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Buying A Car

Precalculus 2015

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How to Buy A Car

• Research– Needs/Wants– Reliability– Safety

• Used Car Buying– Dealer or Individual

• New Car Buying– Finance– Lease– Cash

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What do you want? Afford?• Appearance• Reliability• Cost of Maintenance• Gas Mileage• Ability to impress my

friends• Cheapest price• Safety• Make of car (Toyota)

• Everything MUST work all the time

• Easy to park, learn to drive, etc.

• Lower anxiety about vandalism, theft, etc.

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Generalizations

• Japanese cars RUST but are typically more dependable. Repairs sometimes expensive.

• European cars are well designed but expensive to repair, more complicated. Complicated electrical systems are their death knoll. Motors and bodies last forever.

• American cars have numerous annoying faults, are not as well designed, but parts and repairs are readily available. These cars are usually more practical in design, and there are several that stand out as very reliable.

The Truth about “Economy Cars”Rank the following Cars:

Which one costs $141 to replace the water pump?Which one costs $624 to replace the water pump?

$46,000 MSRP

$18,000 MSRP

$10,000 MSRP

$33,000 MSRP

$322

$624!$545

$141!

Who would think that this car would have the most expensive repair ($624)?

Of the cars on the previous page, the Acura would have the highest rating for dependability…but @ $545 to replace the water pump…you might want to think again about purchasing one!

And who would think that you could replace a water pump on a $46,000 Cadillac for under $150?

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Economy vs. Reliability

• Economy– Bottom Line - How much $ is car to run? MPG

• Reliability– How often does car break?– A car considered reliable isn’t necessarily the

cheapest to drive– Lower miles on a car do not necessarily mean less

repairs

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Example

• If your car gets 20 mpg, gas costs $2.30/gallon and you work 30 miles away, how much will you spend on gas during your work week?

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Anticipating Repairs

• Tires• Battery• Exhaust• Struts/Shocks• ATF/Antifreeze

change• Timing Belt

Repairs 60 - 90k:

• Alternator• Water Pump• Air Conditioning• Automatic

Transmission

Repairs beyond 100k:

Sometimes a car with 100k on it is cheaper to drive than a

comparable vehicle with 60k on it

Why start with a cheaper car?

• Most new drivers are very nervous• Nervous drivers make mistakes• Mistakes cost $$$, raised insurance premiums

for years to come

~Thus, a cheaper car may help you have lessanxiety about driving and save you $$$

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Where To Start?

• Periodical Literature• Web sites; Governmental, Complaint sites,

Consumer Websites, Message Boards• The advice of mechanics, friends, relatives• Junk Yard

– What newer models are in there?

For Example…

This junkyard had 3 or 4 Mazda 626s in this condition…why are they there when they appear to be in great condition and only five to seven years old?

BAD transmissions!

Periodicals

• Consumer Reports– Provides:

• Reliable Surveys/Research• Which cars are the most dependable?• What new laws or recalls will affect me?• Complaints and Recommendations

– Does NOT Provide:• Costs of maintaining a vehicle• Costs of typical repairs

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Periodicals

• The Car Book– Provides:

• Predicts maintenance costs and charts total costs of ownership including depreciation, etc. Summaries of replacement costs for major and minor components on popular vehicles

• Estimates the costs for preventative maintenance as prescribed by the manufacturers of the new cars

• Complaint charts• Crash test results• Depreciation (Use this in your favor…you can

get a 3 year old car for 60% of its new price!)

The Car Book

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Website Results

• Search Engine• Lots of complaint web-sites, some profane

and not legitimate• Some helpful things• Some commercial sites, designed to make

money off all information they provide

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Useful Websites

• www.samarins.com • www.carsurvey.org/ • www.recalls.gov• www.dmv.org• www.nhtsa.gov• www.consumerreports.org• www.edmunds.com• www.kbb.com• www.youtube.com

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Used Car Buying

• Benefits– $$

• Drawbacks– No warranty– Reduced lifetime use of vehicle– Limited ability to determine previous care of

vehicle

Used Car Buying

• Look at the dipstick (does it have enough oil?) and the engine (clean?)

• Ask if there’s an owner’s manual• Ask if there are maintenance records or warranties• Try everything (locks, windows, air conditioning, stereo)• Is it generally clean inside and out• Was it JUST started before I arrived?

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New Car Buying

• Benefits– New car smell– Unused/unmolested– As close to mechanically/aesthetically perfect as

will ever be• Drawbacks

– $$– Buying Experience

Things to do…• Walk away… THINK about it and take another look at your

budget• Test drive the car (Hwy & backroads)• Have an unrelated auto shop do a “new car assessment”

($30-75)• Research the car’s history on carfax.com or similar site (has

it been stolen, wrecked?)• Look up it’s worth to compare to price on Kelly Blue Book

I LOVE This One!• Before you get emotionally carried away, consider the

following…– What is the monthly payment?– For how many months? (You should get the shortest term that you

can afford the monthly payments on.)– Did I ask them or figure out for myself how much I’d be paying for

the car in the end?– Did I ask how much MORE over the price, tax and licensing will cost

me?– Am I feeling pressured?– How’s the mileage for the age of the vehicle? Typical is 10,000

miles a year.

Make an Offer

• Let them know you’ve done your research• Use your “new car assessment” results to

“talk ‘em down”• Offer about 10% lower than you’re willing to

pay (so you have room to negotiate)

It’s a Done Deal

• Sign the papers • Get the title (store at home in safe place)• Get insurance (BEFORE driving home!)• Go to Licensing location and get it registered (may need

Emissions test)• Keep insurance info and registration in glove compartment• Keep maintenance paperwork so YOU have it when time

comes to sell

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Installment Buying (Financing)

• If you need to buy an expensive item, some companies let you to purchase it, and pay for it over a period of months and/or years.

• Sometimes they charge interest (APR)• If 0% APR, there is limited downside to

financing a purchase. Just make sure you make all of the payments on time!