DON’T BUY A NEW CAR Used Cars Are Better Than New Cars!

No, I’m not joking; I’m serious. This didn’t used to be the case. When I started in the auto business in 1968, buying a used car was only for folks who couldn’t afford to buy a new one.

 Back in the 20^th Century, the reliability of new cars was so low (compared to today) that when their owners sold or traded them in, the used car was virtually “worn out”. Banks were reluctant to finance used cars. If a used car had been driven more than 50,000 miles, most conventional lenders wouldn’t consider it.  If they agreed to finance any used car, they limited the term to 12 or 24 months, required large down payments, and charged very high interest rates. The mileage on odometers was routinely rolled back to far less than the actual. There was no CarFax report to tell you the condition of used cars. Some of you will remember the old saying, “When you buy a used car, you’re buying somebody else’s troubles.”

Today, everything has flipflopped. New cars are extremely reliable. Manufacturers’ warranties are much longer. The quality, reliability, maintenance costs, and safety are exponentially better than before. You may have heard Honda’s slogan about their certified pre-owned vehicles, “The Best New Cars Make the Best Used”. A high-quality new car maintained according to the manufacturer’s recommendations can be driven more than 300,000 miles with low maintenance and safety, but most trade them in long before they’ve reached that mileage.  Today, many people buy new cars because of new styling, as status symbols, or because they still believe that used cars are too risky to buy. They trade in or sell their perfectly good used car and buy another new car. This affords you the opportunity to buy their trade-in at a bargain price. The new car they buy depreciates thousands of dollars the minute they drive it off the showroom floor. Used cars depreciate far slower.

If you’re looking for a better value and decide to buy a used car, just follow these basic guidelines.

1. Research the best used cars with Consumer Reports, www.ConsumerReports.org. Their annual auto issue lists, not only the best used cars to buy, but lists the worst ones…the ones you should never buy.
2. Consider buying your used car from CarMax, OffLease Only, or AutoNation. These are honest, transparent used car sellers that put their lowest price on every used car and their hidden fees are smaller than other dealers. The best site to look for that used car is www.AutoTrader.com.
3. No matter where you buy your used car, insist on an out-the-door price. Do this research online and tell the salesman that your definition of an out-the-door price is “the amount you can write a check for, present it to the seller, and drive the car home.” Virtually all car dealers add hidden fees and unwanted accessories to their advertised and quoted prices. Getting an honest, out-the-door price will save you potentially THOUSANDS of dollars.
4. Before you sign on the dotted line, take the vehicle to your independent mechanic for a complete check-over. This can cost $100 to $200 but it’s worth every penny. If the seller won’t allow you to do this…DON’T BUY THE CAR. They’ll often argue that their mechanic has rigorously inspected the car, but clearly this is not as reliable as your mechanic.
5. Study a CarFax or AutoCheck report that should be provided to you by the seller. This prevents you from buying a car with a dangerous recall, one that’s been in a bad accident, or a flood. It also provides the maintenance record if it was service by dealer reporting to CarFax or AutoCheck. 

Maintaining and Repairing Your Car During the COVID-19 Pandemic

Virtually everything is changing during this crisis, including how you take care of required maintenance and repairs on your vehicle. If you own a car that’s still under the manufacturer’s warranty, you’re required to have the recommended maintenance spelled out in your vehicle owner’s manual within certain time/mileage limits.  If not, you risk having your warranty being voided when lack of recommended maintenance is the cause. You also must be concerned about having safety items like tires and brakes inspected.  

Most manufacturers recommend maintenance every six months or 5,000 miles, whichever occurs first. Oil changes are recommended every year or 10,000 miles (synthetic oil now used in all late model cars) whichever occurs first.  

Vehicle sales are surprisingly strong when many other retail sales have fallen off.  This is because we feel safer in our cars. Your car is just about the only place to be safely outside your home, without having to wear your face mask. Most people won’t take a train, bus, Uber/taxi or fly, for fear of being infected. More and more of us are driving our cars to vacation spots. It’s natural that you want to have your car checked out before embarking on a long trip. Who wants to be stuck on the turnpike on Sunday night with a disabled vehicle? 

These are my tips on safely maintaining your vehicle. 

1. Be sure you read your owner’s manual so that you know what your responsibilities are to maintain your car under warranty. If you can’t find your owner’s manual; you can access it online.  

2. If you feel uncomfortable about bringing in your car for service, check to be sure the service department you use has taken all the proper precautions…All employees and customers must wear face masks, social distancing maintained with marks on the floor, hand sanitizer and handwashing basins quickly and easily accessible, plastic “sneeze shields” separating you from those you’re dealing with, and daily deep disinfecting cleansing of all the areas you’ll be in.  

3. Check to be sure your car will be disinfected thoroughly before it’s returned to you. Some service departments offer an antimicrobial treatment which will protect your car from being re-infected for 30 days.  

4. If you still feel uncomfortable about visiting an auto service department, ask if they offer pick up and delivery. A few are offering this at no charge if you’re not too far away, and most are offering this for a charge.  

5. Call the service department and explain that you feel uncomfortable about bringing your car in and ask for an extension of the time stated in your owner’s manual. Be sure you confirm in writing, email, text, or letter. Most car dealerships and manufacturers will be flexible…an extra 3 months for an oil change shouldn’t be a “big deal”.  

6. If you have a problem with your car while under warranty, report the problem to the dealer service manager immediately. Explain why you can’t bring your car in and ask that this complaint be noted in your service record. When you can bring the car in, most dealerships and manufacturers will still fix the problem under warranty at no charge. As always, be sure to confirm this in writing.  

7. Finally, remember that you are not required to have your car maintained at the dealership you bought it from, or even by a franchised car dealer. If you take it to an independent service department, be sure to keep the records proving you had the maintenance recommended in your owner’s manual done at the specified intervals.

Pandemics, Bad Credit, and Car Buying

Since the Covid-19 pandemic enveloped us, millions of Americans are either unemployed, furloughed, or working fewer hours for less pay. Banks and all lenders are raising their credit standards to buy vehicles. Lending institutions, themselves, are financially threatened by customers unable to make their car and home payments.

Almost counterintuitively, new and used car sales are surging back almost to pre-Covid times. Many car dealers have always taken advantage of buyers with bad credit. With millions more car buyers with bad credit, this danger to you is worse than ever before. People with bad credit can be desperate (and therefore careless) when buying a car. They’re more worried about having their financing approved than buying the right car at the best price. This allows car dealers to overcharge them for the car they want to sell. It also allows dealers to sell them the car that the dealer wants to sell, not the one the customer wants to buy.

Following are six rules to follow if you have low income, bad credit, or too little credit, and you need to buy a car:

• Never assume that you have bad credit; you should check your own credit score which you can do free. Even if your credit score isn’t good, you should always check with your credit union and/or bank before you opt for dealer financing.

• Choose the car that you want to buy and negotiate the best price before you let it be known that you have marginal credit. Almost every car dealer will try to get you to fill out a credit application before you even begin discussing the car you want to buy and the price. REFUSE to do this and tell the salesman that you have acceptable credit. By doing this you ensure that the dealer isn’t raising the price and steering you to the wrong car because you have bad credit. 

• Car salesmen and finance managers can falsify your credit application that is sent to the bank. NEVER sign a credit application until it is completely filled out, and you’ve verified its accuracy. Be sure that you have a copy of the credit application before you accept delivery of your car. Falsifying credit is a federal crime, not to mention the fact that you’re probably paying far more for the car than you can afford. 

• Choose the car that’s best for you, not the one the dealer “wants” to sell you. The dealer will choose a car that he “wants to get rid of”, one that he can’t sell to anybody else; and/or he’ll choose one with a higher loan value than the one you really want.

• Verify that the car described to the lender has the same options and accessories as the one you’re buying. Dealers will sometime falsify additional optional equipment on the car that they’re asking the lender to finance. Adding fictitious options like sunroofs, navigation, sound systems, etc. tricks the lender into advancing more money than they should. This allows the dealer to sell you a higher priced car, increasing his profit. 

Lenders that specialize in people with bad credit are called “subprime lenders”. Car dealers even have separate finance people that specialize in subprime buyers. They’re called the “special finance” department. Subprime lenders often charge a fee to the dealer which can be as much as $2,500. This fee is not supposed to be paid by the buyer, because it would effectively increase the interest rate, probably above the usury law limits. Unfortunately, it’s commonly added to the price of the car. This is illegal, but it’s almost impossible to prove. By negotiating the best price on the car you want to buy BEFORE the dealer find out you have credit problems, it becomes obvious if the price is increased.

Car Dealers Have Blocked Your Right to Sue

Did you know that when you bought your last car that you agreed to waive your constitutional right to sue the car dealer who sold you the car and have your complaint heard in a court of law by a jury of your peers?

You probably did not, because an “arbitration clause” was hidden in the fine print of your contract that you signed. Even worse, you also are prohibited from even taking that car dealer to arbitration unless you write a “demand letter” first!

What is “arbitration” anyway?

The average person does not understand what arbitration is, much less know that they agreed to substitute this process for their right to sue when they bought their last car. Arbitration allows individuals that are employed by an arbitration company to decide who is right in a dispute, you or the car dealer. Professional arbiters can be retired judges or anyone that the arbitration company decides is qualified. Because car dealers use the arbitration company often and because car dealers determine the compensation to these companies, there is a good chance that the arbitrators are inclined to side with “the hand that feeds it”.

You can’t even file for arbitration unless you write a “demand letter” to the dealer which must contain specific information as prescribed by Florida statute 501.98. This is a summary of that law:

“Florida Statutes require that, at least 30 days before bringing any claim against a motor vehicle dealer for an unfair or deceptive trade practice, a consumer must provide the dealer with a written demand letter detailing the name, address, and telephone number of the consumer, the name and address of the dealer; a description of the facts that serve as the basis for the claim; the amount of damages; and copies of any documents in the possession of the consumer which relate to the claim. Such notice must be delivered by the United States Postal Service or by a nationally recognized carrier, return receipt requested, to the address where the subject vehicle was purchased or leased or where the subject transaction occurred, or an address at which the dealer regularly conducts business.” If you would like to read the detail of this law, you can access it online at https://www.flsenate.gov/Laws/Statutes/2013/501.98.

If you hire a lawyer because you believe a car dealer has taken advantage of you, you’re not eligible for reimbursement of any legal fees unless you have sent the demand letter exactly as described above. Therefore most lawyers are reluctant to assist you because they know that the fees they would normally be entitled to are at risk…both because of the arbitration requirement and the demand letter.


What I’ve described is just one more reason why you should be extremely careful when you buy or lease a car. In the back of our minds most of us believe that when we are doing business with a car dealer, or anybody else, if we are taken advantage of we have the right to sue to force the company to make things right. This is not true with 99.9% of car dealers. You should realize this and be even more careful when you purchase a car. Access my blog for articles on every facet of doing business with a car dealer. There are hundreds of articles accessible in the archives of www.EarlStewartOnCars.com. You will learn never to go car shopping alone, get all promises by the salesman in writing, spend at least two weeks researching the purchase of car, and always get at least 3 competitive bids on the car you’re buying, your trade-in, and your financing.