How Do I Buy the Right Car?
Whether you are looking at used or new vehicles, buying or leasing a car is a major investment that requires a lot of research. When you are buying a vehicle from a dealership, knowledge is power. Generally, the dealership has all the knowledge about the process. However, there are a number of things you can do before going to the dealership that will give you the knowledge and power to negotiate effectively with the dealership. The San Diego lemon law lawyers at Rosner, Barry & Babbitt, LLP want to provide you with important information to help you buy the right car.
- Think about what you need in a vehicle: Make a list of things you “need” versus things you “want.” For example, if you cannot drive a stick shift, you need to make sure the car has automatic transmission. Further, if you live in San Diego, you probably do not need an all-wheel drive vehicle.
- Look closely at your budget: regardless of whether you buy or lease, your monthly payment should not be more than 20 percent of your monthly take home pay. Be aware of your limits and stick to them when negotiating.
- Research your credit rating and ability to get financing: You want to know whether you have good or bad credit. Too often, consumers take the dealership's word for it. Trust us: they will always tell you that your credit is bad. To prepare, get a copy of your credit report. This will allow you to figure out what is good and bad on your credit report. If there is information on your credit report that is not yours or that is inaccurate, contact Rosner, Barry & Babbitt, LLP to see how to go about getting it removed. Look into financing through your bank or credit union before you even talk to a dealer. Once you know you can get financed at a certain rate, you can use this to get the dealership to try to match or beat the financing rate you have.
- Never negotiate base on monthly payment: When buying a car, consumers often think in terms of how much they can afford per month. Thus, they negotiation based on monthly payment. Do not do this. The amount of the monthly payment is based on the interest rate, or annual percentage rate (APR); the amount you borrow; the finance charge, or interest paid over the loan term; and how long you are going to repay the loan, whether it is 60, 72 or 84 months. The higher the APR and the more you borrow, the more you are going to pay in interest over the life of the loan. However, when you negotiate based on monthly payment, the dealership can lower your monthly payment by making the term of your loan longer. Your monthly payment may be lower on 84-month loan than on a 60 month loan; however, you are going to pay more in interest over 84 months. Further, it is easier for the dealership to slip in the cost of extra items you do not want to purchase if you negotiate based on monthly payment.
- Research the make, type and class of car you want before you go to a dealership: You can do much of your “car shopping” online without the pressure from sales people – take advantage of it. Email a dealership directly; you may be able to develop a relationship with a sales person before setting foot in the dealership. In addition, if the same car is being sold by multiple dealers, you can use this to your advantage to get the dealers to bid against each other for the sell, thus getting you the best possible price. Further, doing the negotiations ahead of time will cut down the amount of time you are at the dealership. Run a vehicle history report on the vehicle. These are to be used as aids; they are not 100 percent accurate: The U.S. Department of Justice has a National Motor Vehicle Title Information System that can be searched by the VIN of the vehicle. Carfax or Auto Check also provide vehicle history reports.
- Make notes of the advertised price and other negotiations: Legally a dealer cannot sell a vehicle for more than its advertised price. Thus, for any advertisements you see in the newspaper of online, make sure to bring them with you to the dealership and keep a copy of them for future use. Also, keep copies of any notes that you make regarding conversations with the dealership.
- Test drive the car: Drive the car through conditions you expect to be driving in regularly. Drive over hills, on highways or in city traffic. Make sure you start and stop frequently and listen for engine noise. Bring someone with you to help you think of questions for the dealer.
- Do not sign anything without reading it over carefully: Do not sign the purchase contract and other documents related to the sale until you understand everything. Make sure that any promises the dealer makes to you are confirmed in writing. If you need to make a deposit, find out if it is refundable and make sure it is in the contract. Finally, ask the dealership to give you copies of all the documents related to the purchase, including your credit application. For any documents you sign during the process, ask the dealership for a copy immediately. Do not allow the dealership to put the documents in an envelope for you.
- Be on the lookout for title brands: Flood and salvage vehicles, lemon law buybacks and odometer discrepancies have to be disclosed to you prior to your agreeing to purchase these vehicles. Also, they must be disclosed on the title.
- Ask about the vehicle’s history: A dealer has an affirmative duty to disclose all material known facts about a vehicle including whether or not it was a rental vehicle. However, it is better if you affirmatively ask about the vehicle's history. Where did you get the vehicle? Was it a rental? Has it ever been in an accident or otherwise damaged? What type of inspection did you perform on the vehicle? Why is the mileage so low or high? Do you sell lemon law buybacks? Is this a lemon law buyback? Even if it is a new vehicle, ask if the vehicle was damaged while being transported or at the dealership.
- Know what kind of warranty the vehicle has: Does the manufacturer cover it? Are there any limitations? Does the car have a service contract or a third-party warranty?
- Have an independent mechanic look at any used vehicle: Every use vehicle you purchase should be taken to an independent mechanic before you buy it. If the dealership will not let you or tries to discourage you, do not buy the vehicle. Have the mechanic look over the vehicle for signs of body rust, tire wear, and signs that a vehicle has been in a crash. Have him inspect all systems, including compliance with California emission law, even if a vehicle has a smog certificate.
- Be familiar with the protections of the auto lemon law: Know that even if you have done your research, dealers may still get away with auto dealership fraud. If you believe you have purchased a lemon, contact the California lemon law lawyers at Rosner, Barry & Babbitt, LLP and a California lemon lawyer will discuss your case with you.