So you want to buy a car?

I used to buy and sell cars, the first of three rules I always follow when buying my own car is to never buy from a dealer.

They are in it to make money, and they always mark it up 3-5K or more from what they bought it for.

ex: When I was buying and selling cars. One example was a minivan we bought for like 4500 from someone who was too lazy to put up a classified ad. We sold it to a dealer for 6000, who had it on their lot for 9500 the very next day.

So to save yourself huge amounts of hard earned money, only buy from individuals selling their vehicles.

This also saves you from dealers licensing and titling fees. Which are usually between 300 and 600.

Second rule:  A car is a terrible investment.

There are two ways to go about your vehicle purchases throughout your life so as to minimize the loss in value of depreciation. One is to buy fairly new vehicles and never keep them for longer than a year before reselling them for even money or not much less than what you bought them for. But the more common option is to buy a good older car that has already depreciated in value. I use this option. Generally after about five years a car has undergone the bulk of its depreciation. For a college student, if a vehicle was necessary, I would recommend getting a car about 8-10 years old, with low miles and a good reputation. Honda, Toyota, Nissan and more recently, Hyundai are generally good vehicles, not only because of reliability but for their resale value.

Third rule: Make sure it’s not a beater.

This can be tricky. Your best way to check this is a series of questions you can ask the seller over the phone:

Has it ever been in an accident/wreck? (ie: salvaged or rebuilt title)

How often do you change the oil?

Is there anything wrong with it?

Have you had any problems with it?

Has the car ever been smoked in?

And why are you selling it?

If your phone conversation with the seller passes all those questions and they don’t seem too sketchy (lying) then the next step is to do your homework on the car.

1)      Check the nada.com value of the vehicle. (always base it off of the lowest number)

2)      Compare that number to what else is available through other classified ads like KSL.com, autotrader.com, craigslist or the newspaper.  I generally do most of my searching on ksl. (This step is where you might also find another great deal)

3)      Don’t be afraid to call on every car. Even if you aren’t really that interested in the vehicle. You may be the only person to call and the seller might just need to sell it fast and be willing to give it to you for next to nothing. (And if you really don’t like that car. You can always sell it for a profit. You are allowed to sell up to three cars per year before this state makes you get a dealers license.) Also, if a vehicle is sold. Ask if they mind sharing what they sold it for. That is another good way to compare what you should be paying.

When you go to see the vehicle:

Look the vehicle over for any obvious damage, pointing it out to the seller as you go along. This can wear down the value in their eyes and prepare them for the lower offer you might give them to offset your cost.

            1) Dents/scratches

            2) Marred or damaged paint

3) Look for a puddle of oil under the car. Or any oil covering any parts of the engine, top or bottom)

4) Tire wear (unless the tires are new you can say that its going to need tires to pass inspection)

            5) Windshield cracks/rock chips (Ask if they have been repaired.)

Negotiation:

#1 rule: Buy low, sell high.

Always start lower than you are willing to pay. As the seller started higher than they are willing to accept.

Start with the nada wholesale trade in value. Deduct from that number if it has ANYTHING wrong with it. (see the above list) You may not really care if it has a scratch but make a fuss over it to get the price down.

Remember that it is a business deal, until the sale is finalized. Don't get too attached to it or you may end up paying more than necessary.