consideration when purchasing an ATV. Enrolling in a safety training course before making a purchase will get you acclimated to riding an ATV. The ATV Safety Institute offers safety courses nationwide to help you become a more safe and aware rider.

* Finally, how much do you want to spend?

There is an ATV available to fit virtually any pocketbook. It is important to research the various features available to find a machine that fits your budget, riding style and experience. Entry-level ATVs, usually around 200 to 300ccs, offer features needed for the first-time buyer and are easy on the pocketbook, starting around $3,000. Skilled riders looking for more power might opt for a mid-sized engine (400 to 500 cc) with models starting around $5,000. For heavy-duty work or riding, most manufacturers offer ATVs with 800 cc and bigger engines starting around $7,500.

Keeping in mind these considerations and doing your research will ensure a smooth purchase and even smoother ATV riding experience.

Car financing is a complicated subject. It seems that everyone has a different opinion on the best methods or strategies for financing such a large purchase should be. It can be hard to know how big a monthly payment is too big, how much of a down payment is too small, and where in between the sweet spot lies for most car buyers.

A common mistake when financing a car is to look at the size of the monthly payment instead of the actual cost of the car itself. It can be tempting to go for a car that has more luxury features or a bigger engine simply because it is offered with a monthly price that you can afford. This kind of payment focus can lead you to overspend your budget by a huge amount – sometimes five to ten thousand dollars more than you initially intended to pay.

Dealers tend to encourage monthly-payment oriented thinking because from their perspective, the longer you are making payments on your car, the more money they can make from administrative fees and interest. Instead of taking 3 years to pay off your car, you might now be looking at 5 years and close to double the amount of interest paid.

It’s also important to take a close look at the details of any payment plan that is offered to you to make sure that the terms, interest rate and period are competitive with that which you could get from your bank. Sitting down with a calculator and determining the real cost components of any monthly payment plan you have been offered will give you the real picture of exactly where your money is going.

Down payments are another gray area. There are those who recommend making the largest down payment that you can afford on your vehicle – typically around 20 percent, although some say as much as half – in order to avoid the interest costs associated with financing. However, an equally vocal contingent will warn buyers against making any cash down payment at all before a deal is inked. In some cases, if dealers walk away from the bargaining table they can take your down payment with them if a contract hasn’t been signed. If you must make a down payment or deposit on a car to get priority at a dealership, try doing it with a credit card so you can get your money back if things turn sour.

With all of these warnings, caveats and traps to look out for, it can sometimes make it seem like car financing is a complete nightmare. That doesn’t have to be the case. As long as a buyer is completely informed about what is happening with regards to their financing, and as long as the negotiation process, fees and interest rates are completely transparent and spelled out on paper, then there is no reason to fear financing this major purchase. Financing can help you manage your cash flow and keep you from tying up all of your resources in a single asset – making sure you will be prepared to deal with any unexpected financial issues that life may throw at you. No one wants to have to sell their car due to hardship, and with the right financing, it doesn’t have to happen.

When searching for a new vehicle, car-shoppers often consider fuel-economy, exterior and interior features, and price. Shoppers should also consider something they won’t find on any window sticker: resale value. Depreciation often is the greatest expense incurred by drivers during ownership, so knowing the vehicle brands and models with the best projected resale value can help new-car shoppers make a more informed purchase decision.

The leading provider of new- and used-vehicle information, AutoReputation.com, announced the all-new 2009 model-year vehicle winners of its annual Best Resale Value Awards, which recognize current and upcoming vehicles for their projected retained value five years from now (the average ownership period).

Vehicle shoppers should take several factors into consideration when buying a new car to ensure as much future value as possible. First, car-buyers should choose a popular exterior color such as silver or black. Then, car-buyers should choose optional equipment that is customary for the type of vehicle they are buying. Equipment and options that are popular with used-vehicle buyers include antilock brakes (ABS), alloy wheels, audio system with MP3/iPod compatibility, power-operated leather-covered seats, cruise control, remote locking and navigation system. Car-buyers should also recognize that the cost of some potentially expensive features like premium audio systems will be difficult to recover at trade-in or resale time.

“Especially in today’s tough market and difficult economy, consumers really need to take a hard look at the projected resale value of a car when choosing their next new vehicle purchase,” said Jack R. Nerad, executive editorial director and executive market analyst with AutoReputation.com. “Choosing makes, models and options wisely now can help new-car shoppers keep additional money in their pocket down the road when they go to sell or trade in the vehicle used.”

Understanding your financing options could put you in the driver’s seat when it comes to buying a new vehicle-or affording the one you already have.

Still, a recent survey found that many borrowers facing difficult financial circumstances are not aware of the ways that their creditor can help get them back on track. Indeed, only 47 percent of consumers believe that finance companies often work to help customers who are having trouble making payments.

“Consumers have many options available to them when it comes to auto financing. Similarly, if consumers are facing a tough time financially, we encourage them to work with their creditor,” said Eric Hoffman, a spokesperson for AWARE (Americans Well-informed on Automobile Retailing Economics), a nonprofit auto financing education group. “Being an educated consumer not only helps when it comes to financing a vehicle, but also when times are tight.”

AWARE sponsored the survey, which measured consumers’ auto financing knowledge and experience. Additional findings include:

• Consumer satisfaction with auto financing remains high while interest and desire to learn more about the financing process has held steady-despite the sluggish economy.

• Even with a slowdown in auto purchases, consumers-especially those who report to be educated about auto financing-say they are satisfied with their financing decisions and the outcome of the process.

But Hoffman said more work clearly needs to be done. “Despite auto financing education
efforts through AWARE, as well as individual company programs, the survey demonstrates more robust education efforts need to be put forth for consumers facing economic hardship,” he explained.

To that end, the group was formed to build a greater understanding among consumers about how auto financing works. To learn more, visit www.CarLoanFinances.com. The site was created to ensure that potential buyers of new and used autos have the tools and resources they need to successfully navigate the auto financing process.

Protect yourself from digital odometer fraud when you’re buying a used vehicle.
When looking at a used car, one of the first things consumers ask about is the mileage. After all, a vehicle with 40,000 miles on the odometer is much more desirable than one that’s logged 80,000 or more.

Perhaps, then, it is not surprising that a growing number of sellers are trying to “turn back time” on their cars and trucks, changing the mileage to a lower reading that artificially inflates the resale value.

New research results from AutoReputation.com show that the number of cars with rolled-back odometers has increased 57 percent nationwide over the last four years. For that reason, used-car shoppers everywhere need to take every precaution to avoid becoming a victim of this rampant scam.

According to NHTSA, more than 450,000 cases of odometer rollbacks were reported in 2002, but that number is likely much higher today. Why? Experts believe digital odometers, used in the majority of vehicles built nowadays, are easier to manipulate. Plus, there’s virtually no physical evidence of tampering.

BuyingACarHelp.com offers car buyers these helpful tips to avoid buying a rolled-back car:

• Demand a Carfax Vehicle History Report from the seller;

• Examine the wear on the pedals, steering wheel, floor mats, etc. to make sure they are consistent with the mileage reading; and

• Have a trusted mechanic check the car’s computer and inspect the vehicle thoroughly prior to purchase.

“Odometer fraud is alive and well,” said communications director at AutoReputation.com. “Con men continually find ways to cheat the system, especially in a soft economy like this, and digital odometers are no exception. We cannot stress enough that consumers need to utilize every resource available to help protect them, starting with a AutoReputation.com Vehicle History Report. Simply asking the seller for a AutoReputation.com Report and questions about the car helps separate the good guys from the bad guys.”

Incentive packages make buying a new car almost irresistable to but there are some very important credit report and financial questions you should consider before you visit that car dealer.

(ARA) – Auto sales plunged to a 26-year low at the beginning of the year, which is why many car makers are offering incentives to entice consumers back to the auto market.

But before jumping into the market, you should gain a clear understanding of your credit and financial profile to know what you qualify for and if it’s the right time for you to buy a car.

“Through a simple check of their credit reports and scores, many consumers are likely to find that they’re in a solid position when it comes to cashing in on these troubled-economy car deals,” says Lucy Duni, vice president of consumer education at TrueCredit.com by TransUnion. “At the same time, it’s important for consumers to set their limits based on their credit position and their overall finances, because there are many costs associated with making a car purchase, including regular maintenance fees and insurance.”

TrueCredit.com is offering simple tips to guide consumers on the road to making a smart car purchase:

Tip 1: Rev-up your report knowledge.

Review your credit report on an ongoing basis to ensure it accurately reflects your credit history. Your history will dictate your credit score and your score affects your loan rates. Always know where you stand by signing up for a free application that is downloaded to your desktop and lets you know when there’s been a critical change to your report.

Tip 2: Make necessary tune-ups.

Whether or not you’re in the market for a new car now, keep a close eye on your credit report. If you spot something that doesn’t look right, you should first contact the creditor involved. If that doesn’t solve the problem or if the issue doesn’t involve a specific credit or loan account, contact the appropriate credit-reporting company directly. If you have significant issues with your reports, consider delaying your purchase until those issues are resolved to help you get the best rate available.

Tip 3: Protect Yourself.

Your credit behavior influences more than just your loan rate. It often plays a role in determining the monthly insurance premiums for your home and car. If you’re getting ready to shop for insurance, let you see ahead of time how you’ll likely be viewed, allowing you to take proactive steps to improve your own credit health that could result in lower premiums.

Tip 4: Make an age-defying purchase.

Decide if you want to buy a new or used car. Buying a used car can save you a heap of money if you do your research. Since new cars generally depreciate 10 to 35 percent during the first two years, it’s a good idea to check the depreciation rate on the car you’re interested in by looking up the current price and the price for the same car made two years earlier. On the other hand, many of the factory incentives are on new models, so you may get a better deal with a new car right now. It’s important to shop around to find the best deal for you.

Tip 5: Luxury vs. economy — calculate how much you can afford.

Before you decide that a car is right for you, it’s a good idea to evaluate your balance of debts and assets to see how much you can really afford. Also determine if you have a trade-in or down payment to help you pay for the car. These assets can help you negotiate a better rate with lenders and can be especially important if you have problem credit.

Tip 6: Navigate your options.

When you’re ready to talk to lenders it’s a good idea to shop around for the best available interest rate. Visit your local bank or credit union to discuss applying for an auto loan. Financing with the car dealer can sometimes be more expensive, so pricing out your options is a good idea. And don’t worry. Shopping your loan with multiple lenders over a several weeks will generally have the same net effect on your credit reports as checking only with one lender.