CHAPTER 13
Where to Buy a Car
Just as there are lots of places to shop for car loans, there are lots of places to shop for cars. And where you buy can help you SAVE BIG. I’m sensitive to the fact that most of us also want to save time. So first I’ll lay out the pros and cons of the places where you can get a car fast—used car superstores, new car dealers, and used car dealers. Then I’ll tell you where to get your used car for even less—namely from an individual or an auction.
In this chapter, learn to SAVE BIG by:
• Shopping at a used car superstore first.
• Getting a certified used vehicle at a new car dealer.
• Avoiding bogus used car warranties.
• Skipping small used car lots.
• Taking the extra savings you get by buying from an individual owner.
• Attending a wholesale auto auction.
Getting a Used Car Fast
Congratulations. Just by choosing to buy a used car you are going to SAVE BIG. Now you need to decide if you want to whittle that price down even further. It could be that at this point speed is more important to you—the speed of the search, silly, not the speed of the car! If that’s the case, superstores and dealerships are your best bet.
Superstores
One place to shop for cars is at a used car superstore. I like to begin at a superstore like Carmax because you can test drive lots of different makes and models all in one spot. It’s fast and efficient when you’re still at the stage where you’re honing in on exactly which type of vehicle you want. I’m not saying you will necessarily buy at Carmax, but it’s a handy place to start.
Carmax prices probably are not the very best you can get. The superstore has a fixed rate, no haggle policy. The price you see on the window sticker is the real deal. You can most likely snag a lower price if you bargain expertly at a regular dealership. However, many people hate to haggle and appreciate the low-key atmosphere. Remember, you’re already saving thousands by buying used, so if you fail to save a couple hundred more by bargaining, that’s your choice.
Just don’t forget that even though they call it a “store” and the salespeople wear polo shirts instead of shiny suits, Carmax still sells used cars. You must make sure the one you choose is in good shape. More on that in Chapter 14.
New Car Dealers
The other easy option for buying a used car is a new car dealership, especially since they have their own in- house shops and can service the vehicle before they sell it. A quick tip: Deals are better at the end of the month, when they are trying to make quotas. So you may want to wait until then to walk into a new car dealership.
There are some great benefits to buying your used car at a new car dealership. For starters, new car dealers typically have first dibs on good used vehicles, as their (foolish!) customers trade them in for new ones every three years. Another bonus: The used car you’re looking at may have been serviced at the dealership. If it was, then you may be able to get copies of the service records, which can be a gold mine of insight into the car’s performance and any problems.
There are probably multiple dealers in your area that sell the same kind of car. One way to choose one is to check their reputations through the Better Business Bureau, at
www.BBB.org.
Don’t Be Put on the Spot by Spot Delivery
Many car deals are done on weekends when the finance company isn’ t open. So the salesman may send you home in a car even though he’s not really sure your loan has been approved. Days or weeks later you get a call demanding that you return the car. If you finance through the dealership, ask if it’s a done deal or a spot delivery. Just knowing the lingo will put them on notice!
Another benefit of buying at a new car dealership is that you might be able to get a certified preowned vehicle (don’t you just love that ridiculous euphemism?). This can be a particularly great deal for consumers who want the comfort of a written guarantee. Certification means the people at the dealership have checked the car out, made the necessary repairs to bring it up to standards, and will now stand behind it by extending the factory warranty.
The best certified vehicle programs give you at least 24 months and 24,000 miles worth of coverage. Don’t accept less. Yes, certified cars cost a bit more than other used cars, but again, you have already achieved your big savings by buying used. The website
www.Intellichoice.com rates car certification programs. Check it out.
Request Certification
If you are interested in a used car at a dealership and that car is not certified, you may be able to negotiate for the dealer to certify it in exchange for a slightly higher price.
One red alert: Never fall for a phony certification program offered by some outside company instead of by the dealership and vehicle manufacturer. It’s confusing because many dealers do sell these third-party certification programs to trusting consumers. To be sure that you aren’t getting a bogus certification, ask if the guarantee you are being offered is backed by the dealership itself or an outside company.
Used Car Dealers
Paradoxically, used car dealers are not a great place to buy used cars. I do not mean to malign an entire industry. It’s just a structural situation: Used car dealers typically get the less desirable used vehicles that new car dealers dump at auctions. Even if they are reputable, they can’t help it. They mostly sell the leftovers. Used car superstores like Carmax are the exception because they are so big that they are able to buy clean used cars in bulk. “Buy here, pay here” lots are in another category altogether. They’re in the business of selling predatory financing, not cars.
Getting a Used Car for Less
We all need to balance saving time with saving money. You’re already going to SAVE BIG by buying used. But you can SAVE BIGGER by buying from an individual owner or finding a way to attend a wholesale auction. You’ll need a combination of time and ingenuity to make this happen.
Buying from Private Owners
You can get a better price on a used car—some say 10 to 15 percent less—by buying from an individual vehicle owner. If you don’t have time to slog around the metropolis looking at individual cars, I understand. But this is one of the rare opportunities in life to save thousands all at once. Remember the used Lexus that we talked about in Chapter 11? Well, it was being sold by a dealer. What if we could find the same car in somebody’s driveway? We can. I just checked the classified ads, and look what I found:
Dealer Price versus Individual Price| 2006 Lexus GS300 from a dealership | $ 24,999 |
| 2006 Lexus GS300 from an individual | 21,249 |
| BIG SAVINGS = | $ 3,750 |
You can achieve a $3,750 savings by buying from an individual instead of a dealership. But there are some precautions that I urge you to take when you buy from a private owner. After all, the sellers don’t have a reputation to uphold like a business does.
Ask the owner if you can look at the record of the original purchase and all the service records. My husband and I once test-drove a used car that an individual was selling, and while he was driving, I pored over the service tickets. At the bottom of the stack were a bunch of records that showed the owner had had to take the car back to the dealer for the same serious repair again and again. That’s the definition of a lemon!
You must also take a look at the title before committing to the deal. You’re trying to avoid buying a car the seller doesn’t really have the right to sell you! Compare the name on the title to the name on the seller’s driver’s license to make sure they match. Also match up the VIN number from the dashboard with what is written on the title. If you see a bank listed on the title as the lien holder, you and the seller should call the bank together and verify how the loan is to be paid off.
Finally, write up a formal bill of sale and keep a copy for as long as you own the car. Pay for the vehicle with a cashier’s check instead of cash. That way there is a traceable record of your purchase if you run into trouble down the road.
Beware of Curbstoners
Curbstoners are illegal, unlicensed used car sellers who sell cars from the curb—or the strip mall parking lot. Curbstoners typically pose as individual owners and try to unload rebuilt wrecks. Investigators estimate as many as 80 percent of the cars for sale in the classifieds are sold by curbstoners. If you see the same phone number listed for several cars or the seller refuses to show you the title before making the sale, steer clear.
Auto Auctions
Probably the cheapest way of all to buy a car is to get a friend in the auto business to take you to one of the wholesale auctions. You’ll need this connection because only licensed dealers can buy at these auctions. They are not open to the general public. You can find out about them through the National Auto Auction Association,
www.naaa.com.
My husband is fortunate to have a friend who is a former car dealer and maintains his license. He once purchased a vehicle for us at one of the wholesale auctions. It was three years old and just coming off of a lease. I kicked and screamed because we were taking a risk since there was no way to have a mechanic check the vehicle out, but our friend is an old pro and he eyeballed the vehicle carefully before bidding on it. It’s been a great vehicle for us, which goes to show you how consistent today’s cars really are. Here’s how much money we saved:
Buying at a Wholesale Auction| Retail price | $ 23,300 |
| Auction price | 18,300 |
| BIG SAVINGS = | $ 5,000 |
One caution: Don’t confuse the big wholesale auctions with fake auctions. Some clever used car lots now call themselves “auctions” to generate excitement. They’re not. They’re just used car lots that sell people cars without letting them test-drive or inspect them first. Holley C. of Washington, D.C., has the worst car luck of anybody I have ever met. Her dad bought her a car at a fake used car auction and later learned it wouldn’t drive in reverse! The auctioneer had driven the car forward when it came up for a bid, and Holley’s dad had driven it forward right off the lot. Oops.
BIG TIPS
• Shop a superstore first so you can test-drive multiple vehicles.
• Buy a used car from a new car dealer if you are in a hurry and want certified preowned protection.
• Find out who is behind the extended warranty before paying for one.
• Buy from an individual and save another 10 to 15 percent.
• Try to find somebody knowledgeable who can get you into a wholesale auto auction.
