The Truth About Cars » buying a car http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sat, 26 Jul 2014 01:30:09 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » buying a car http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Question Of The Day: What Lame Duck New Car Is Worth Your Bills? http://www.thetruthaboutcars.com/2014/06/question-of-the-day-what-lame-duck-new-car-is-worth-your-bills/ http://www.thetruthaboutcars.com/2014/06/question-of-the-day-what-lame-duck-new-car-is-worth-your-bills/#comments Wed, 18 Jun 2014 10:30:11 +0000 http://www.thetruthaboutcars.com/?p=845569 mazda2

I always tell folks that they should try to hit em’ where they ain’t.

Want a Camry? Look at a Mazda 6 first.

A Prius C? One of my personal favorites.  But I still have a soft spot for far cheaper closeout models like the Mazda 2 and Ford Fiesta. You may also wind up enjoying them a lot more in the long run.

That final year of a model’s run can sometimes provide that unique, one-time steal of a deal that would put today’s popular car to shame. There is a unique value quotient that frequently can’t be replicated with the brand new stuff, once rebates and slacking consumer demand start chipping away at the true cost of purchase.

So speaking of new cars…

One of our frequent commenters, tryochatter, was recently in the market for a brand new vehicle. His first in about a decade or so.

His tastes are a bit Y2K oriented. He doesn’t care about navigation systems, infotainment modules, or any of the other premium offerings that help boost the MSRP of a given new car to a healthy 15% to 25% premium.

Like a lot of us, he’s a rare breed in today’s marketplace. Stickshift, basic Ipod integration, comfortable seating for two, with maybe four in a very tight pinch, and one other small thing.

Airbags. In his words, he wanted a car that had, “enough airbags to turn the whole mess into a volleyball if need be.”. These days, even a base entry level car like the Chevy Spark comes with 10 airbags. So this wasn’t a tough hill to climb.

The car he wanted was listed for $15,515. One day of negotiating, and waiting… and waiting… and he finally bought his next new car. A 2014 Mazda 2 for $13,000 before the usual tax and potential bogus fees were added on. In Ohio, this came to just below $14,000 after tax, tag and title.

He loves it.  The monthly payments are reasonable, and with a new job within biking distance from his home, he is probably not going to need another new car until the oldest of the Millenials start hitting their 40′s.

This isn’t a common happy ending for what many in our industry call, “the lame duck cars”. Popular cars get the spotlights, auto show turntables,  and dealer traffic. While those about to be axed or replaced will usually get the moonlight that is the back of the new car lot.

Are those lame duck cars the better buy? Well,  I’ll put it to you this way. My late father was incredible at getting these types of cars at a rock bottom price. The 1992 Lincoln Mark VII that had an MSRP of $33,000, he pretty much stole it at $22,000. The leftover 2001 Lexus ES300 that followed also got a nice, but more moderate discount.

He had a knack for buying great cars during their final year of production, and with the daily driving he did around the third world roads of northern New Jersey, he wanted a car that could handle that daily brutality.

If he had bought a 1993 Dodge Dynasty, or a four door 1993 Saab 900, chances are I wouldn’t be bragging about it, and he would have quickly changed his strategy.       

So this is the question I want you to consider. If you had to buy a new car that is in its final year of production, which one would you choose? Keep in mind you’re spending your own dollars here. Let’s assume that this is a car you plan on keeping for a long while.

Which one would you pick?

Have a question? An Insight? A lame duck, first generation Honda Insight? Please feel free to contact Steve at steve.lang@thetruthaboutcars.com 

 

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Hammer Time: Carfax, Red Flags, And Rolling Turds http://www.thetruthaboutcars.com/2013/05/hammer-time-carfax-red-flags-and-rolling-turds/ http://www.thetruthaboutcars.com/2013/05/hammer-time-carfax-red-flags-and-rolling-turds/#comments Fri, 03 May 2013 14:29:54 +0000 http://www.thetruthaboutcars.com/?p=487202 bustang_by_tr0llhammeren-d4xh09w-450x337

Steve,

You often write about the importance of evaluating a car’s history before purchasing it. We all have access to Carfax and Autocheck reports, but what are some things on those reports that trigger your red flag?

Here are five red flags that always give me a sense of caution whenever investigating the history of a vehicle.

1. Short ownership history

If I see that a vehicle has been most recently owned for less than 18 months, I give it a big fat negative.

This is in part due to the fact that I have only a limited time period to inspect vehicles at the dealer auctions I attend. At most auto auctions you will have between 100 to 5000 vehicles available on a given day. So you have to pare down your list of potential purchases, and refine it by developing a criteria that works.

Sometimes a short ownership period simply reflects an unwanted family hand me down. But the overwhelming majority of the time, these short-term keepers will be traded in with a chronic problem or three that will take $$$ to solve. I don’t want my money to sit in a repair shop. So I avoid the risk that comes with purchasing a vehicle that likely didn’t make the prior owner happy.

2. Too many years in a region where rust issues are predominant.

There is a wide swath of the USA, from the northern Midwest all the way up to Maine, that is particularly heinous when it comes to rust. Nobody in the South knows how to treat body rust and due to the related electrical issues, I try to avoid these models whenever possible.

3. Too many accidents

I can deal with one or two. However once you get to the four to six accident level, you are either dealing with an abusive driver or a neglectful owner. Sometimes both. I avoid those cars.

4. Several recent dealer visits for an expensive issue

A listing that shows ‘transmission inspected’, followed by ‘transmission fluid serviced’ in an older car will wind up creating a red flag as bright as the fluid. Engine issues, all-wheel-drive systems, and electrical issues will all raise a red flag of concern.

5. Too many registered liens

Here in the South, folks who are short of cash will pawn their vehicle. I can deal with one lien registered. But when I start seeing several of them over the course of years for a more expensive vehicle, I won’t bid on it unless I can confirm that the vehicle has been maintained reasonably well over that time.

Now here are five things I absolutely love to see on a Carfax or Autocheck history.

1. Dealer maintenance

I will pay anywhere from $800 to $2000 more for a vehicle that has been dealer maintained since day one. These cars are usually the most capable of holding the note, and the maintenance records you can give to your customers makes these vehicles an easy sale.

2. Location

Yes I do pay attention to where the vehicle has been registered over the years.

On average, a one owner car that has resided in an affluent area of town will be in better shape than one that has resided in an area infested with heavy traffic and crime. This isn’t an absolute, but a nice location usually offers a garage and a greater means to buy the maintenance services that the car needs.

3. Long-term ownership

A longer ownership period usually correlates to a vehicle in better overall mechanical condition; especially when it has been maintained at a dealership.

There are plenty of folks who will neglect maintenance and try to pass the buck to the next owner . When you have the fortune (and misfortune) to look at tens of thousands of vehicles a year, this variable tends to be pretty easy to figure out.

4. No liens

Cash purchases often times reflect an owner who has the means to take care of issues instead of an overwhelming need to try to ride them out.

5. Few to no accidents / moderate to minor damage

Substandard repairs can ruin a cars worth. If the vehicle has a severe accident history, I will only dig deeper if the vehicle represents something I would truly value for my lot. Conservative drivers tend to be conservative owners and, although Carfax and Autocheck offer extensive information, they don’t document everything.

If multiple accidents of moderate to severe damage have been recorded over the last few years, I will avoid that vehicle.

Finally let me offer you three surprises when it comes to Carfax and Autocheck histories.

1) A salvage history is not always a bad thing.

I use a seven year cutoff. If a car has been totaled within the first seven years of its life, I will usually drop it from my list of cars to buy.

However a lot of vehicles that have experienced minor damage will often be totaled out and then resold to a dealer at a salvage auction. I have purchased several older vehicles that were totaled without any form of frame damage or airbag deployment. The cost of repair was so high for body parts and minor components that the car was simply not worth fixing. Even though it ran perfectly fine.

Orphan brands are particularly good salvage buys if, and only if, you know what you are doing when it comes to inspecting the vehicle.

2) ‘The North’ is not always a bad thing.

It pays to know your geography and the potential affluence contained within it. Many northern cars are as rust free as their southern counterparts thanks to an indoor garage and minimal exposure to inclement weather and chemicals. Again, these vehicles are good buys only if you know how to properly inspect and appraise a given vehicle.

3) Failed emissions mean nothing, unless it is recent and you live in an area that requires it.

If a vehicle failed emissions a few years ago, I don’t care. Emission issues are often due to the catalytic converter and related sensors living out their useful lives. These can be replaced at a reasonable cost most of the time.

Still, in some areas of the USA, a recent emission issue can be expensive and tricky to fix. If you happen to live in an emissions county or state, pay close attention to the most recent emission inspections.

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Question Of The Day: What Is The Lamest Reason Why Someone Decided Not To Buy Your Car? http://www.thetruthaboutcars.com/2013/04/question-of-the-day-what-is-the-lamest-reason-why-someone-decided-not-to-buy-your-car/ http://www.thetruthaboutcars.com/2013/04/question-of-the-day-what-is-the-lamest-reason-why-someone-decided-not-to-buy-your-car/#comments Mon, 22 Apr 2013 15:01:07 +0000 http://www.thetruthaboutcars.com/?p=485759 Click here to view the embedded video.

Sometimes Wikipedia cracks me up.

The Toyota Previa… “failed to steal any significant share from the Chrysler minivans due to its high price, odd Asian styling, poor fuel economy, terrible horn, and weak engines.”

Note to Toyota engineers. Work on that horn! The old ones apparently weren’t horny enough.

The retail car business seems to be a hotbed for irrational snobs and hot-headed lunatics. Not to mention those who don’t bother reading advertisements before wasting your time.

Case in point. Every time I sell an old gasser Mercedes, I always put the following headline in big bold letters.

“THIS CAR IS NOT A DIESEL. NOTE. THE ENGINE IS NOT A DIESEL. EL COCHE NO TIENE UN MOTOR DIESEL. COMPRENDE? GRACIAS!”

This will not stop someone who is under 25 from coming to my lot, showing me the ad on their rinky-dinky cell phone, and asking where is the diesel Benz.

Every… single… time…

The same is true for when I sell a Mustang or a Camaro.

“THIS IS NOT A V8 MUSTANG (OR CAMARO). IT IS THE V6 MODEL WITH 200 HORSEPOWER. IF IT WERE AN Z28/GT, I WOULD HAVE MENTIONED IT ALREADY IN THIS AD.”

In this case, the young cell phone surfer will either come with their friends, or their Dad.

“I thought this was a Z28/GT model?”, the father/friend will say while the reading challenged kid is busy texting his friends.

“Did you read the ad?”

“Well… um… son? Did you read the ad?”

These are just cases where basic reading comprehension skills are lacking. Lame yes. But when it comes to the car itself, I deal with three unique types of nutjobs that just make me want to walk away from a conversation mid-sentence and close my office door.

1) The Badge Whore

This is the guy or gal who calls you about a Pontiac Vibe or Geo Prizm and wants it to magically turn into a Toyota. They will test drive it. Like it. Tell you about their all too loved Toyota that apparently bit the big one, and then ask you…

“Do you have a Toyota Corolla/Matrix?”

“Yes, but they are a higher price.”

“Can you call me when you get one in with similar mileage for the same price.”

“I can’t. Those don’t exist. For the same price, it will usually have around 50,000 to 70,000 more miles. You do realize that this is the exact same vehicle mechanically.”

“Yeah… but I really want a Toyota.”

“Sigh…”

2) The Illusionist

This is the prospective car buyer who will bitch about issues that don’t actually exist. Or will ask you to lower the price due to maintenance it may ‘potentially’ need 20,000 miles down the road.

C: “Do you hear that?”

Me: “Hear what?”

C: “That roar.”

Me: “Those would be the tires.”

C: “What about those little spiky things on the side of them?”

Me: “Those would be new tires.”

C: “And why doesn’t this car have a CD player?”

Me: “Because it’s a 15 year old economy car. They didn’t come with CD players?”

C: “Why does the antenna stay up?”

Me: “Because it’s a fixed antenna.”

C: “I don’t like old cars. This is an old car. Has it recently been given a service?”

Me: “The odometer is at 160k. The oil was changed and it has new tires. The major service isn’t due until 180k.”

C: “That will cost money.”

Me: “So does a bus pass.”

Finally, you have the car buyer who is more lame than Kwame Kilpatrick, Rod Blagojevich, and the 1962 Mets.

3) The Chronic Lawballer

This is the guy who, if you offered a perfectly good car for $1000, would counter with an $800 offer, an extended warranty, and a free toaster.

Yes, the following scenario really did happen to me.

Customer: “You know a lot about SAABs?”

Me: “Sure. I’ve had a couple dozen. (Keeping the SAAB-istic and SAAB-ist puns to myself.)

C: “You know they are unreliable.”

Me: “You realize this car has been on the road for 20 years.”

C: “Well, I’ve had SAABs for a long time. Decades. I never pay more than $500 for them.”

Me: “You realize I can crush this vehicle and get more than $500 out of it today.”

C: “That doesn’t matter. Kelly Blue Book says it’s worth $500 and that’s what I’m going to pay.”

Me: “I can’t help you. That’s not realistic.”

C: “Okay then. What about $600, a 7 day warranty, and you give me your toaster?”

Me: “What?”

C: “I need a toaster. Mine broke. I also saw a toaster in your office. I’m also looking for a TV but you didn’t have one of those.”

Me: “The car is $1200″

C: (looks at me startled) “You said a thousand?”

Me: “Yes, but I always charge more for aggravation.”

C: “No, I want to buy the car and toaster for $600.”

Me: “$1300 then.”

C: “You’re ripping me off.”

Me: “What?”

C: “You’re ripping me off!”

Me: “No toaster then. $1350.”

We ended up arguing for nearly 20 minutes and… I sold the car and toaster for $1200. The guy then called me up a few days later and asked if I could send him $200 since the alternator needed to be replaced.

I replied, “Do you still have my toaster?”

He pawned it. I kept my money. So what are the lamest excuses you have ever heard from a car buyer?

 

 

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Auction Day: Seconds! http://www.thetruthaboutcars.com/2013/03/auction-day-seconds/ http://www.thetruthaboutcars.com/2013/03/auction-day-seconds/#comments Mon, 11 Mar 2013 19:36:42 +0000 http://www.thetruthaboutcars.com/?p=480779

There comes a time when the prices for used cars at the auto auctions go the way of an exuberant bubble.

A small army of consumers get their tax refunds. The car lots wake up from their winter slumber, and values for vehicles go the netheregions of the human imagination.

I sell cars during this time, not buy them. In the last three months of every year I will usually buy a lot to avoid the tax time market prices. Sometimes as many as 12 vehicles in a day. But when tax season comes, I buy a chosen few and sell them by the dozen.

Then, after the buying frenzy begins to ever slowly ebb, there will be a welcome break in those hedonistic valuations. Where instead of winding up $1000 to $1500 behind the selling price, I wind up second to another bidder. Almost always to a guy who has been buying cars for a long time. Today was that day.

My first second was this 1991 Acura Integra. Now a lot of you folks will quickly realize that this vehicle is old enough to buy itself a drink, and you would be right. But age in a rust free climate that offers smooth roads is not that big of a deal.

The exterior? $260 paint job. The interior was presentable. A/C was fine. However the clutch was not shifting right, the big fartcan back muffler was a bit of a negative ding, and the hatch area had barely no semblance of the ultra-thin Acura fabric. The odometer showed 164k miles… which was probably inaccurate. I only bid up to $700 and watched a wholesaler outbid me at $750.

These sell quite well once they’re cleaned up. But I’m sure this one would have needed to be shucked to a paint shop, a mechanic shop, and an upholstery shop between the auction and the retail lot. Such time issues have a big hidden cost in our business and if you find another nasty surprise in that process, you can wind up ‘polishing a turd’. So this one simply went down the pipe.

Then we have the most heavily depreciate midsized car of the modern day. A Mitsubishi Galant. This 2009 model had 123,791 miles, and although the trunklid mentioned an ES trim level, apparently an ES in the rental happy Galant world only means alloy wheels as an option.

These lower trim vehicles usually sit at my lot for a bit. Cloth interiors. More than 120k… but an 09 model. I stopped bidding at $4900 for the sole reason that I usually can’t get the same margins with a higher cost vehicle with lower feature content. The final bid was $5000, and given that I already have several Tauruses and 3.5 Liter Intrepids that fit this bill at a far lower acquisiton cost, I can’t say I regret this decision.

Now this one was a gritting of the teeth moment. A 2007 GMC Canyon Work Truck with 111k and nothing too special about it. Except for the automatic. Late model, compact, automatic pickups are insanely easy to finance and this one had the added benefit of some paint transfer on the fenders that a less experienced buyer would falsely see as a permanent issue.

I bid up to $4500, and a friend of mine who buys up trucks was standing near me and bid $4600. I had to invoke King’s Rule and give him the favor of bowing out. In exchange for him looking out for me during the next go around. Hopefully that happens and I don’t wind up in a dogfight.

Finally we had the transportation equivalent of dog food go through the block. A 1999 Saturn SL. Based out. 5-speed. Perfect 35+ highway miles per gallon transportation for those folks who subscribe to the common practices of penny pinching and personal parsimony. I always have several of these on the road. Although the 5-speed is often a more challenging sale here in the Atlanta ex-urbs.

I showed a fist and held the bid at $1000. Waited for a few seconds. Then. Damn! Someone jumped in and I bid it up two more times before letting it go to some other nearby shadow for $1500. Typically I try to keep my costs under $2000 for a stickshift equipped basic vehicle, and this one would have likely cut it close once you added the buyers fee and the need for new rubber all the way around.

There was a ton of other stuff today. Fewer buyers came to the sale. But those who did show up bid all the money in the world. So if you’re in the market for a 1999 Lexus LS400 in clean condition and only 117k miles, you are looking at nearly $8000. Wholesale. If that sounds insane to you, just think about the financing terms that will be applied towards that vehicle. I’m seeing $1500 down. $80 a week for at least 36 months. Maybe even 48 months.

 

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