Ten Recommendations for New Car Buyers

Here is a brief summary of ideas presented on the website.

1. Know thyself.

Know especially your credit score and true financial vulnerability. Millions of Americans are driving cars they cannot really afford.

Lots of car loans are under water: buyers owe more than the car is worth. When these people have a problem, they roll over the loan against a newer car, never escaping the debtors prison of depreciation.

Some middle class families even refinance the house to get a car.

2. Use a Top-Down Design approach.

Don't wait to have a breakdown or other car crisis to start researching your next car.

Begin by understanding the car industry and each brand's position within it.

Many people fall in love with a car model and fail to look the big picture.

Shop wider than any car your are targeting; research and test drive the competition, look for used cars of the same model. Used cars for sale on eBay and Craigslist can teach much to wise buyers, who just might be sellers in a couple years.

3. Study your final choices carefully.

Typical car reviews, influenced by advertising dollars, often focus on the positives and neglect to mention faults. Multiple sources and perspectives are necessary to evaluate so expensive a purchase.

4. Inspect and test the exact car you are buying.

Inspect the car very carefully for inconsistencies with the purported facts.

If the car is available as a rental, try one for a few days. Visit neighboring dealers and solicit test drives in cars of the same model.

Insist on more than a short test drive in the actual car to be purchased before signing anything. Many people find flaws after they leave the dealership and are surprised to find how difficult it is to get them fixed.

5. Don't be a payment shopper.

Buy based on the total cost of ownership. Lower payments do not necessarily translate into lower costs.

For instance, a payment buyer tries to negotiate for lower payments on a 42 month lease. The Finance and Insurance office (F&I) offers him a slightly lower payment without telling the customer the new lease has a 48 month term. Some lessees do this and never notice the change, others awaken as the lease gets close to ending, but has additional months. A $400 payment for 6 extra months is $2400, lots to pay for a $20 reduction in payment.

Depreciation, fuel, and insurance are also paid monthly, they are effectively part of the car payment.

I say "Don't make a second car payment at the gas station."

6. Shop the dealership harder than the deal.

You are NOT entering into a business relationship with the manufacturer. The dealer is critical to new car buyer satisfaction: service experience is very dealer dependent.

Dealer quality varies widely, from outright crooks to spotless, sincere businessmen.

The standard "get the best deal" procedure recommended just about everywhere but texas-cars-and-dealerships.com involves phone/web/fax fishing for the rock bottom price.

I say today's complex electronics-loaded cars live on a lifeline to the dealership service department.

Every builder puts out a percentage of lemon cars, the better manufacturers just have fewer.

Deal shoppers might get off scott-free, running thousands of miles without incident. Those who get the occasional, but inevitable car with problems can loose enormous time and money through the dealership's back end.

Or the dealer can be the sell and forget type which run off "problem customers."

Good dealerships want, and the very best will keep, customers for life. Saving $250 at purchase time could cost you thousands. If you find a good dealership, stay there.

7. Avoid Dealer/Manufacturer Financing

Try your bank or credit union, getting a loan approval there first.

When consumers walk in to a dealer asking for both a car and financing they are totally at the mercy of the industry.

A common practice is to quote a rate "Subject to financial institution approval."

A few days after the sale, they call to say the financing fell through and the terms are totally different with a new lender.

And, don't fall for the super low rates advertised: you have to have near perfect credit to qualify.

The worst thing a buyer can do is come to a dealership with a lease or a trade-in with an outstanding loan. Wait, the absolute worst thing is to come in with an outstanding loan for more than the car is worth: underwater.

Upside-down.

Yikes!

8. It ain't over till the fat lady sings.

The profit on a new car sale is made in the finance and insurance (F and I) office more often than on the showroom floor. The process on the showroom floor, which many buyers mistake for the "deal", is designed to prepare the customer for the real workover to come in the back office.

Add-on selling of extended or dealer specific warranties, undercoating, gap insurance, and a laundry list of other dealer installed options is where the real profits are.

Verbal promises which don't show up in the paperwork are often finalized here.

9. Keep your trade-in secret

Better still, sell the car privately or take it to Carmax. Salespeople love to get your trade into the shop for appraisal so you'll feel committed to the deal. Some will take the car to another location, others will "loose" your keys.

10. Maintain your new car.

Do-it-yourself is not necessary, but mechanically naive owners are the ones who have the worst problems.

Oil should be changed slightly more often than the manufacturer's "most extreme" service or climate interval.

Keep every receipt and make sure the vehicle identification number (VIN) and service performed are legible.