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Buying Your First Car

America is a huge country. From one coast to the other is about 4000 miles, or over 6400 km. It takes about 5 days driving through from one coast to another. Thus the distances are different than in Europe, or most of the other countries. This is why probably one of the first investments you will ever have is buying a car. In the US a car is not a luxury, but a real necessity.

Compared to other states, owning a car in the US it won't cost you a fortune. You don't have to spend years and years to save enough money in order to buy a car. You can buy cars for as low as a few hundred dollars, money you can make with a week of work.

Keeping a car is not necessarily costly as well. Car repairs can be expensive, but by making your homework and choosing the right car can save you lots of money and nerves on the long run. Maintenance costs are usually quite low as well. Gasoline prices have risen in the last years, but compared to Europe or many other countries, the US gasoline prices are half of other countries or lower.

In this chapter I would like to share some of my first hand experiences on car buying, plus some useful resources which can assist you in buying your (first) car. And because most of the people who are new in America have a limited budget (just like I had myself at the time of buying my first car), in this chapter I will focus more on how to buy a used or pre-owned car with a limited budget in mind, rather than buying a new one or an expensive one with fancy extras. But the principles presented here can help you to select and buy any type of car, new or old, more expensive or less expensive one.

The main ways to buy used cars are:
- from private sellers (through newspaper ads, internet)
- from a dealership (from a dealership, internet)
- in an auction (auctions advertised on newspaper, radio or other ads)

The buying process

The process of buying any kind of car car breaks into three parts:

1. Research
2. Shopping around
3. Buying

1. Researching the market

This step is about planning. You even don't have to leave your home. Follow these steps to complete the research phase of a used car buying:


Decide your budget, how much money you want to spend on a used car. Be aware, that you might need to allocate some money on repairs, fix-ups, and about $50 - $100 for the registration process.


Decide what options are you looking for on your car and rank them by importance. There is an excellent Decision Guide which walks you through this important step and at the end will give you the type, the year and the market price of those cars, which fit your selection criteria. You find this Decision Guide at http://carguides.autotrader.com/at/ucars/ucar_guide.jsp


Check the reliability ratings: now that you have some brands and models, it's a good idea to see how reliable those models are, what their strength and weaknesses are. You want a reliable car, and want to avoid models with problems. You can check reliabilty ratings here at Carpoint.


Check the consumer reports: regardless on what manufacturers say about how great their car is, it's a good idea to take a look at the consumer reports. Consumer reports are real feedbacks from actual car users. It can give you valuable information not only what people like about a certain car, but most importantly what they don't like. You can check this at: http://www.epinions.com/auto

2. Shopping for a car

The shopping phase is comprised of these steps:

1. Start searching for cars which fits your selection and price range. There are several ways to do this:


Online classifieds: if you have internet access, the easiest and fastest way is the web. There are dedicated auto buying-selling sites, which literally list millions of listings all accross America. You can search in your area using your ZIP code, you can specify the make, model, price range and the distance in miles within which you want the results. Then clicking on the results you can browse the individual results and find out technical details and the sellers contact information. Almost every big auto site like
has a car listings section.


Friends, neighbors, relatives


Newspaper ads

2. Call the seller. You can get a lot of information over the phone that will be valuable to your search. Also, you can easily eliminate cars that have problems such as excessive mileage or a salvage title (this means the car has been declared a "total loss" by an insurance company, usually because of a serious accident). Create and use a form when calling. Get as many information as you can.

3. Set an appointment to see the car: if you are satisfied with the results of the questioning, set an appointment to see the car in person.

4. Determine the true market value of the vehicle: before you go to inspect a vehicle it is a good idea to know the market value of the vehicle. This can help you in the negotiations to get a fair price for your car. The authority in used and new cars pricing in America is a book called Kelley's Blue Book. It gives prices information for all the models for the last 15 years. It is updated twice a year to reflect the most recent changes. If you are in the process of buying a car I strongly recommend you to buy it. You can find Kelly's online and you can get instant price estimates over the internet. You can search for price estimates online for specific models, makes and get the prices instantly.

5. Run a Carfax title check: before seeing the car in person check the car's history by running a Carfax title check. Carfax is the biggest company in the US and Canada who performes searches on a car's history. Carfax Vehicle History Reports reveal you important background information and hidden problems in a vehicle's past that may affect its safety and resale value.

Carfax can protect you to become victim of buying a lemon. A "lemon" is defined as a new motor vehicle which has a defect or condition which cannot be repaired after reasonable attempts. It's a problem car. A vehicle is presumed to be a lemon if (1) the vehicle has been sent to the dealer four or more times for repair of the same problem, or (2) you have been without the use of the vehicle for 40 or more days total.

Carfax also can identify other key problems in cars, like flooded cars, totalled and rebuilt after an accident, stolen cars, odometer roll-back cars etc.

6. Inspect the car carefully. If you are not very familiar with the car, it's various functions, then take a more knowledgeable friend or a mechanic with you to help you with the evaluation. It is not recommended anyhow to go alone at a car inspection. Psychologically you have a better chance to get a better deal if you are two persons at the negitiations than when you are alone.

Be sure never make an inspection in the night, or just before getting dark. You need plenty of ligth to evaluate and examine a car properly.

7. Test-drive the car. It is wise to make the test drive last longer than 15 minutes, so that the car is thoroughly heated up. In fact, stretch out the test drive for as long as possible. Check the car's behaviour on the freeway at high speed. Look at its stability. Test the brakes. Try to go uphill and see how the engine behaves. Does it speed up easily or looks pretty tired, worn out? Drive on a bumpy road at low speed and listen for different noises.

8. Ask a mechanic: if the car checks out well up to this point, and it seems to meet your needs, consider taking the car to a mechanic to have it inspected more thoroughly. This will cost anywhere from $25 to $150, depending on the car, but it is a worthwhile investment. If you are buying from a dealership don't make this inspection with the dealer's mechanic, because they are not unbiased.

9. Emission test: It is very recommended to run an emission test (or smog inspection test) before buying the car. Most states in the USA have adopted emissions laws. If the car can't pass the emissions test, it cannot be licensed, and you cannot use it for transportation. Certified testing centers usually charge no more than $50 for the test, and it could end up saving you hundreds of dollars in repair bills.


Don't buy the first car you inspect: it is not a good idea to buy the first car you inspect. Inspect at least 10 cars before considering buying. It will widen your options and you will form a better idea of the cars on the market. You will learn to distinguish good deals from bad deals.

3. Buying the car

The buying phase is usually made up of the following steps:

1. Set a figure in your own mind: before you discuss price with the owner or begin negotiations, know exactly how much you would like to pay for the car.

2. Make your opening offer: if your opening offer is based on the fact that you found mechanical problems with the car, state the problems first, then make your offer. Your offer should be high enough to be attractive to the owner but leave room for you to come up and still get a good deal.

3. Be prepared for a counter offer: in dealing with private parties, this process will usually be a simple two- or three-step process. If you are negotiating with a dealer, this will take longer and involve a lot of back-and-forth. If you made your homework, and determined the true market value of the vehicle you can have a better idea on how much the real value of the car is. Thus your counter offer can be more factful.

You can check a vehicle's true market value at Edmunds.

4. Get the deal in writing: once you reach an agreement on the price, get it in writing. Get a sheet of paper and make a hand written or computer typed contract, specifying the year, make and model of the car, VIN#, agreed selling price, date it and sign it by both the buyer and the seller. Make this in two copies and both of you have a copy.

Or you can download or print out a bill of sale from http://www.carbuyingtips.com/billofsale.xls

Buying form a Dealer

The guide in this chapter has the emphasis on how to buy a used car from a private party, or private seller. This is how most newcomers in America buy their first car. I won't go into too much details of buying a car from a dealer, because there is an awesome tutorial on the internet, which covers all the aspects of buying a car, new or old from a dealer. You will find it here.

If you or any of your friends ever have to buy a new or used car from a dealer, read that guide first. It's a must have and the best of all it's free. It's not the usual nice social talk about buying a car, but instead presents the real, tough, money-hungry dealer practices, scams, rips-off and how to be prepared so you have at least a chance to beat the guys in their own game. I strongly recommend you this guide at the above link BEFORE you go to see any car dealer. It can save you a few thousand of dollars by teaching you about:


how to get a car loan, if you need one, scams on loans, how to evaluate it


what to bring to a dealership, what to say, how to act, what not to do, what to look for at the dealership, and a glossary of all dealer fees


how to find out the dealer's cost, how to read dealer invoices, how much to offer


how to negotiate, dealing with aggressive salespeople, dealer scams & tricks to watch out for


how to close the deal fast, scams in the business office


how to avoid needless extras and options dealers want to sell you, what's their real cost, extended warranty scams


what to do when you've been ripped off, customer satisfaction surveys


and lots and lots of more


I hope this was helpful. Based on my personal experience I recommend you to focus on Japanese cars. Honda, Toyota, Nissan etc. These are the most reliable cars, far more reliable than most of the US models. Just check the reliabilty ratings and you will see what I'm talking about.


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