Car Buying Tips

Sometimes our encounters with car dealerships can make pulling our kids in a little red wagon awfully attractive. If we do our homework, though, we can buy a more reliable form of transportation relatively painlessly. Here’s how:

Estimate how much you can allocate in your budget to car payments before you go shopping. Don’t forget to factor in gas, repairs, licensing fees, and maintenance! Once you get an idea of the kind of car that’s affordable, call your insurance broker for an estimate.
Decide what you need so you don’t get talked into unnecessary options. At the same time, plan for the future. A Neon might look great now to chauffeur your 3-year-old, but in four years, when you’re carpooling four boys to hockey practice, that Neon isn’t going to cut it.

Now that you know your needs and your budget, let’s look at the options:

Buying New Cars

Weigh the trade-offs. The benefit of new cars is that they’re covered by warranties. The disadvantage is the cost: the average car loses 30% of its value in the first year.
Check if leasing is your best option. Leasing usually costs less, but at the end of the lease you own absolutely nothing. Leases also have low mileage allowances, and if you exceed them you have to pay. You also have to keep your car in great condition (given the state of my car mats, I’m not a great candidate!). Leases usually make the most sense if you’re self-employed and can write off the cost. If you’re still unsure, check out this free calculator: http://www.familycredit.org/Calculators/BuyvsLease.cfm.
Check the price before you wander onto the lot. For $12, you can order the Consumer Reports New Car Price Service (1-800-205-2445), which tells you what the dealer paid for the car, any current rebates or sales, and more.

Buying Used Cars

Consider the mileage, and not just the year. The average car is driven 12,000 miles a year. If it’s more, steer clear.
Check the car’s history by entering the Vehicle Identification Number at www.Carfax.com. You’ll learn if it has previously been salvaged, been in a major accident, had its odometer rolled back, and more, all of which could void any warranty you buy.
Watch the extended warranty: did it go into effect when the previous owner bought it, or when you did?
To find used cars that have been well maintained, try rental companies or dealerships. Many dealers drive "demo cars" to chauffeur people getting their vehicle serviced. Both tend to trade vehicles every 18 months – two years.
Never buy a used car "as is". Ask for a 30-90 day warranty.
Don’t mention you have a trade-in until you have a firm price on the new car. Sometimes it’s better to do these transactions separately to get an honest price on both.

Finally, no matter what route you choose, find a Christian friend who knows about cars to advise you. You can’t become an expert yourself in a few days, but you can learn what questions to ask, what pitfalls to avoid, and which dealers are honest.