KELLEY BLUE BOOK

How to Resolve a Private Seller Lien

May 11, 2018 by admin 4 Comments

Remove the lien and take ownership of the vehicle.

When shopping for a used car, you stand to save money on your purchase when buying one from a private seller. Dealer markup can add hundreds to well over a thousand dollars to the price of a car, money you can save by negotiating directly with the vehicle’s owner.

If the owner is still making payments to a lender, then there is a lien on the car to remove before you can buy it. A lien essentially locks down the car’s title until the loan obligation no longer comes into play. The following are the steps to take to resolve the lien:

Step No. 1: Learn the Vehicle’s History

No used car deal should take place before confirming the vehicle’s repair history. That information is available through various sources, including Carfax.com, a company that compiles vehicle history reports specific to a car’s vehicle identification number (VIN).

A vehicle history report should show most of its repair history except the work that the owner performed on his own, work not reported by independent sources and anything else not reported by a repair shop. Importantly, if the car has been in an accident or damaged by a flood, then the history report should reveal that information. But they’re not perfect, so buyer beware. (Here is an excellent article that details the limits and sometimes the pitfalls with vehicle history reports — Limitations and Problems with Carfax or any Vehicle History Report).

Step No. 2 — Confirm Vehicle Ownership

Simply because an individual claims to own a car does not make that person the rightful owner. You need to inspect the title and run the VIN through the National Insurance Crime Bureau VinCheck to verify ownership.

VinCheck will confirm if a vehicle was reported as stolen, but unrecovered. It will also list whether it is a salvage vehicle, one that’s damaged or was seriously wrecked.

Step No. 3 — Inspect the Car With Care

Vehicle history reports can only reveal so much about a car. If you are handy, you can perform
the inspection yourself, otherwise, head to your mechanic and pay him to check the car.

Have the car placed on a lift and examine the vehicle’s suspension system, inspect the vehicle’s frame, review previous repair work and look for leaks from the engine, transmission and the coolant system. A mechanic can also pull up the check engine codes to look for potential problems.

No independent analysis will be foolproof, but your mechanic can offer his opinion on whether the car is worth your consideration and for the price you have in mind.

Step No. 4 — Negotiate Your Price

How much a private seller still owes his lender may have a bearing on your negotiation. However, if this individual owes more on the vehicle than what it is worth, you need not offer to pay that price.

Instead, your price for the car should be based on its current market value, its condition, mileage and vehicle’s trim level (content). Visit Kelley Blue Book to obtain its private party value. You can show your mechanic’s report to back up your offer.

Step No. 5 — Head to the Bank

Never give money to a private seller and have him handle the paperwork. Because there is a lien on the car, you should meet the seller at the bank and complete the deal in front of a representative.

Explain to the bank representative what transaction is taking place and have the seller ask for the loan’s payoff amount. Your funds plus whatever the seller still owes his lender will remove the lien, freeing the vehicle for a title transfer.

Let’s Make a Deal

Finalizing a deal for a vehicle with a lien on it is not always an easy process. That said, with persistence you may be able to conclude the deal and obtain a quality car for a below market price.

See Also — 8 Steps to Buying a Used Car

How to Buy a Repo Vehicle

January 1, 2018 by admin 2 Comments

Should you consider a repo vehicle as your used vehicle?

The repo man just paid your neighbor a visit, hooking up his late model sport coupe to the tow truck and pulling away. Your neighbor tried to argue with the driver, but the driver ignored his pleas, shoving a document into his chest before driving off. Unless your neighbor resolves the problem his car will stay impounded until it is sold to a new buyer.

Repo Shopping

Your neighbor’s loss can become your gain, although you might not want to buy his vehicle back if you value his friendship. Instead, there are hundreds if not thousands of cars that enter the market each week, ranging from basic Kias to high-end BMWs.

There are a number of ways you can buy a repo including from a lender, a dealer or at auction. The downside is that you may not have the vehicle’s entire repair history to review, perhaps leaving you wondering if the owner let the car go because of unresolved maintenance issues or for some other problem. Also, cars that are repossessed generally are neglected as owners that can’t make loan payments usually won’t keep up with repairs.

Lender Repos

The company that financed the repossessed vehicle wants to sell it. And they want to stem their losses before they worsen.Clearly, lenders lose money when a car is repossessed. If the vehicle is new and in excellent condition, there may be several people interested in buying it. Lenders may accept bids for the car or set a fixed price and sell it to the first qualified buyer.

If you are interested in buying a repo vehicle, get your loan together first. Or, the lender may provide financing if your credit is very good. Perform due diligence by reviewing the car’s repair history and finding out from the lender why the car was repossessed.

Repo Dealers

Some car dealers specialize in buying repossessed cars from banks and auctions, making repairs and detailing them for resale. You will want to avoid any car that was salvaged, meaning that the vehicle was declared a total loss by the insurance company.

However, there are different kinds of damages that can give a car a “salvage title” including flood damage, hail damage and theft recovery notes Ronald Montoya writing for Edmunds.com. If you are handy with a car and you don’t mind the risk, then find out as much about the car’s history before moving forward.

Auction Houses

Many repo vehicles end up at public auction and are made available for sale to the highest bidder. However, these are also the cars that lenders and dealers may let pass by, meaning you need to be extra cautious before placing a bid.

First, check the vehicle identification number (VIN) to ensure that you have a match. If the car has been rebuilt, the VIN may not match. Move on if it doesn’t.

Second, look carefully at the car. Inspect the car inside and out, and crawl underneath to look for signs of water damage, frame repair and rust. Pull the dipsticks to verify that all fluids are clear. If something looks or smells odd there could be a larger problem lurking within.

Third, know the vehicles worth. If it is being sold “as is” then you know that there are problems present. Compare the auction house value with the Kelley Blue Book value. Set your top price and never get pulled into offering more for a car than what you’re willing to pay for it.

Your desire to find a repo vehicle bargain should never trump common sense. If you’re not particularly handy with car, this entire process should be left to those that are. Even weekend warriors know that a repo can require much TLC, with their time heavily invested in remaking a loser into a winner.

Used Cars: Where the Bargains Are

September 20, 2017 by admin 3 Comments

Bargains on used cars are available if you know where to look.

The average price of a new car is approximately $35,000 according to Kelley Blue Book, a price point that’s well beyond the reach of many car shoppers. One way to avoid that high cost is to settle for a lower-priced model, but that may mean making sacrifices on vehicle size, quality, and comfort. Another way to avoid the high cost of a new car is to buy used, particularly cars that are two to three years old, bargains that can be found by weighing the following several important considerations.

Consideration No. 1 — Initial Depreciation

The major drawback of buying any new car is that first-year depreciation can lop 20 to 30 percent off of its vehicle’s value. That means a $36,000 new car may be worth just $25,200 after the first year, a loss that the original owner must take.

That loss should be viewed as an opportunity for used car buyers. While most owners will hold on to their cars for a few years, cars that are leased are typically returned after just two or three years. Leased cars are sometimes resold at auction, but they’re also available for sale through new car dealers to help bolster inventories.

Consideration No. 2 — Larger or Less Popular

Depreciation for more popular models comes in lower than the industry average. That means if you are looking for a bargain, you should turn your eyes elsewhere.

Elsewhere includes models that consume more fuel such as big SUVs or ones that are simply not that popular including vehicles from discontinued brands or models.

Suzuki quit selling its vehicles in the United States in 2012. The company was never a big player on the market, but it did offer several smaller models such as the SX4 that were good on gas.

You can check the market value of any used car for free by visiting Kelley Blue Book. Suzuki may no longer sell its cars in America, but it still is available to service your vehicle and to handle warranty concerns.

Consideration No. 3 — Wear and Tear

If you find a used car that is still under the manufacturer’s new car warranty, then you have a bonus in your hands. However, you must ensure that the warranty transfers to you and at no cost.

Other warranties that may still be in effect include rust and powertrain, the latter sometimes good for up to 100,000 miles. If you are shopping for a used hybrid vehicle, the typical warranty is for eight years or 100,000 miles on your hybrid battery system.

One model, the Hyundai Sonata Hybrid, offers a lifetime warranty, but it is not transferable to a new owner. Regardless of warranty considerations, there is a mileage point where buying a used vehicle makes sense. That point is before major repairs or expensive maintenance takes place.

Used cars that have under 50,000 miles on the odometer and have been well maintained, should go another 50,000 miles before more expensive maintenance and repairs become a factor. Still, tires are generally replaced by 50,000 miles and brakes, oil, air filters, batteries, and fluids will have been serviced or replaced. Costlier repairs such as water pumps, hoses, belts, mufflers, suspension system parts and electronic sensors can happen at any time.

Major work such as engine repair, transmission replacement or body work can usually be avoided if a car has been properly maintained. Ask the owner for car maintenance records and obtain a vehicle history report.

Consideration No. 4 — Consider the Seller Pool

You can find a bargain on a used car by careful shopping. Know that if you choose to buy from a dealer, you will pay the customary mark up to cover the dealer’s expenses and profits. However, you may also receive a limited warranty, something that a private seller may not be able to offer.

New car dealers stock their inventories with newer used cars to supplement their new car inventories. Used car dealers may feature newer cars to much older models. Either way, you will face the dealer’s mark up.

You can also consider a car from a rental car company. Enterprise, Hertz, and Budget are among the companies that sell off their fleets to private buyers, cars that typically have 12,000 to 50,000 miles on the odometer. You will find, however, that there is little room to negotiate on price. What you will receive is a vehicle that has been well maintained. Thus, your bargain may not be on price, but on care.

The best bargains on used cars are typically through private party sellers. These individuals are simply seeking to sell a car they no longer want or need and will price their cars accordingly. You can verify what any vehicle should fetch by checking its private party value through Kelley Blue Book or NADAGuides.com.

Used Cars: The Art of Negotiation

Your best deal on any used car can be had by negotiating the vehicle’s price. With the information you have on hand about its value, you have a good starting point for your negotiation.

Present your best offer, await the seller’s counter offer, then find a middle ground that will satisfy both parties.

See Also — 8 Steps to Buying a Used Car

How to Maximize the Resale Value for Your Used Car

August 30, 2017 by admin 1 Comment

Used car marketing and how to get more for your vehicle.

You own a car and want to sell it, but what you have decided not to do is to trade it in for a new one. That’s a good move because what a used car dealer will give you in a trade is often less than what you might get through a private party sale. Still, setting a price for your used wheels can be a bit of a challenge, therefore consider the following points as get your ride ready for marketing.

Understand Your Local Market Conditions

Toyota Tacoma X-Runner Where you live will have a bearing on how fast your used car will sell and for how much. If you own a convertible, you should be able to fetch top dollar in southern California, but not so in Wisconsin. If you live in Florida and own a 4×4, you will find demand weak nearly everywhere across the Sunshine State.

Know your local market and target your vehicle to people that may want to buy it. For instance, if you own a compact used car that is in decent shape, it may appeal to a college student or to a family in need of a second car. A minivan or crossover can make for a great family vehicle while a classic sport coupe may appeal to collectors.

Find Out What Your Vehicle Is Worth

2014 Chevrolet Silverado High Country You have determined that there is a market for your used car. That is good! What you need to figure out next is what your car will fetch in your market. You can discover that price online by checking out the pricing guides offered by Kelley Blue Book or Edmunds.com, plugging in your information including the make, model, model year, options, mileage, condition of the vehicle and where you live.

Note that you may find multiple prices listed. One price will be your car’s trade-in price, the other its private party value. If you have accurately pinpointed the car’s condition, your price will come in somewhere between the two. Of course, the higher the asking price, the more room for negotiation — provided that you don’t set the price too high and scare off potential buyers

Survey Your Local Market

BMW 435i We already discussed selling certain types of vehicles in markets that might not be a perfect fit. You can’t do anything about where you live, but you can survey the market to find out what is selling in your area.

Visit popular online vehicle selling sites such as eBay Motors and Craigslist to learn what is being marketed. Attempt to find your make/model vehicle or one similar to it in the listings. Find out how it is being priced and whether bids are being received. Look at the competition and then set your price accordingly.

To move your vehicle fast, set the price below its market value. You will attract more shoppers and may be able to negotiate a higher price if several buyers step forth.

Explore Your Marketing Options

Pontiac GTO Consider pricing your used car for an unusual amount to attract buyer attention. For instance, if your car’s value is $7,500, you may want to run an ad retailing it for $7,496.04. The odd pricing, especially if featured in the title of your ad, will draw more attention to your listing.

Your listing should be complete, offering as much details about the used car as possible. Plan to upload at least 10 photos of your car including pictures of its exterior with close up shots of the wheels, fascia and rear deck. Inside, show the seats, the carpeting, the dashboard and other special features including the navigation system. Lift the hood to show how clean the engine bay is. Highlight the vehicle’s strong points in your listing and don’t forget to include your contact information.

Smart Selling Considerations

BMW M6 Know that buyers will want to scrutinize your used car carefully before making an offer. Make those appointments during the day or in the early evening before the sun goes down.

Allow the buyer to take your used car to a mechanic if requested, but use your judgment if you fear that your vehicle might get stolen. You can always accompany the buyer and be present when he speaks with the mechanic too.

Prepare to negotiate in earnest with a bottom selling price in mind. You won’t reveal that number to the buyer, but it is something to keep in mind as your negotiate. Once you settle on a price, accept cash for your vehicle, sign over the title, remove the plates and notify DMV and your insurance company that you sold the car.

How to Sell Your Car to a Private Party

May 5, 2014 by admin 1 Comment

Buy a new car and the dealer may urge you to trade in your old car. Unless you have plans to keep it or give it to someone else, the dealer’s offer may be a tempting one. Then again, if you choose a private party sale you stand to make hundreds of dollars more in a sale to a new owner than you would receive as a trade in. The following instructions can help you get the most money for your old car.

1. Establish a selling price.

Honda Accord You own a 2008 Honda Civic coupe with 75,000 miles on the odometer. That’s a quality vehicle with relatively low miles, an EX model in very good condition.

Head to Kelley Blue Book (KBB.com) to find out what your car would fetch in a private sale. As of May 2014 KBB says $12,072, far above the $9,800 that the dealer offered as a trade. You can set your price to align with KBB’s estimate or choose a slightly lower amount to market it aggressively. Also determine your bottom offer. For instance, if you’d accept $11,000 for it, keep this price in mind when negotiating.

2. Get your car ready to sell.

Your car looks good, but it should look in tip-top shape before selling it. You’ll get more for it if it looks and runs great.

Washing and waxing the car is just the start. You need to have it detailed just as the professionals do. You could have someone else do it and pay the $100 to $150 cost, a smart option if you have a scratch that goes down to the metal. The professionals have the equipment to make scratches disappear and can handle small dents too.

Whether detailing the car yourself or using a professional auto detailer, your car should have its mats cleaned with a stiff scrub brush, the paint polished and waxed, a protectant applied to the trim, the air vents cleaned out with cotton swabs, and the glass and tires cleaned.

3. Show buyers your receipts.

If you want to smooth the car sale then purchase a vehicle history report and include it with the maintenance receipts and repair record. CARFAX, AutoCheck, and VinAudit are the companies that provide this service for a fee. History reports demonstrate to the buyer that they’re getting a “clean” vehicle, one that hasn’t been damaged in a flood or stolen.

If you do not have receipts, you can offer details when the maintenance was done. Write up a list of items repaired or replaced within the past year. These should include the oil, oil filter, air filter, wiper blades, and fluid top offs. Even further back you can tell potential buyers when other work was done including tire replacement, brake pads, shoes, muffler, battery and other components. Receipts are best, but when you don’t have them an explanation may suffice.

4. Spread the word.

You can cast a narrow or wide net to sell your car. If you prefer to deal with just a few people, place a notice at work outlining your sale. Tell friends, family and neighbors too.

To reach more people, write up an ad and place it online, such as on Craigslist. Offer additional details about the car including the make, model, model year, trim level and anything else of interest. Take as many as a dozen photos of the car’s interior and exterior, focusing on all sides of the vehicle. Inside, concentrate on showing the seats, dashboard, storage compartments and other features. Provide a contact email address; only share your phone number with people that have expressed strong interest in your car.

5. Make appointments and schedule the test drives.

Only spend time with people that are sincerely interested in buying your vehicle. One downfall of a private sale is the time required to promote the vehicle, make appointments, and allow for test drives.

Speaking of test drives, never allow anyone to take your car out without you riding along. It could be the last time you see your car. Riding along allows you to explain the various features of the car and answer some questions. You can also show people how the climate control, audio and navigation systems work, how to adjust the power seats and explain the other features.

6. Entertain offers.

Serious shoppers will make an offer for the vehicle as soon as they decide they want your car. Expect that they’ve already done their research and know the value of your car. If their information is correct, then you should receive an offer that is competitive. Generally, however, it will come in on the low side.

You can counter any offer without disclosing the lowest amount that you will accept. The process may take some back and forth negotiating, but it should result in a deal that is acceptable to both parties.

An all-cash deal is easiest to close. If you are okay with a check, only accept a cashier’s check. Or, go to this person’s bank and have them write a check for cash to the bank and hand you the money.

Private Party: Sell Smart

The last matter to tend to when selling a car is transferring the title and tags to a new party. This procedure varies from state to state, therefore a visit to the Department of Motor Vehicles with the buyer can complete this process quickly.

See Also — Tips for Teens Buying a First Car

(Here is an excellent article that details the limits and sometimes the pitfalls with vehicle history reports — Limitations and Problems with Carfax or any Vehicle History Report).

What Every First-Time Car Buyer Should Know

April 20, 2013 by admin 5 Comments

If you are in the market for a new car for the first time, your feelings of uncertainty and fear should not be discounted. After all, you are beginning to undertake an important process, one that can have widespread ramifications. The first time car buyer should do his research, shop wisely and base his decision on the information assembled, before confidently buying a new car. Read on and we will discuss how this can be accomplished.

Car Buyer

1. Know what you can afford. Before you begin to search for a new car, determine what you can afford. Your eye may be on a Ford Mustang GT, while your budget is saying Hyundai Elantra hatchback.

Align your dreams with reality and you won’t grow frustrated or disappointed. That Mustang GT can wait if it is out of your price range.

2. Understand what you want. Some people look at cars as mere appliances. Others choose vehicles based on factors such as performance, off-road utility and cargo capabilities.

Choose the type of vehicle you want before moving forward as there is no sense considering any car that does not meet your criteria. Avoid confusion by narrowing your search as quickly as possible.

3. Keep in mind the amenities. Once you pinpoint the type of vehicle you want, you need to identify the amenities or features that are important to you. There is so much to consider here with some of the basics including the transmission offered, the size of the engine and overall fuel economy.

You will also want to consider other features that may be important to you including safety, turn-by-turn navigation, audio systems, power accessories, seat surfaces, the number of storage compartments and so on.

4. Know the prices. Never go by the sticker price when buying a new car. That amount represents the “suggested retail” figure and nothing more. Usually you will pay less, maybe far less at times.

yell What you need to do is investigate what the dealer paid for the car, something that you can uncover by visiting sites such as Consumer Reports, Edmunds and Kelley Blue Book that provide that information, for a fee of course. This effort will show you how to begin your negotiation, enabling you to save hundreds, perhaps thousands of dollars off of the sticker price.

5. Visit a dealer. You may have several dealers in your area selling the same make/model of vehicle. Conventional wisdom would say, “choose the dealer nearest to your home.” That wisdom comes from the idea that your car will be serviced by the same place that sells it to you. Just so you know, you don’t have to return to the selling dealership for service work.

When you visit your dealer, inspect the various vehicles available and ask for a test drive. Make sure that your drive is long enough to give you a strong idea to help you know whether this vehicle is right for you. Do not identify yourself as a first-time car buyer.

6. Plan your negotiation strategy. Once you are done with your test drive, you can commence negotiation on a new vehicle purchase or wait to gather more information — it is your choice: don’t rush into the car-buying process and make sure you understand what a vehicle is worth.

When negotiating, you should consider the dealer’s price and the rebates available. Work from a position of strength and that means knowing your price and the incentives the dealer has on his side. Most dealers will cry poverty with a low offer, but you still can come in low knowing that they will make a profit thanks to holdbacks from the car manufacturer.

loans

7. Arrange your financing. You can get auto loan financing from a variety of sources including your bank, your credit union and even the new car dealer. With the latter, you will want to negotiate your best price first, then talk financing. Some dealers will try to combine the two, but don’t let this happen as that effort will simply muddy the waters.

You may be better off arranging to finance separately and then go into your deal knowing what you can afford instead of what the dealer says that you can afford. Sometimes a vehicle will come with a special incentive such as cash back or special financing. If you arrange your financing elsewhere, then take the incentive and apply that amount to your down payment.

Buy Your Car

After carefully following the steps as outlined, you are ready to buy your car and drive it home. The process may not have been a quick one, but by carefully doing your research you were able to save yourself some money. Those savings are something that you can never get back if you hurry along the process.

Your first-time car buying experience won’t be your last one. Make it a good experience and you gain the confidence to strike a new deal again.

See Also — Zero Percent Financing: Is It Worth It?

How to Buy Out Your Car Lease

September 29, 2012 by admin 1 Comment

You have been leasing your car for some time and are coming to the end of your lease term. Your mind is on what to do next, including whether to buy or lease your next vehicle. If you like your current car, you can keep it after the lease expires. Most leases include a “buy option,” one that allows you to purchase your leased car.

1. Review your paperwork. When you leased your car, you were given several pages of paperwork including a car lease agreement. That agreement spells out the terms of your lease and provides instructions on returning your car at the end of the lease term. It will also give you a dollar figure for what the car can be purchased for at the end of the lease term.

2. Get in touch with your dealer. Call the dealer where you leased your car and ask for the buy out price of the car. That price may differ from your lease agreement. If it comes in lower, you can take that amount or you may be able to negotiate a lower price. You can find out the current value of the car by visiting Kelley Blue Book and clicking on the link for “What Is My Car Worth?”. If the price comes in lower, use this information to negotiate a lower buy out price.

3. Arrange your financing. If you have cash to buy your leased car, then present a personal check to your dealer for the full amount. If you do not have cash, you can arrange financing to cover your loan. Your bank or credit union, or some other financing company, may extend a loan to you. Tarry Shebesta, president of Automobile Consumer Services Corp. recommends that you contact the bank that financed your lease and ask them for the buy out amount. He also recommends that you “get the phone number of the person in charge of making the decision” and explain that you would consider financing with them. Shebasta explains to Edmunds readers to make an offer and see if it is an amount that your lender can live with.

4. Make an appointment with your dealer. When your financing has been arranged and you have a check in hand, drive your vehicle to the dealer and complete your paperwork. If you are paying cash, you’ll give your dealer a personal check. If you are financing your vehicle, your lender will supply a business check to you.

5. Visit DMV. Once you have finalized your transaction, visit your department of motor vehicles and register your car. You will obtain updated registration and fresh tags. If you bought the car with your money, a title will be sent to your address. If you took out a loan to buy your car, the title will be sent to your lender who will hold a lien on it. Contact your insurance company and explain that you are keeping your leased vehicle. Update your insurance to reflect your current coverage needs.

Leasing Considerations

If you want to buy out your lease before the end of the lease term, that may not be a good idea advises Dr. Don Taylor writing for Bankrate.com. Consumers can find themselves upside down with a leased car, owing more on it than it is worth. Instead Taylor advises that you should wait until the end of the lease to exercise your buy option.

See Also — How to Prep Company Cars for Employees

5 Year-End Car Buying Tips

September 5, 2011 by admin 1 Comment

The calendar may not show that the year is nearing an end, but for automakers the model year transition is now taking place. This means that the car buying consumer should consider how best to take advantage of current market conditions when shopping for a car. To that end, the following five tips can help you get the car you want and save you hundreds, perhaps thousands of dollars on your purchase:

1. Know your trade-in’s value – New car shoppers will sometimes sell their old car to a private party, but most people trade their vehicles in, using those funds as a down payment for their new car. Used car prices have surged in recent years, but you may not know that the six-year old compact car you own is still worth at least $10,000. For example, KBB states that a 2005 Toyota Corolla LE in good condition with an automatic transmission and 60,000 miles on the odometer can fetch $9,025 on trade-in. [1] Moreover, if sold to a private party it is valued at $10,765. You need to know what your current car is worth before you negotiate the purchase of your new car.

2. Model end specials – Some of the biggest discounts available are for cars that have been discontinued and for those going through a generational change. For example, three GM cars are no longer made and, if still available, can yield significant savings for the buyer. The Buick Lucerne, Cadillac DTS and Cadillac STS were discontinued with the 2011 model year. The DTS, for example, offers a $7,000 discount. [2] If you can handle buying a discontinued model, then you’ll save big. Otherwise, consider buying an outgoing generational model such as the 2011 Toyota Camry. For 2012, the Camry gains fresh sheet metal and new interior.

3. Search online – The days of dealing with one dealer are over for many consumers. The Internet has made it easier to shop and save, enabling consumers to compare prices between several dealers. You can negotiate and finalize your purchase price right online, choosing the car you want and signing your purchase papers as soon as you get to the showroom. Tip: Test drive the vehicle you want before making your purchase – you don’t want to be stuck with a vehicle you really did not want.

4. Arrange your financing – Some of the lowest interest rates on new car loans are offered by dealers who use the automaker’s financing arm to get you into a new car. If zero percent financing is being offered to you, then you won’t be able to beat this rate on your own. However, if it comes down to low-rate financing and a generous rebate, such as for $2,000 or more, then shop for a loan with your bank or credit union. If you have excellent credit, a loan rate of 4 to 5 percent is possible. Secure financing on your own and tell the dealer you’ll apply the rebate to your down payment. Use an auto calculator to determine how much you can save. [3]

5. Consider other options – Buying a new car may be what you want, but leasing could be the best choice for you especially if you expect your transportation needs to change two or three years out. If buying a new car is definitely out of your reach, consider purchasing a late model used car from CarMax.com or a reputable used car dealer. You might also be able to assume a lease through a company such as LeaseTrader.com.

The new car market remains depressed which means that car dealers are battling for your business. Be thorough with your research, weigh your options and be prepared to negotiate the best money saving deal that you can find. Then, enjoy your new ride!

References

[1] Kelley Blue Book; 2005 Toyota Corolla SE; September 3, 2011

[2] Cadillac: 2011 Cadillac DTS Standard

[3] Bankrate.com: Auto Loan Calculator

KBB Forecasts Used Car Price Bubble

August 10, 2009 by admin 1 Comment

Used car prices will often fluctuate depending on the popularity of the vehicle as well as other factors including the price of gasoline. Indeed, in 2008 owners of compact cars saw their prices increase as gasoline topped four dollars a gallon. Getting 30 mpg on the highway is certainly advantageous when pump prices are high resulting in an increase in used car values.

Fewer Used Cars Available

Kelley Blue Book (KBB) is seeing another factor play in with the used car market and that factor is the federal government’s car scrappage program. Called “cash for clunkers” by consumers, the Car Allowance Rebate System (CARS) program has already removed about 250,000 used cars from the market, with an additional 500,000 slated for scrappage as the program is extended thanks to two billion dollars in additional funding.

KBB says that the clunkers program is removing used car inventory at a faster rate which means that dealers are stocking up on used car inventory while they can. This quest for used cars is pushing up prices, creating a bubble scenario.

“Dealerships have reported increased foot traffic, creating a false sense of automotive market recovery,” said Alec Gutierrez, senior analyst of vehicle valuation for Kelley Blue Book. “As a result, dealers are going to auction to restock inventory, driving up used-car values. However, the effect of a supply reduction of this magnitude could have an immense impact on these values in the short-term, exacerbating the already-limited supply at auction. If this bubble comes to pass, dealerships will end up with excess inventory of both new and used vehicles and be forced to offer deep discounts to remove surplus inventory, driving values down. Ultimately, there will be the possibility of a severe contraction in auto sales as soon as the Cash for Clunkers program runs out of funding.”

Most Sought After Brands For New Car Buyers

KBB also found out in a recent survey that one in ten car shoppers have moved up their new car purchase thanks to CARS. The top brands being considered by people turning in their clunkers are Toyota, Ford, and Chevrolet.

The federal government’s program was supposed to end on November 1st or when funds ran out, but with only one billion dollars in initial funding, CARS was quickly overwhelmed by customers thanks to pent-up demand and huge deals on new cars.