Are You Planning to Buy a Car?

When it is time either to buy your first car or to change the old one, giving it a big ticket item treatment is essential, simply because it involves a long term repayment plan. There are definitely scams out there to look out for, especially since many people have started buying cars over the Internet. There are many such fraudulent deals that are posted online that reveal the caveat of buying car online, because as there are honest car sellers, there are also those who are being benefited by criminal activities.

The amount involved had been high because it is always easier to deceive those that have money. Some of the known approaches to such scams are sellers would offer to sell known brand cars for the fraction of what they cost claiming various reasons, the popular one being a job transfer to another country. The arrangement would mostly be the car seller would ship the car after receiving payment through either a bank account or a fraudulent escrow company.

Using escrow companies does not protect buyers since most of them are the byproduct of scams that will disappear after duping one unfortunate buyer and will surface with a different name. Nonetheless, using well-known escrow companies will make a big difference. Banks cannot do much as withdrawing the money is possible the minute the deposit goes into an account.

Consequently, what the experts recommend is whether the car-buying process is going to be conducted over the Internet or a private arrangement is made with an owner, buyers will have to be careful and should not pay money before checking if the deal is genuine or not and if the sellers of the cars really own them. Such problems are worse when buying cars over the Internet, because it is possible to view a detailed picture of the car and once satisfied, since such deals are always made attractive with a hefty discount offering, buyers could be tempted to close the deal quickly since they are aware that anyone could close the deal. Since the sellers are also aware of buyers' anxiety they always ask for an advance, and paying that advance is the first mistake buyers make, according to what they posted online.

One seller had the whole deal copied from the owner that is selling the particular car on eBay, and the unknowing buyer who had his car stolen had to fork out the whole amount he received from an insurance company because he thought he found a similar car to what he lost at a discount. However, the whole deal was a fraud and the individual lost close to $16,000. The car he was planning to buy was an SUV. He is doing everything he can to get his money back, but he knows he had lost the money, because the money is not in the account.

This would indicate that the safest place to buy a car is from dealers, yet that does not mean the dealers themselves are passive individuals who will leave the customers alone to make their own choice and decision, without applying pressure or rushing them to close a deal. Dealers are known to be very pushy and one of the tricks they use is, when they see prospects are interested in a particular car they will make them pay an advance, and the experts say this is an erroneous step to take even while dealing with live dealers that could easily be hold accountable for their actions.

The first thing to do to avoid such pitfalls is to take advantage of what is offered on the Internet and there are sites that are highly recommended that will help buyers compare prices and learn more about the cars that they are interested in buying before visiting dealers. These sites are edmunds.com, invoicedealers.com, carworks.com, cardirect.com, car.com, cars.com, and more. They have enough information to educate a new or used car buyer, before approaching dealers who would not hesitate to manipulate buyers simply because their job is to sell cars by abiding to the rule, as much as possible. The reality out there for the most part is, aspects such as what will be the best financial arrangement for the buyers does not concern them much.

Lining up another loan in advance before approaching dealers might save money. If what is involved is buying a new car there is nothing that beats the 0% financial arrangement that cannot be found anywhere else except with dealers. Then once a particular used car is spotted, all that is recommended to do is to write the VIN number that is located under the windshield, leave the dealer saying that they will be in touch, and to do a research at carfax.com to check on the history of the car. Everything about a particular car that is on record is shown there and it is an easy way of avoiding buying what are known as lemons in the industry; cars that had accidents and had been repaired. Such cars, no matter what kind of good repair work done on them, would develop problems quickly, and should not cost the same as cars that did not have any accident.

On the second visit to the dealer, the first thing to do is to test-drive the car whether it is a new or a used car and once satisfied with its performance if it is a used car, it is recommended that a mechanic will have to look at it to get a second opinion even if it is already certified. One of the dreads is avoiding buying flooded cars. Once that stage is surpassed for both types of cars, there is an option of leasing or buying the car, either by paying cash outright or by an installment loan that could also be arranged through the dealers, because dealers have the backup of a financial institution. Finally, before taking full ownership of the car, buyers are advised to check what will cost them to have the car insured, because knowing one's budget in advance is crucial as any unforeseen expense could tip a budget.

Another problem is what to do with the old car that every dealer is willing to trade in, but the question is if the offer would be equivalent to what could be fetched if the car is put on a lisiting. For most buyers that is a hassle to avoid at the expense of losing a few hundred dollars, because things could go wrong and incurring more loss is possible. What to look at is, once the listing price of the particular car is obtained from the various sites online, the Blue Book could come handy here, dealers make from $300-$3000 profit depending on the amount involved, and if that figure is not out of range, the signal is buyers are not ripped off for the most part.

Nevertheless, knowing these facts helps a lot and one additional thing to avoid according to the experts is not to let the dealers set the price of the car, whether it is new or used one, and the same applies to the monthly installment, since it is buyers who know how much money they will be comfortable with, without feeling any financial strain. Because dealers make money on the leniency of buyers.

There are a few more things to know that will give well informed buyers the edge while barging the price and one of them is the existence of a "holdback", which is incentive money manufacturers pay to dealers to cover their interest expense on their floor plan loans and are paid out every 90 days. Since dealers sell their cars earlier, this money is a net profit that they should pass to the customers, although dealers do not pass them. Knowing the existence of this incentive helps when bargaining the price of the car.

Similar incentives worth knowing about are carry-over allowances paid at the end of the year for cars that are not sold, dealer incentives that amounts from $500-$6000 offered on stagnant inventory at the end of the year, and rebates and loan incentives such as the 0% interest on loans, where it is customary for dealers not to reveal their existence. It is possible to pass all these incentives to buyers to bring down the price, but dealers do not do it often unless they are pressured, and they could readily be used as a bargaining chip to bring down the price of a new car. Doing a simple research on the Internet will reveal which car companies are availing these incentives to their dealers.