CHAPTER 1
Cars
The most difficult calls I take on my radio show involve cars. We call
them "razor blade" calls, which means the situation is awfully bad. A
typical call involves someone who's recently purchased a used car,
sometimes for several thousand dollars, only to find it is riddled with
problems. They're faced with impossible choices. The vehicle often can't
be repaired properly, and the dealer won't take it back. That could mean
scrapping it, absorbing an expensive loss, and trying again.
It's even worse if the buyer is making car payments on a useless
vehicle. These situations are very sad, because in many cases nothing
can be done to help the caller. It's simply too late.
What I hope to do is educate you so that you can avoid the most common
mistakes, and at the same time buy a car more effectively, with less
stress, and probably get a better deal than you ever have before.
I want to teach you the right way to buy a new car or a used car,
finance that purchase, and get it fixed if something goes wrong.
Buying a New Car
There are a lot of tools available today to help you buy a car.
Unfortunately, most people don't take advantage of them, because they
get caught up in the emotion of buying. If money matters to you, put
that emotion aside and be smart about your car purchase.
The first thing to do is to prequalify for a car loan, so you'll know
how much car you can afford and what type of monthly payment you will
have to budget. It also means your purchase won't collapse because you
can't get financing. The best place to prequalify is at a credit union,
because they're cheaper -- credit unions usually will offer car loans at
1.5 percentage points below what a bank will charge. If you're not a
credit union member, check www.cuna.org, to see if there's a credit
union you can join. Or try online lenders such as www.eloan.com, whose
rates usually will be at least a full point below those of a traditional
bank. But even if you prequalify at a bank, that's better than just
walking into a dealership and trying to get financing there.
Once your financing is set up, decide what kind of car you want. One of
the best times to look at cars is when a dealership is closed, so
there's no salesperson there to pressure you. It may sound strange, but
a shopping mall parking lot also is a good place to look at a lot of
different vehicles. Just don't act like you're trying to steal someone's
car.
Everyone wants a car that will run dependably and stay out of the repair
shop. The best way to improve your odds of getting a trouble-free car is
to check out the repair records of the models you like. Consumer
Reports magazine is the best place to find repair data on cars. Each
year, the magazine's April issue is devoted to car buying, and it
contains detailed ratings and data on a variety of models for several
model years. Consumers Union, which publishes Consumer Reports,
also publishes a car-buying guide that is available year-round in
bookstores. Consumer Reports is available online for a monthly
fee at www.consumerreports.org.
Of course, no repair data is available on newly introduced models. I
don't recommend buying a new or radically redesigned model, because if
you do, you are the guinea pig for any problems the vehicle might have.
After a few model years, you have a better idea if a car is well-made
and worth purchasing.
It could be worth a fortune to you in the long run.
Clark Howard is the host of The Clark Howard Show, a radio talk show syndicated on more than 150 stations around the country. He is also a featured commentator on WSB-TV in Atlanta and a columnist with the Atlanta Journal Constitution. He lives in Atlanta.
