Car buying tips

As I said yesterday – I am in the market to buy a car, and there are several lessons I learned in this process, which I thought I’d share with you in this post about car buying tips

There are a couple of things you should know before you start reading these tips. First is that we are in the market for a used car, and secondly – we don’t have a particular make or brand in mind. We just wanted to check out the options available and then take a decision.

With that in mind, here are some car buying tips you could use.

1. Cars.com is a good resource for checking out car listings online: I have found cars.com to be the best place as far as initial screening is concerned. It is always handy to have an online resource to browse through car listings before you head out to the dealer and in my experience – cars.com is the best place to do that. You can search by make, model, year, location and price – and that gives you a good idea of the nearby options in your price range. It is a good idea to get a sense of the local tax rate and also add about $300 – $400 dealer documentation fee to the price because that is what you will have to pay in addition to the sticker price.

2. Check out the KBB value: I check the KBB value of a car after finding something I like. This usually helps in getting a perspective on how much the dealer is asking for with respect to the fair value, and is a natural next step for me. The thing to keep in mind about KBB values is that there are two types of values – Individual and Retail. Individual prices are lower than retail prices, and based on who you are buying the car from – you should look at individual or dealer KBB values. Another thing to keep in mind is that KBB values for retail cars assume excellent condition. So, if the car you check out is not in great shape – it should be priced lower than the excellent condition price.

3. See the CARFAX: See the CARFAX to take a look at the history of the car. I never bought CARFAX membership, because most dealers will be only too happy to show you the CARFAX. You don’t need to spend money on it – just ask the dealers to show you the report. In a lot of cases – I saw that the CARFAX is posted for free online by the dealers, and that is even better.

4. Check out reviews at Consumer Reports: Since we didn’t have a particular brand in mind – it became difficult to narrow down choices. At first I was asking people and reading reviews online on any website, but that is not a very efficient way of doing things. A friend recommended consumerreports.org, and I am really impressed with the site. I took a monthly membership and read up on every model that I came across. It offers reviews on cars, and I found them very helpful. In fact, I was thinking of cancelling the membership once I am done with the car, but now I plan to continue with it.

5. Call your bank or credit union well in advance: This is a step where I struggled a bit, and in hindsight would have done things very differently. My own experience tells me that it is better to deal with your own credit union or bank rather than go to a new institution that might offer a lower rate. This is because things did not work out at all when I went rate shopping. But, that is just my own experience, and shouldn’t keep you from rate shopping. What I am certain about is that you should talk to whoever you want to finance with well in advance. If you bank with them – there is a good chance they will tell you in advance whether they will approve you or not, and also what the process will be like. I didn’t do this till the last minute and struggled a bit.

When I did apply, I did so online, which is what comes naturally to me, but I think that was a bad way to start. In hindsight, I would have called them up first and understood their entire process, before starting off things. Doing this gives you more peace of mind while dealing with car dealers, and helps keep things smooth later.

Another little thing I found out was that you need to ask the same question again and again to different agents because after all it’s just a human on the line, and one person may not know all the ways a thing can be done. A second person might give you a different answer and things that you thought were not possible might still be. In my case, I really wanted to scan and email documents instead of faxing them, but didn’t find out I could do it right till the end.

As far as the documentation they require, here is what they usually ask for:

• Pay stubs
• Bill of Sale from the dealership
• Insurance Binder
• Local driver’s license

6. Call your insurance company well in advance: This is not something I did, but a friend told me that he called his insurance company and asked them the rates on 2010 Nissan, 2006 Nissan etc. well in advance and found out there was not much of a difference between quotes. I wasn’t aware till after I settled on a car how much insurance I would pay, and that was something I could have easily avoided. In hindsight, I should have just taken quotes for different models that I was looking at.

7. Get a local license: This is probably not going to be applicable to most people, but I had an out of state license and had to get a local license to process the loan, or title the vehicle in my name.

8. Cars.com app on iPhone is quite handy: There is a cars.com app on the iPhone that is quite handy too. The app is free and allows you to browse through listings and has payment calculators and other tools which come in very handy if you are not in front of your computer, and need to look up something. If you have an iPhone – I suggest you try it out.

9. Take a test drive: As I reviewed these car buying tips, I realized I had missed a simple thing about taking a test drive. This is especially important if you are in the market for a used car. Driving a car for a little bit doesn’t take a lot of time, and is much better than not driving it and discovering something later like the transmission not being very smooth or something else to that effect.

These were just some things that come into mind as I think about my car buying experience and write about car buying tips useful to all. I am sure there must be several other useful things that I missed out, please feel free to leave comments pointing out any tips you have.

Image by Emilio Labrador