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Should You Buy a New or Used Car

Car
Written by Super User · 21 May 2011

New Cars

At car dealers, the price of the cars and their optional features are almost always negotiable. In fact, most buyers do not pay the manufacturer’s suggested list price (or sticker price). Here’s how to get the best price:

  • Before negotiating, learn the manufacturer’s wholesale price to the dealer, which will be somewhat less than the sticker price. This wholesale price can be found online or purchased from services such as Consumer Reports.
  • Negotiate price over the phone with several dealers. Because it is easier for you to end a phone conversation than walk out of a dealership, you are likely to get a better price. If the dealer won’t talk price with you over the phone, call another dealer.
  • If reluctant to negotiate, consider seeking assistance from a car buying service. One nonprofit consumer group maintains a popular service, CarBargains, in which several dealers bid for your sale.

Used Cars

Purchasing a used car is risky in that you often cannot be certain of the condition of the car. Here’s a purchase strategy:

  • Check the Kelly Blue Book price to learn what used cars in a certain condition usually sell for. Bluebook prices can usually be found in a library reference book or online.
  • Keep in mind that there are few effective used car warranties. Most cars are sold “as is,” and most of the rest carry a 50-50 warranty that obligates you to pay a portion of the repair costs.
  • Try to find a mechanic who is willing to check the car before you purchase it. And see if the seller will make the sale conditional on the car passing inspection.
  • Consider purchasing from family or friends who are more likely than dealers to tell you what they know about the condition of the car and not overcharge you.

More car buying resources:

What Car to Buy

Car
Written by Super User · 21 May 2011

Cars vary widely in cost. Annual household spending on automotive transportation ranges from hundreds of dollars to tens of thousands of dollars. The exact cost to you depends on factors such as the type of car; its age, mileage, and condition; how you finance, insure, and service it; and how many cars you own and how far you drive them.

Which Car Model

First, think about the types of models that meet your transportation needs and are affordable. Then search the internet and objective publications, such as Consumer Reports and Kelley Blue Book, for information about the features, performance, durability, and costs of the models which interest you. Finally, look over and test drive any of these models.

New or Used

In deciding whether to purchase a new or used car, make certain to estimate the difference in total costs, not just purchase price, but also depreciation, gas mileage, insurance premiums, finance charges, and likely costs of maintenance and repair. Remember, new cars almost always are more reliable and have superior warranties to used cars but lose 20 to 40 percent of their value when driven off the lot.

More car buying resources:

Save for a Car

Car
Written by Super User · 21 May 2011

Being able to travel by car can help people earn more, spend less, and get better value in their housing. Cars, however, are relatively expensive to purchase and maintain. American households spend, on average, more than $8,000 dollars on car purchases and maintenance each year. Individuals can reduce this transportation expense by making wise purchasing decisions. Ask your bank or credit union if they offer car buying workshops or other services to help you with the auto purchase process.

Whether to Buy a Car

  • Consider whether alternative transport -- mass transit, cabs, car sharing, rental cars, or a leased car -- makes sense.

What Car to Buy

  • In deciding whether to purchase a new or used car, make certain to estimate the difference in total costs.

Should You Buy a New or Used Car

  • To purchase a used car, check the Kelly Blue Book price to learn what used cars in a certain condition usually sell for and comparison shop.

How to Shop Around for the Least Expensive Car Loan

  • If you need to take a loan out, learn about how much to borrow, where to get a loan, and information about rates.

How to Save for a Larger Down Payment for a Car

  • The larger your down payment, the lower your debt, interest rate, and interest owed. Learn more about the best way to save for a larger down payment.

Car Buying Resources

  • Links, downloadable materials, and videos. 

Whether to Buy a Car

Car
Written by Super User · 21 May 2011

Mass Transit and Other Alternatives

Before buying a car, especially a second vehicle, consider whether alternative transport makes sense. Particularly in cities, these alternatives could include mass transit, cabs, car sharing, and rental cars. Most important, estimate the cost of a car and the cost of any alternative. Then ask yourself the question, is the convenience of car ownership worth the price?

Leasing Option

If you decide you want to always have a car available, consider leasing as an alternative to ownership. One reason that so many cars are leased is that monthly lease payments are often lower than monthly car payments. But remember that, at the end of the lease period, you won’t own the car. And buying it at the end of a lease may cost you more in total than purchasing it at the outset.

More car buying resources:

Privacy Policy

Written by Super User · 21 May 2011

Privacy Policy:  The main CFA privacy policy applies to America Saves websites with these additions.

America Saves collects personal information from visitors who sign up voluntarily to participate in the savings program.  Visitors who participate provide their name, savings goal, email address, and zip code.  Participants may also sign up for America Saves through local organizations.

CFA maintains the America Saves database.  Information about participants may be shared with and among local America Saves organizations to coordinate area campaigns and for similar activities.  America Saves does not otherwise share personal information about participants with program sponsors or other third parties.  Local organizations may have their own privacy policies.

America Saves sends occasional emails to those who agree to receive them unless recipients opt-out.  Those who provide a cell phone number receive text messages if they opt-in.  We do not post any personal information about America Saves participants on the America Saves webpage without their affirmative permission.

We do not offer any of the America Saves programs to anyone under the age of 14.

Tip of the Day

  • Written by Tammy G. Bruzon | February 2, 2018

    Save and invest wisely this America Saves Week by asking these important questions from the @SEC about the fees you pay: http://bit.ly/2nPXwtr #ASW18

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