Monday, September 18, 2017

BEWARE BUYING A “FLOOD CAR”

FLOOD CARS ARE FLOODING SOUTH FLORIDA

As I’m sure you know, the flooding from hurricane Harvey in Houston and surrounding areas was unprecedented and catastrophic; over 50 inches of rain fell which was the second highest on record in the USA (51 inches once fell Hawaii). About a MILLION cars were “destroyed”. Our most recent hurricane, Irma, caused very little flood damage compared to Harvey. When I say “destroyed”, you may envision a vehicle badly and visibly damaged, but most of these cars caught in the flood look good. Most of the damage and signs of damage are hidden. Many of these cars are brand new. The cars that you see in the aerial picture above are all “destroyed” or totaled by the insurance companies, but lots of them will end up on car dealers’ lots for sale…many in South Florida. 
South Florida is a magnet for “problem” cars. Problem cars are those that aren’t supposed to be sold or that can be hard to sell. For example, cars missing airbags, cars with un-repaired dangerous recalls (Takata airbags), totaled cars that were rebuilt, cars with very high mileage that have had their odometers replaced with lower miles, and, of course flood cars.
The four main reasons that South Florida is so popular with crooked used car wholesalers are: 
(1) It’s the second largest volume retail car market in the world, next to southern California. 
(2) South Florida exports more new and used cars (mainly to Central and South America) than anyplace else. Other countries have very lacks safety regulations compared to the USA. 
(3) More car dealers in South Florida rank below the already low average of honesty and ethics for car dealers (Google “Gallup Annual Poll for Honesty and Ethics in Professions”). 
(4) Florida regulators and legislators are more lax than most other states in the enforcement of rules and laws controlling the bad behavior of car dealers.
Consumer Reports has an excellent article on spotting flood cars. These are the main signs of a car that has been in a flood:

 How to Spot a Flood-Damaged Car
Water damage can be hard to detect, but Consumer Reports recommends that you look for some telltale signs:
·        Inspect the carpets to see if they show signs of having been waterlogged, such as smelling musty or having caked-on mud. Likewise, brand-new carpets in an older vehicle may be another red flag.
·        Check the seat-mounting screws to see if there is any evidence that they have been removed. To dry the carpets effectively, the seats must be removed and possibly even replaced.
·        Inspect the lights. Headlights and taillights are expensive to replace, and a visible water line may still show on the lens or reflector.
·        Inspect the difficult-to-clean places, such as gaps between panels in the trunk and under the hood. Waterborne mud and debris may still appear in these places.
·        Look for mud or debris on the bottom edges of brackets or panels, where it wouldn’t settle normally.
·        Search around the engine compartment. Water lines and debris can appear in hard-to-clean places, such as behind the engine.
·        Look at the heads of any unpainted, exposed screws under the dashboard. Unpainted metal in flood cars will show signs of rust.
·        Check to see if the rubber drain plugs under the car and on the bottom of doors look as if they have been removed recently. That may have been done to drain floodwater.
You should know, that the some of the crooks that sell these cars also read Consumer Reports and can successfully disguise many of the signs you read above. As with computer hackers and the anti-virus companies, there’s a seesaw battle staying ahead of each other. For this reason, I suggest that you insist on a CarFax or AutoCheck report and take the car you’re proposing to buy to a mechanic you can trust. For about $100 he can do a thorough check on your car…money well spent. 
Another precaution you should take is simply don’t buy a car that was titled in the Texas flood area during the time of hurricane Harvey. However, remember that titles can be “washed” and this means some states will allow a new title to be issued on a car that erases all evidence of its previous history. The three worst states are Mississippi, New Jersey, and Pennsylvania. There is no national, federal title law; each state makes up its own. Fortunately for us, Florida has a rigid law, but that protects you only if the car was never titled out of state. If you buy a used car that was sold new in Florida and retitled for new owners only in Florida, you can be sure it wasn’t flood damaged anywhere else.
As if that’s not enough to worry about, remember that lots of Texans didn’t have flood insurance and never had their cars repaired even though they were partially submerged. It takes only about 18 inches of water to destroy the electronics in a car. Modern cars are “computers on wheels”. The car can function fine after its initial submersion for weeks and even months. Many of these uninsured cars were quickly traded in or sold outright by their owners. There is no official record on these cars. Your only hope is a thorough inspection by a trusted mechanic.

Monday, August 28, 2017

Consumer Reports is your Best Friend When Choosing and Buying a Car

If you don’t already subscribe to Consumer Reports, you should. I have been a subscriber for as long as I can remember. I get the magazine in the mail and also subscribe online. I rarely buy any product without consulting this great magazine. I subscribe to the online edition because it’s even more current than the regular magazine, and I get many consumer tips via email. I recently received their annual auto issue, which no car buying family should be without. All libraries would have this on hand.

Don’t be fooled by other magazines with similar names purporting to objectively analyze and recommend products. There is only oneConsumer Reports. They do not accept any advertising and therefore are not beholding to any companies. They even go beyond this and will not allow a retailer or manufacturer to use the name Consumer Reports in their advertising. Even if Consumer Reports gives a product a great rating, that company cannot mention this in their advertising. If they do, they get sued by Consumer Reports. No other company goes this far and is this “squeaky clean”. J.D. Powers is a company that ranks and compares lots of products including cars, but they allow companies to use the JD Power name to advertise their products when they rated them good. You can understand why a consumer might be just a little more skeptical of J. D. Powers’ objectivity than Consumer Reports’. You should ignore car enthusiast magazine like Motor Trend and Car and Driver that write articles on the “Car of the Year” and other articles praising various makes and models. You can be sure that these car manufacturers with the great articles are spending lots of money advertising in these magazines.

I am not saying that Consumer Reports is infallible. They do make mistakes and they have been successfully sued by some companies that were affected by their mistakes in testing. But this is very rare. As a car dealer for almost fifty years, I have not always liked what I read about all of the makes and models of cars I have sold, but I grudgingly had to admit that the reports were almost always accurate. Issues of CR recently gave negative reviews to models of the cars I now sell, Toyota. I must confess that with some makes and model cars I have sold over the years, I was very thankful that the circulation of Consumer Reports is not very large. Their circulation is growing as consumers become more educated and sophisticated.

This annual auto issue should be a mandatory read before you buy your next used or new car. Here are some of the articles in this issue…Top Picks (the best new vehicles they have tested), Best and Worst (tells you the ones you definitely shouldn’t buy), Coming for 2018, Who Make The Best Cars (best manufacturers), Buy Better on the Web (The Internet is the best place to buy your next car), Reliability trends (repair histories on all makes and models), What’s Next in Auto Safety, and Used Cars, Best and Worst.

Consumer Reports also offers other car buying services like their “New Car Price Service” which discloses the best price you should expect from a dealer, rebates and incentive information, negotiating strategies, and their expert recommendations. They also offer a “Used Car Price Service” which provides an evaluation tool kit that helps you establish the right price for most used cars.

Monday, August 14, 2017

Open Letter to Governor Rick Scott



A letter addressing the critical issues associated with the sale of used vehicles equipped with recalled Takata airbags was written just over one year ago, and I’ve received no reply; It was also published as a full page ad in Governor Scott’s hometown newspaper, the Tallahassee Democrat. In the last several weeks, TWO MORE FLORIDIANS were killed by exploding, defective Takata airbags, and it is inevitable that the toll of deaths and serious injuries will continue to rise as long as the sale of used cars equipped with defective Takata airbags continue. While I argued last year for laws specifically requiring dealers to disclose outstanding safety recalls, it is now clear that the only effective way to address this problem is to extend the ban that already applies to the sale of new cars subject to safety recalls to include used cars as well. Indeed, the nature of the Takata defect is such that the older the car is, the more likely it is that the airbag inflator will explode. So I am writing once again with a renewed sense of urgency, and I not only call for action by the Governor, but I also ask every car dealer in this State to consider the dire consequences of continuing to sell used cars with defects that can kill and maim their customers and every other passenger in the car they are putting on the road. Governor, please read my letter and call me at 561 358-1474. 



Dear Rick, 


Please excuse this public form of communication, but I chose it because my message is urgent and I believe it will get your attention faster than going through the normal, bureaucratic channels. 


Florida law not only fails to expressly ban the sale of used cars with unremediated safety recalls, there is no Florida law that even specifically requires a car dealer to disclose national safety recalls on used cars sold to their customers. This has always been bad, but considering the unprecedented Takata air-bag inflator recall (currently affecting 75 million vehicles in the U.S. and rising), this legal loophole presents a problem of critical magnitude. And efforts to address the problem with disclosure requirements, while certainly better than nothing, do not go nearly far enough in safeguarding consumers from the lethal timebombs  hidden in their steering wheels. 


I communicated my position directly to the Florida Automobile Dealers Association over a year ago, and they are aware of this serious omission in Florida’s laws. Unfortunately, legislative action, as you well know, is always a slow process if it ever happens at all. What is required in this case is an emergency executive action by you, the governor of the state of Florida. 


I can assure you that very few Florida automobile dealers are voluntarily disclosing safety recalls affecting the used cars they sell, and even when some form of disclosure is made, it is never adequate to properly alert purchasers to the danger posed by exploding airbags. As I write this letter, there are Floridians unknowingly buying cars with defective Takata airbag inflators that could possibly explode on impact, firing metal shrapnel into their bodies. There have already been several deaths across the country attributed to these faulty inflators. 


It is a certainty that nearly all car dealers in our state have vehicles in their current inventories with these defective airbags and other safety recalls. I have identified sixteen in my used vehicle inventory that are affected. It’s a simple matter to identify these vehicles by entering the VIN online at the NHTSA website, http://www.nhtsa.gov/Vehicle+Safety/Recalls+&+Defects


The sad fact is that most dealers don’t check these vehicles for recalls because it takes time to have the recalls performed and “time is money”. Recalls can only be performed by franchised new car dealers of the make that is recalled. Franchised car dealers prioritize recalls for their inventory cars and for their customers’ cars. They are also dealing with long waiting lists of these cars awaiting the requisite parts. With the Takata airbag inflator recall, the wait time is about about a year because of the lack of availability of parts. Letting  a used car sit on a dealer's lot for a year is a cost that few dealers will be willing to incur unless the law expressly requires it!


Sadly, another reason safety recalls are not being disclosed to customers is fear of loss of profit. As it should, telling a customer that they are buying a used car with a potentially deadly defective airbag reduces the value of that vehicle - especially when the customer learns he or she must drive that car for a year before a safe airbag can be installed. 


Because disclosure negatively impacts the affected vehicles' values, car dealers are caught between a rock and a hard place. If they attempt to retail the cars to fully informed customers, they have to slash the selling price and if they sell them at the wholesale auction they have the same problem. Florida consumers will also be adversely affected, as car dealers will not be able to offer as much money for trade-ins under this recall since the dealer knows he or she can’t resell it for as much as they could with a safe airbag. 


This presents an entirely new and different problem…an economic liability question. Everyone agrees that Takata is largely responsible for the reduction in value of the 75,000,000 vehicles with dangerous airbags. However, Takata is on the verge escaping responsibility through bankruptcy and/or selling out. This leaves the auto manufacturers with, potentially, all of the liability. The only parties that clearly have no responsibility in this are the owners of these affected cars and the dealers who  either do not sell Takata airbag equipped vehicles at all or who properly disclose the defective airbags, the full extent of the danger they present, and the difficulty involved in correcting the defect when replacement parts are unavailable. Unfortunately, honest dealers and uninformed purchasers are the only two parties that currently bear all of the economic loss.


Adding to the urgency of this crisis is the fact that the failure rate of Takata airbags is higher in Florida than most other states because of our high humidity which increases the risk of the airbag accelerant, ammonium nitrate, exploding. Furthermore, many of the cars recalled are older models, dating back to 2004 that have been on the highways for many years, and age is also a contributing factor to risk. 


Rick, if you have any questions or comments about this letter, please call me on my personal cell phone, 561-358-1474. If you would like to meet with me, I will fly to Tallahassee on a moment's notice. 


Best, 




Earl

Monday, August 07, 2017

Minimize the Pain and Inconvenience Having your Car Serviced and Repaired

Before I get into the pitfalls, it is important for you to understand how important it is to have your car serviced per the manufacturer’s recommendations. The pitfalls and consequences of not doing so can be equal to or greater than those you might experience at the hands of an incompetent or unethical service department.

I strongly recommend that you have your car serviced and repaired by a franchised dealer of the make of your vehicle. I know that this statement, coming from a franchised car dealer, may be met with some skepticism. Listen to my reasons before passing judgment. Modern vehicles are highly complex computerized machines requiring very sophisticated diagnostic equipment and highly trained technicians. The evolution of new, expensive diagnostic equipment requires constant updating. The evolution of car technology requires continuing education of dealers’ factory trained technicians who attend many weeks of schools every year. Forty years ago, it was possible for a good mechanic to fix anybody’s car. Those days are gone and your car needs a highly-trained specialist with the very latest diagnostic equipment. It is impossible for an independent service company to be competent in servicing and repairing all makes of automobiles.

Carefully choose the dealership that will service your car. You don’t have to take your car to the dealership that sold you the car for warranty repairs, as many believe. Every dealership of your make car will welcome your warranty and non-warranty work. Do your homework on which dealer has the best service department. Every dealer is graded in customer satisfaction by the manufacturer. Ask to see a copy of his CSI (customer satisfaction index) scores. Be forewarned that service satisfaction surveys can and are manipulated by car dealers (offering a free tank of gas to let the dealer fill out your survey). Many auto manufacturers have begun measuring their dealers’ service competence by the percentage of service customer that return for more service. It’s usually called SERVICE RETENTION. If a high percentage of service customers keep coming back, that dealer must be doing a good job. Check with the BBB and the County Office of Consumer Affairs.

When you take your car in for maintenance or repairs, always ask for an estimate. State law requires that a service department not exceed a written estimate by more than 10%. When paying your bill, scrutinize the detail to be sure that you know exactly what each charge means. Most service departments add a fee on top of everything else with various labels like “miscellaneous supplies”, “sundry supplies”, “environmental handling”, etc. This fee is simply a 5% or 10% charge tacked onto the total bill. If you object to this fee, which you certainly should, dealers will often waive it.

You will find that prices for maintenance like oil changes, alignments, tire rotation and balancing, etc. are usually priced competitively. On many new cars manufacturers are offering free maintenance for 2 or 3 years. Where you have to be careful is in the pricing of major repair items like transmission, engines, and air-conditioners. When quoted a price on a big repair, don’t be afraid to negotiate. If you let it be known that you are willing to take your car elsewhere (even if you’re bluffing), you can often negotiate the price down significantly.

You should always make an appointment before bringing your car in. Appointments should be scheduled at relative slow times and days. Avoid bringing your car in early on a Monday morning and other very busy times. You want the service advisor to spend as much time with you as is necessary. This will allow you to drive the car with the service advisor if necessary to identify a specific problem like a squeak, rattle or vibration. Pick your car up at a time when the service advisor or technician has time to road test the car with you again to be sure that the problem was fixed.

Don’t be shy about asking for a loaner car when you have to take your car back a 2nd or 3rd time for a repair that was not done properly. It’s the dealership’s fault and you should not be inconvenienced. On a comeback, always talk with the service manager directly. Be very careful that you really speak to the real service manager. Service salesmen are not managers. They are commissioned salesmen but they often identify themselves as service managers or assistant service managers. Also ask that they assign their best technician to the job. The technician that works on your car should have a few years’ experience and be ASE (American Association for Automotive Excellence) certified in the area of the car he’s working on…transmission, air conditioner, engine, etc.



Most car dealership and independent service departments will recommend “extra” maintenance not found in your car’s owner’s manual. You should be very skeptical of anything that your car’s manufacturer does not recommend. “Flushes” of the radiator and transmission are popular and expensive extras that are often recommended. A good rule of thumb is to “just say no”.

As I have said in earlier columns, there is nothing more important than choosing the right dealership to do business with. No service department is perfect and never makes a mistake. What you want to find is that service department that, in addition to being competent, will fess up to their occasional mistakes, sincerely apologize and make them right.

Monday, July 31, 2017

How Can I Learn the Dealer’s Cost on a Car?


It’s almost impossible for you to determine the true cost of a new car. This might sound crazy, but many dealers don’t know the true cost of their cars. The manufacturers and distributors invoice their dealers for an amount when they ship them a car that is almost always several thousands of dollars more than the true cost. It’s fair to say that in virtually every case the “invoice” for a new car is much higher than the true cost. By true cost, I am referring to cost as defined by GAAP, generally accepted accounting principals.

You probably have heard about “holdback”. That is an amount of money added into the invoice of a car ranging from 1% to 3% of the MSRP which is kicked back to the dealer after he has paid the invoice. In some cases there are two holdbacks…one from the manufacturer and one from a distributor. Some manufacturers include the cost of regional advertising in the invoice which offsets the dealer’s advertising costs. Another common charge included in invoices is “floor plan assistance”. This goes to offset the dealer’s cost of financing the new cars in his inventory. Another is “PDI” or pre-delivery inspection expense which reimburses the dealer for preparing the car for delivery to you. I could name several more, depending on the manufacturer or distributor. Some of these monies that are returned to the dealer are not shown as profit on dealers’ financial statement and some are. Technically a dealer could say that the cost he showed you reflected all the profit (by definition of his financial statement), but the fact would remain that more money would come to back to him after he sold you the car. To me (and the IRS) that’s called profit.

Besides holdbacks and reimbursements for expenses, you must contend with customer and dealer incentives (usually referred to as customer cash or dealer cash) when trying to figure out the cost of that new car. You will probably be aware of the customer incentives, but not the dealer incentives. Most dealers prefer and lobby the manufacturers for dealer rather than customer incentives just for that reason. Also, performance incentives are paid to dealers for selling a certain number of cars during a given time frame. These usually expire at the end of a month and are one reason why it really is smart to buy a new car on the last day of the month.

Last but not least, remember the “dealer fee”, “dealer prep fee”, “doc fee”, “dealer inspection fee”, electronic filing fee, tag agency fee, etc. which is added to the price you were quoted by the salesman.. It is printed on the buyer’s order and is lumped into the real fees such as Florida sales tax and tag and registration fees. Most dealers in Florida (it is illegal in many states) charge this fee which ranges from $500 to $3,000. If you are making your buying decision on your perceived cost of the car, even if you were right, here is up to $3,000 more in profit to the dealer.

Hopefully you can now understand why it is virtually impossible to precisely know the cost of the new car you are contemplating buying. Most often the salesman and sales manager is not completely versed on the cost either. Checking the cost on a good Internet site like www.kbb.com or www.edmunds.com is about the best you can do. Consumer Reports is another good source. One reason that Internet sites don’t always have the right invoice price is that different distributors for cars invoice their dealers at different prices.

Do not decide to buy a car because the dealer has agreed to sell it to you for “X dollars above his cost/invoice”. This statement is virtually meaningless. You are playing into the dealer’s hands when you offer to buy or he offers to sell his car at a certain amount above his cost. As I have advised you in an earlier column, you can only be assured of getting the best price by shopping several dealers for the exact same car and getting an “out the door” price plus tax and tag only.

Monday, July 17, 2017

Caveat Emptor (Buyer Beware)


Car Dealers Can Fool all the People Some of the Time

Almost everyone has read Abraham Lincoln’s popular saying, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” I think Abe meant this to be a positive assertion that government may get away with deceiving us for a while, but in the long run, truth justice and the American way will prevail…and I think he was right.

However, it doesn’t work that way with unethical car dealers and car buyers. It always has been “caveat emptor”, or “buyer beware when it comes to buying or servicing a car. Unfortunately for a buyer to “beware” he must be “aware” …that is to say educated, mature, sophisticated and experienced. This excludes a very large segment of our population including the very young, the very old, the uneducated, those with low I.Q.’s and those not proficient in the English language. Is this one reason why our regulators and elected politicians don’t seem to care or act with respect to the rampant unfair and deceptive sales practices of a large number of Florida car dealers? Most elected officials and regulators are lawyers and are highly educated and sophisticated. They don’t have a problem buying or servicing a car. In fact, the car dealer that tries to take advantage of a lawyer, regulator, or politician is asking for trouble.

I’ve been writing this column/blog and broadcasting my radio show, Earl Stewart on Cars, for over seven years. I sometimes feel that I’m “preaching to the choir” when it comes to advising people how to avoid getting ripped off by a car dealer. You, my readers and listeners, largely fall into the category of the educated and sophisticated, aware buyer. Most of you aren’t taken advantage of when you buy or service your car because you won’t allow it. Unfortunately, there are enough uneducated, naive, and otherwise vulnerable consumers to feed those unethical car dealers who prey on the defenseless among us. All you must do is read some of the online or TV car advertisements. To the educated, sophisticated buyer, these ads are actually funny if you can forget the fact that so many fall prey to them and are taken advantage of by the dealers. For example, it’s hard for you or me to believe that anybody would respond to an advertisement without reading the fine print. Many dealers today are advertising prices that, when you read the fine print, are understated by many thousands of dollars. When you or I see a dealer stating that the car price is plus “freight”, we are educated enough to understand that the law requires that the freight cost be already included in the price. A shrewd buyer knows that “dealer list” is not the same thing as MSRP and that a large discount from “dealer list” means absolutely nothing. We know that the “lowest price guarantee” is worthless if the dealer reserves the right to buy the car from the other dealer that offers a lower price.

There are those who argue that all buyers have the responsibility to guard against unethical sellers, to take care of themselves. In fact, that’s the literal translation of the Latin legal term “caveat emptor” …let the buyer beware. That’s sounds good, but what about the elderly widow whose husband recently died and who never had to make the decision on a major purchase in her entire life? What about the young person just out of school with no experience in the real world? How about the first generation immigrant who struggles with English? Should we be concerned about our underprivileged classes who often drop out of school because they must go to work to support themselves or their family? You and I know lots of good people who, for one reason or another, simply can’t cope with a slick car or service salesman.


My bottom line is this, since we can’t rely on our regulators and politicians to protect those who “can be fooled all the time”, maybe we owe it to society to protect these folks. If you know someone who is thinking about buying a car or has a service problem with her car and you feel she may not have the ability to fend for herself with the car dealer, offer your support. If you’re one of the people who needs support, ask someone who can go “toe to toe” with a car dealer to come with you when you are car shopping. By the way, nobody, sophisticated or not, should car shop alone. Two heads are always better than one and it’s always a good idea to have a witness to what was said during a negotiation. And, of course, if you don’t have the time to help a person or you’re that person, you can always call me…I’m always here for you.

Monday, July 10, 2017

Ten Tips on Buying the Right Used Car

I sell new and used cars, but if I was not a car dealer and I needed to buy a car, I would buy a used one instead of a new. This is because a used car is a better value. You get more for your money due to avoiding the initial rapid depreciation of a new car. I use the term “used car” in this article because I despise mumbo jumbo euphemisms like “pre-owned”. A used car is a used car is a used car.

(1) Never buy a used car without a CarFax report. The dealer should provide you with one at no charge because any dealer worth his salt runs a CarFax report on every used car he trades in or buys to protect him. Simply don’t buy a used car from anybody that does not give you this report. CarFax reports now have, not only the information about collision damage, floods damage, previous odometer reading, and title issues, (all obtained from insurance records) but also the mechanical repair history (obtained from dealer records). The CarFax report also shows outstanding safety recalls, but I also recommend that you double check this with the NHTSA, National Highway Traffic Safety Association at www.SaferCar.org. In my experience, CarFax misses safety recalls about 30% of the time. Unfortunately, there is no law requiring car dealers to even disclose an unfixed safety recall and most dealers are willingly selling their customers cars with dangerous safety recall like Takata airbags.

(2) Have your car inspected by an independent mechanic. Insist on having the used car you are thinking about buying inspected by your mechanic, not affiliated with the dealer. This should cost you no more than $150 and will be money well spent. The mechanic should look, not only for mechanical issues, but body and flood damage. If the mechanic finds some minor things that need fixing, insist that the dealer take care of these and include it in the price he already quoted you. If the dealer won’t allow this, don’t buy from him.

(3) Consult Consumer Reports, www.KBB.com, and www.Edmunds.com. These sources have complete information on the safety, reliability, maintenance cost, and even what a fair price is to pay for any used car. Consumer Reports lists the “Best and Worst Used Cars”. This is great guide and don’t ever buy a used car that’s on the “worst list”.

(4) A Certified Used Car is only as good as the dealer who sold it to you. Most manufacturers don’t even require that the dealer fix open safety recalls to call the car “Certified”. All manufacturers sponsor “certified” used cars of their make. The main reason for this is that they like to sell the dealer warranties that the dealer then marks up and sells to you. A secondary reason the manufacturers do this is to enhance the resale value of their make car. This helps them sell more new cars because of the higher trade in value and the higher residual values on cars they lease enhance their profits. You can buy a warranty for used car even if it’s not certified, but in a certified used car it’s usually included in the price (which makes the price higher). One good thing about manufacturers’ certified programs is that sometimes the manufacturer will offer you lower financing rates. Certified used cars require that the dealer inspect all critical parts of the car and fill out a checklist that is anywhere from 75 to 150 items. That’s all well and good but how carefully is this inspection being done and by whom? You should ask to see a copy of the check list and ask about the qualification of the mechanic who performed and signed the inspection. All too often, the dealer assigns the lowest priced mechanic he has to perform these checks. It’s questionable whether he even performs all of them. A red flag is if you notice a straight line drawn through all of the check boxes instead of them being checked off individually.

(5) Money Back Guarantee. A lot of dealers advertise that if you change your mind about the car you bought you can bring it back and exchange it for another. This is a worthless guarantee. You can be sure that they will pick the car and the price of the car they will exchange it for and will end up making an additional profit. CarMax has a reasonable guarantee which refunds all your money within five days with restriction that the car is returned in the same condition that it was sold. CarMax is a good place to buy a used car.

(6) Contact the previous owner of the car. The previous owner of the used car should be happy to talk to you. Insist that the seller provide you with his telephone number. If the dealer sold the car to that owner as a new or used car and serviced it, ask if you can see the service file.

(7) Test drive the car just as you will be driving it later. Simply taking the car for a spin around the block with the salesman is not enough. I recommend that you drive the car in the manner and places that you will be driving it when you own it. Take it out on the expressway if you do a lot of higher speed driving. You should drive the car for at least a few hours at all the same speeds, conditions, and on the same roads that you normally experience. Park the car, back it up, and take a friend for ride to get their opinion. You don’t want to have any surprises when you bring it home for keeps.

(8) The Internet is the best place to shop for your used car. Most dealers today display all their used car inventory right on their website along with the prices. These prices are close to the real price you will pay. The dealer knows that he won’t get many responses if he overprices his used cars. Shopping on the Internet give you ample opportunity to compare the same or similar used cars with lots of different dealers. As always, call the dealer before you come in to confirm the Internet price is an out-the-door price without a dealer fee, doc fee, dealer prep, etc. www.TrueCar.com and www.CostcoAuto.com are good choices to buy a used car.

(9) Commit all of the dealer’s promises to writing. Take notes of everything the salesman and sales manager promises you such as “we’ll fix that CD player if you’ll bring your car in next week” or “if you ever have a problem with the car we’ll give you a free loaner when you come in for service”. Make those notes part of the buyer’s order and be sure that a manager signs it. It’s also a good idea to always shop with a friend. In a “He said she said” situation, two people trump one.

(10) Get at least three bids on financing. Know what your lowest interest rate is for the year, make, and model car you’re buying. Get quotes from your bank or credit union and at least one other bank in addition to the rate your dealer offers you. If you do use your dealer’s financing, be sure you know and understand everything that’s included in your finance contract. You will be offered products like warranties, GAP insurance, maintenance, road hazard insurance, etc. It’s illegal for a dealer to tie your acceptance for financing or interest rate to your buying a warranty or any other product.