Help me buy a car (and not get hosed)

I’m currently looking into buying a used car, something I’ve never done on my own. I have a few concerns, and I don’t want to go into a dealership looking like an idiot, or getting screwed.

I have about $1000 to put down, although I could go a bit higher, and no trade-in. I’m eyeballing cars that range from 2000-2004, generally in a price range of $5900-$7900. I’m still somewhat undecided as to what exactly I want, although I’m leaning toward something like a Jetta or some model of Jeep.

My questions & concerns:

  1. Credit. I don’t have a stellar credit rating, I believe I fall somewhere in the “fair” category, last I checked. Is this going to keep me from getting a loan? Will I just pay a higher interest percentage? Will they ask me to have someone co-sign no matter what? Do I mention this up front, or do I wait until I find a car I like and am doing all of this paperwork, only to be shunned at the last minute?

  2. Negotiating price. I have no idea how to do this. I pay sticker price at garage sales.

  3. Would I be better off buying something (really cheap) not from a dealership-type place, ie a craigslist ad, and not worrying about a loan at all? My biggest concern with this is that there won’t be any type of warranty should the car crap out in three days.

  4. I’m currently living in Missouri, but there’s a strong possibility that I’ll be moving home to upstate NY in a few months. Is it bad form to buy a car here that does have a warranty, only to move out of state? The benefits to buying here are that there is less sales tax, and in this area it is mostly highway driving, so I image less wear and tear. The prices seem to be a bit cheaper as well.

Any insight from fellow dopers would be GREATLY appreciated! Thanks! :slight_smile:

I can’t address all of those issues, but of the ones I think I can:

  1. As long as your credit is not horrible most dealerships will work with you. You’ll probably get a slightly higher interest rate, but you can always get a long term loan and overpay the installments to offset that. As long as you don’t have defaults/judgments/bankruptcies or a ton of late-payments on your credit report they probably won’t require you to have a co-signer. I wouldn’t mention this up front; wait until they have the paperwork already started. Car salesmen NEED to make sales, so if they’ve already gone that far, holding that info until the wheels have started rolling so to speak will not impede your ability to purchase the vehicle.

  2. Your first opportunity to negotiate will be immediately. Salesman walks up, you say, "The sticker says , if I want to drive away with this car today, I can pay you [$1000 less than X] right now. They’re not going to go for it(and be suspicious if they do), but you’ve established that you want to bargain. Just ask lots of questions. What are the options? How much more/less will it be with/without that? Do NOT get the “undercoating,” that’s always BS. Most dealers have a few hundred dollars leeway, just talk it out. Emphasize you want a car today, and if they can’t help you’re going to check out [nearby competitor].

  3. I’d be careful about this. You may get a better price, but the likelihood of getting screwed are much, much higher. If you decide to go the craigslist or Autotrader route, make sure you have an opportunity to see the car first, get a car history report on it, and be very careful about who you deal with. There are plenty of shady characters trying to unload lemons or run scams.

I know next to nothing about cars, and I hate to haggle. When I bought my last car, I went to cars.com and vehix.com to do research. Once I decided which car model was best for my needs, I searched all over the internet for the best price, with the lowest mileage, with the features I wanted, in my price range, within 100 miles of my home. That way, I had a good idea of what the going rate was for this type of car, which ones were overpriced, etc.

Then I went to an internet site (it was four years ago, I forget the name of the site) where you plug in your info, and various banks “bid” for your business on a car loan. I chose one that offered me the best rate (I think it was 7.0% at the time, but 6.5% if I agreed to sign up for automatic withdrawal from my bank account each month - that was ok with me). So when I went to the dealership, I already had a check in hand (I didn’t have to worry about financing at the dealership, but I didn’t tell them that until I had already negotiated my price).

When I decided on the car I wanted, it was listed (used) for $13,000. I offered them $12,000, they came back at $12,500. They would not budge from that price, but from my research, I already knew that I could not get a better price anywhere in 100 miles for the same car (it was still a bargain at $13k).

So, I felt good that I had gotten a decent price for my car. I think that knowledge and research are key to helping you have confidence that you got a good deal. But, you always have to be willing to walk away if the price isn’t right - don’t fall in love with a particular car. Like they say about women and buses, there will always be another one along in 15 minutes :slight_smile:

I’ve been in the car business for nearly ten years now and can offer some insight.

Many of your concerns can easily be addressed by the type of car you are looking to buy. Generally for vehicles those model years it will be difficult to secure financing if you have stellar credit, even if someone were to offer you a loan it would likely be from a secondary source and the interest rate would be very high. Vehicles of that vintage are also going to be well past their original factory warranty and would not likely qualify for any certification program. So any warranty that would be offered will be third party which, IMHO are all over priced and the claim process creates more hassle than real benefit.

Negotiating is easy if you have access to the internet. As with all things, be prepared. Edmunds.com and kbb.com are both great resources for information and can give you an accurate range of what you should expect to pay. Don’t be afraid to politely walk away from the deal if you don’t feel it is good. This is your proverbial “ace in the hole”.

Taxes always are based on titling address and, trust me, one way or another uncle sam gets his piece of the action.

If I were giving advice to a friend in a similar situation I would recommend sitting down and looking at a detailed budget of what they could afford for a down payment and what they could afford monthly. (one word of caution, always negotiate the sale price of a vehicle, never your monthly payment, it’s an easy way to pay too much). That should give you a range of where you can look. It seems like you may have done this already. But the general rule is if you can afford $300 a month you need to pay around $15k for the sale price.

In the years you are looking, the two vehicles you mentioned can be costly to repair. I would strongly recommend looking at a certified pre-owned Honda. They are insanely reliable and hold their value very well. Being certified from the manufacturer also means they will have decent interest rate loans, and certified warranties are good nation wide.

I do not sell Honda’s. I sell Audi’s, but have had 3 Honda’s in the past 10 years as my personal vehicle that I pay for out of pocket.

Ha - I’m not particularly knowledgeable about cars, and I spotted that part about the model and year and price. It’s true, they don’t want to loan you money to buy a crappy car, even if it’s not especially expensive. Because when it stops running, a borrower loses the incentive to pay back the loan.

Get the Honda, absolutely! I had an '88 Accord I bought in 1991 for $7995 (yep, we paid too much) and paid off the loan in 4 years. Then owned it outright for another 6 years. Had 168,000 miles on it when it finally died (a bunch of things failed, plus it didn’t have airbags, otherwise I’d’ve repaired that master cylinder).

::sigh:: I still miss that car! We have another one now, having tried a Nissan Altima and Ford Focus. There’s just nothing like an Accord (or Civic - used to LOVE their hatchbacks!).

But anyway – one thing to know, you talk about buying it from a dealer so you’ll have some protection in case it croaks 3 days after purchase. If you want that guarantee, you have to make sure you’re buying a car with a warranty. It’s **NOT **automatic, though some dealers DO offer warranties on SOME of their used cars.

And you DON’T have the option of changing your mind on a car purchase. I know there’s that “3 days to cancel a transaction” rule, but it doesn’t apply to cars.

Oh, and we’ve bought cars with add-on warranties and kinda came out even on the cost, maybe a little bit ahead, but the garage that did the repairs had to haggle to get the reimbursement. I don’t think it mattered that we were out-of-state, as the warranty is sold by a third party anyway.

There ARE instances where states expect you to pay sales tax on purchases made elsewhere, but I suspect it doesn’t apply when you were a resident of the state in which the purchase were made.

Do your research. As mentioned upthread, look at edmunds.com and kbb.com . That should give you a pretty good idea as what you should be paying.

Remember, the salesperson has to sell to make money. You do not -have- to buy. You want to, but you do not have to.

The salesperson will do their utmost best to separate you from your cash. They are not your friend. They are not your buddy. They are trying to do their job; they are trying to make money from you.

If it is a dealership type place, ask to take vehicles you are interested in out for a test drive. You do not want to be buying a car that doesn’t fit -you- right.

See if you can pre-qualify for a loan at a credit union etc. At least speak to them about what they think your loan amounts and rates might be.

Make it a point to shop. No, there is nothing they can do to put you in that car today. You are shopping. Leave your name. Get their card. Let the salesman know that when you are ready, you will call them.

Have a set in stone price in your head. NOTHING they say or do should make you buy something that costs more than that amount.

When you are really truly ready to buy, call the salesman you got a card from and make an appointment to see them. When you arrive, tell them that they have 1 hour to totally complete the deal, or else you walk, since you have an appointment at another dealer then…be prepared to walk.

You’ve done your research; you know what a good price is. Offer somewhat less than that to begin. They counter. Make a final counter (nearer to your researched price) and say that if they do not agree to that, you walk. If they do not agree, thank them, get up and walk out. I doubt you will make it to the door before they agree.

Used Jettas are not reliable before the latest redesign (which was 2005). The 2004s are more reliable than earlier ones of that age, but still not that reliable, and are hella expensive to repair (I know - we have a 2000). Plus the 4 cylinder is underpowered, the turbo is the most unreliable, and the 6 cylinder is OK but needs 91 octane. The diesel is the best one available, but hard to find, especially in your price range. Jeeps, especially the Cherokees, in that age range are about the least reliable cars from the 2000s on the road. Libertys are better but have really crappy gas mileage (they are very heavy).

Hondas are OK but the price on used ones is pumped up vs new ones. I’d buy a new Honda, but not a used one. I’d actually go contrarian right now and look at the Toyota Corolla; the bad press may make them cheaper than usual right now, and if they do a recall on the older ones you’ll be eligible for it. They are as sturdy as cars get.

Re: sales tax - check with New York to see if you would need to pay additional sales tax if you moved from another state. i found this to be a problem after moving from New Hampshire to Kentucky - in order to register my car, I would have had to pay the difference in sales tax between NH and KY on the value of the car - which, since NH has NO sales tax, was $900! I traded in the car instead.

Stay 100% away from Dealer Addon’s.
Don’t let the dealer add anything to the base of the vehicle as it sits on the lot. Not upgraded floor-mats, tires, wheels, “Customization Services”, undercoating… Nothing.

Ditto dealer provided extended warranties.

Also, don’t accept a hard sell. Make your best deal, and walk out. Come back in a day or so.

I came in to say don’t allow them to add “Paint Protection” or “Paint Sealant”, which they will often charge a few hundred bucks for. Paint sealant is basically just a high tech wax that they apply, and you can bu at the store or through a detailing shop for about 10 bucks for a bottle.

Also, getting financing for cars that old is not really all that tough, at least if you have good credit. I just purchased a 2004 Dodge Stratus and had no problems securing credit through a credit union. Under 5% APR. I do have excellent credit, but I don’t think having “fair” credit will completely prevent you from securing financing. You jsut won’t get quite as good of a rate.

A lot of the advice here (waterproofing, sealant) is more suited for purchasing a new car. So, here’s some advice specifically for your situation.

  1. Take a friend. If you are as averse to negotiating as you indicate, have someone help you! When my sister was buying a car, I couldn’t be there to help, but suggested she use the AAA buying service. I don’t know if they do used cars, but you can ask.

  2. Do NOT get emotionally attached to the car you choose. Dealers will try and “sell” you on an emotional level. Avoid this at all costs.

  3. The “$1000 under sticker offer” is very bad advice for used cars. You don’t know how much they paid for the car; it could easily be that $1000 under sticker is still $1000 too high. Dealers make WAY more selling used cars than on new cars for this reason. Don’t be afraid to offer, say, $5000 on a car with a $8900 asking price. Do find out the general price for the car on the Internet, but use that as the high end.

That you can tell what a dealer has from his website give you a big advantage, since you can research likely cars before you show up.

Do your research, decide on your maximum price for a car, and be prepared to walk. The last car we bought was from a dealer next door to a buffet restaurant we liked. When the dealer didn’t want to give us our price, we left and had dinner, ready to go home. Before we were done he called and caved. There are plenty of cars out there.