Saving For the Average Person: Buying a Car Wisely

*I have included the addresses of any links. Sometimes the link feature does not work for me, so I want to make sure you can get to the sites that I provide.  

Just about everyone has bought or will need to buy a car at some point in their life. Most of the time it is something we dread and feel ripped off about. At least I have and everyone I have talked to about it. So I did some research and found some helpful tips for buying a car and not getting taken to the cleaners in the process.

Buying a used car:

Your first step to buying a used car is to find out what the approximate value of the car is. The easiest thing to do is to use the internet to figure out what type of used car you want before you set foot on a lot. This will save you a lot of hassle and wallet ache. So let's say you want a Honda Accord, you can go to Edmunds.com and put in Honda and your zip code. Then Accord and price range and year of the vehicle you are looking for if you want to narrow it down.

Big difference in mileage and price and car type. So you see the importance of research and knowledge.

Next I went to Kelley Blue Book    Kbb.org   and put in the info on that 2002 Accord. KBB said it was worth $13,600 with that mileage. If I was still interested in the car I would call the dealer and ask more questions as to the condition of the car and then take that into account on KBB.

As with any car purchase you should not only think about the price of the vehicle, but the cost of maintaining and gasing that vehicle. I found gas mileage reports on various Accords listed at 24-34 MPG. If you drive 10,000 miles per year ( most of us drive much more) than this is what you will pay in gas:

A typical Honda Accord has a 17 gallon gas tank. At $3.50 a gallon of gas that tank will cost you $60 bucks to fill and last anywhere from 408 to 578 miles. Costing an average of $1,020 for 10,000 miles of use.

Not bad considering a small Hummer will cost you $80 (23 gallons) to fill and gets an average of 16 miles to the gallon. Which means that same 10,000 miles in a Hummer will cost you $2,160. $1,140 more than the Accord! And I am willing the gas mileage on that Hummer is worse than reported.

Ok back to buying cars. New car buying is no different than used car buying. Research what you want and be aware of the price ranges for those cars before you get anywhere near a saleman.

Here is a good web site to read up on tricks of the trade: Carbuyingtips.com

Plus you will laugh at some of the threatening emails the creator of that site has received from dealers.

I highly recommend you shop for your own car loan. I have heard first hand from people that they were told they had poor credit at the dealer and ended up with a crazy interest rate. This happened to my friends several years ago. They had no clue what their credit score was and ended up paying 17 percent. Yes you heard correctly 17%. The dealer lied about their credit score. It was actually good enough to qualify for zero down and a low rate. When they figured out that they had been duped they tried to bring the car back only to find out once you sign the papers to buy a car you can not back out. There is no grace period like when you buy a house.

And since the dealer conveniently never actually showed them their score and they didn't ask the dealer walked away scott free. My friend's were able to refinance the vehicle later, but lost several hundred dollars in interest anyway.

So check your credit report once a year at minimum and always before a large purchase. ALWAYS!

Always look for reputable loans through companies that have been around a while. And do a Better Business Bureau    http://www.bbb.org/    check before signing anything.

If buying a car from a private individual make sure you have the car checked out by a mechanic first!

Last but not least, once you get your car maintaning it properly will save you cash.

Keep the tires inflated properly, get regular oil changes and keep that gas tank cover on tight!

Mandi Gordon: Money Correspondent

Mandi's column, Saving for the Average Person, published every Thursday to Gather Essentials: Money is the average persons guide to saving money on any average day.

Mandi lives in Northern Illinois with her husband Bill and daughter Beth. She enjoys saving money and sharing that knowledge with others. She knows there is enough confusing money info out there- it's time to start understanding and saving!

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