Consumer Reports Auto-Buying Experts Help Shoppers Get the Best Deal With 2 Key Checklists: 10 Common Traps to Avoid and 12 Smart-Shopping Tricks.Business Editors/Automotive Writers NEW YORK--(BUSINESS WIRE)--March 10, 2003 You want a great car at a great price. The dealer wants to make as much profit as he can. Consumer Reports' annual April auto issue helps you resist the dealer ploys that squeeze you for more cash than you should pay. Here are 10 common traps to avoid. (1) The False Credit Score - The dealer checks your credit report but lies about your score, telling you it is lower than it really is and saying you don't qualify for the low-interest car loan that drew you to the dealership in the first place. You'll have to pay a higher rate. This practice is illegal. Consumer Reports recommends you know your credit score before you shop for a car loan. If the dealer says your credit score is lower than you know it is, buy your car elsewhere and report the dealer to your state attorney general. (2) 0 Down, 0 Interest, 0 Payments for One Year - But when the year is up, you owe all the monthly payments you've delayed--sometimes plus retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a interest. You end up owing much more than the sticker price sticker price n. The list price for an automobile or other motor vehicle. on a vehicle that is now a used car. In some cases, the contract states that the buyer owes the dealer X number of monthly payments at a high interest rate, then must refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. the balance of the loan. Don't fall for this gimmick. A "0-0-0" deal costs more in the long run than a conventional loan. Also, remember to check the contract fully. (3) "We'll Pay Off Your Loan!" - Ads suggest that the dealer will assume your old-car debt or lease to get your business. But whatever you owe on your old vehicle is rolled into your new loan. Consumer Reports' advice? Stick with your current lease to avoid early-termination fees, and don't trade in a car if you still owe more than the car is worth. (4) "Pay More or We'll Say You Stole the Car." - The salesperson says you can drive home today in your new dream car. And you also qualify for a better rate than you expected--if you finance your purchase with the dealership. You sign the papers and away you go, but a week later the salesperson calls and says you didn't qualify for a low rate after all; you now have to pay more for the loan, or the salesperson may threaten to report the car as stolen. If you want to cancel the deal, he may say you can't; the dealership has already sold your trade-in, and you signed a contract. CR says accept the dealer's financing offer only if it beats the best rate you find elsewhere. Before taking possession of the car, be sure to have in hand an approved financing agreement. (5) The Mandatory Credit Check - If you're paying cash, have other financing, or are just taking a test drive, car dealers may obtain a credit report only with your written consent. An excessive number of credit inquiries can lower your credit score and thus blemish blem·ish n. A small circumscribed alteration of the skin considered to be unesthetic but insignificant. blemish your credit. If you have already arranged financing elsewhere or plan to pay cash, tell salespeople sales·peo·ple pl.n. Persons who are employed to sell merchandise in a store or in a designated territory. you do not authorize them to run credit checks on you. Do not give them your Social Security number or your driver's license Noun 1. driver's license - a license authorizing the bearer to drive a motor vehicle driver's licence, driving licence, driving license license, permit, licence - a legal document giving official permission to do something , and before you sign any papers, insist that the credit-check authorization clause be stricken from the document. (6) The Mandatory Extended Warranty The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. - The finance manager says you must buy an extended warranty. The bank requires it, he says. In some states such a pitch is illegal, but it's hard to prove. Lenders typically don't require an extended warranty, and Consumer Reports does not recommend buying one unless the car is particularly trouble-prone. (7) "We Don't Take Checks from Online Banks or Credit Unions." - Dealers have the right to refuse a check from a source if it is stated in a written policy, but this often amounts to another ploy to try to get you to finance through the dealership. Point out to the finance manager that online banks and credit unions have been around for years, and they are in the business of writing loans. And most U.S. online banks are FDIC-insured; they don't bounce checks. If the dealership won't back down and accept the check, or won't offer you a better rate for financing, leave. (8) "What Can You Afford to Pay Per Month?" - The dealer stands to make more money this way because he can arrange the various elements of the deal so that you can get a relatively low monthly payment but end up paying more in the long run. CR recommends that you negotiate the vehicle price first as if you were paying cash using resources such as the Consumer Reports Wholesale Price. Calculate the monthly payments only after you agree on the sale price. (9) Dubious Fees - You think the deal is complete, but the bill of sale includes "protection package" fees and "dealer prep" charges that no one discussed with you. These additional charges usually include protection you don't need, including etching etching, the art of engraving with acid on metal; also the print taken from the metal plate so engraved. In hard-ground etching the plate, usually of copper or zinc, is given a thin coating or ground of acid-resistant resin. your Vehicle Identification Number (VIN VIN Vulvar intraepithelial neoplasm, see there ) on windows to deter thieves, rustproofing rustproofing n → traitement m antirouille rustproofing rust n → Rostschutz m rustproofing n → , and fabric protection. CR's advice is refuse to pay them; put a line through the items on the bill of sale. Vehicle bodies are already coated to protect against rust. Upholstery upholstery, general term for household fittings, hangings, curtains, cushions, and covers. It refers to stuffed, padded, and spring-cushioned furniture, such as chairs and sofas, or to the usually decorative materials and fabrics that cover them. is typically treated at the factory. Some states require dealers to offer VIN etching VIN etching is a countermeasure to motor vehicle theft. In its most common implementation, it involves the use of a stencil and glass etching paste to etch a vehicle's vehicle identification number (VIN) onto its windshield and windows. , but you can do it yourself with kits you can buy online for $25. (10) The Arbitration Clause - An increasing number of dealerships say you must agree to arbitrate any future problem you have with them that warrants legal action. Don't buy from a dealer who requires that you sign a mandatory arbitration Mandatory arbitration is a contract policy that prevents a conflict from receiving judicial attention. In a mandatory arbitration, liability for damages must be determined as a result of an arbitration process before a civil lawsuit can be filed in the court system. clause. You would effectively be giving away your right of redress should a serious problem arise. 12 SMART-SHOPPING TRICKS In our recent survey of new-car buyers, 38 percent of respondents said they did not negotiate, which is up from 30 percent 2 years ago. Many felt--or were told--that the dealer wouldn't haggle because of special pricing or financing on the vehicle. CR says don't hesitate to negotiate--even if there are special deals. For more information, visit ConsumerReports.org. (1) Get price information. The Consumer Reports New Car Price Service provides the CR Wholesale Price, which takes into account holdbacks and incentives dealers receive from manufacturers as well as up-to-date information on rebate and financing deals. (2) Don't show a salesperson that you are attached to one vehicle. There are usually several comparable competitors, say, the Honda Civic The Honda Civic is a compact car manufactured by Honda. It was introduced in July 1972 as a two-door coupe, followed by a three-door hatchback version that September. With the transverse engine placement of its 1169 cc engine and front-wheel drive, like the British Mini, the and the Toyota Corolla The Toyota Corolla is a compact car produced by the Japanese automaker Toyota, which has become very popular throughout the world since the nameplate was first introduced in 1966. In 1997, the Corolla became the bestselling car in the world, with over 30 million sold as of 2007. . To see which models compete within the same category, use our Vehicle Ratings and Finder in the April issue. (3) Decide what options you must have and which you can live without. A car in the dealer's inventory may lack some of the bells and whistles A slang English term for exceptional features in some product. In the computer field, it typically refers to functions in software that may be greatly appreciated by some users, even though they may not be necessary most of the time. you had in mind; but you could come pretty close to what you want and save hundreds of dollars in the process. Be wary of option packages that make you pay for equipment you don't really need. (4) Solicit quotes from dealers and Internet car-buying services. The more you know, the greater the likelihood you'll get a good deal. (5) Never bargain down Verb 1. bargain down - persuade the seller to accept a lower price; "She beat the merchant down $100" beat down chaffer, haggle, higgle, huckster - wrangle (over a price, terms of an agreement, etc.); "Let's not haggle over a few dollars" from the sticker price. Always bargain up from the Consumer Reports Wholesale Price. Or use the invoice price, making sure to subtract A relational DBMS operation that generates a third file from all the records in one file that are not in a second file. current holdbacks, dealer incentives, and rebates. (6) Don't respond if the salesperson asks what constitutes a "legitimate" profit. You wouldn't ask a salesperson to set your salary. Dealers sell cars every day. It's their job to determine a reasonable profit. (7) Be willing to walk. If you don't like the deal or if any of the details make you queasy QUEASY - An early system on the IBM 701. [Listed in CACM 2(5):16 (May 1959)]. , tell the salesperson you're taking your business elsewhere. If the dealer beseeches you to stay, explain frankly why you're unhappy with his or her offer. You may end up with a lower quote. (8) If you are too reticent to bargain, feel sorry for the car dealer, or are otherwise worried about your resolve, recruit a tough-minded friend or family member who can do the job for you. (9) If you've negotiated a good price and the dealer won't waive a modest "paperwork" or advertising surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. , ask for free servicing or complimentary floor mats to offset the fee. (10) Don't wait for your old clunker clunk·er n. Informal 1. A decrepit machine, especially an old car; a rattletrap. 2. A failure; a flop. to die before shopping for a replacement. If you need a car fast, you could end up overpaying. (11) Don't leave a deposit to lock in a price unless you're certain of the car you want. Doing otherwise can pressure you to act prematurely. (12) Insist that the sales contract Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. stipulate stip·u·late 1 v. stip·u·lat·ed, stip·u·lat·ing, stip·u·lates v.tr. 1. a. To lay down as a condition of an agreement; require by contract. b. that you can void the agreement if something goes wrong, for example, if the vehicle isn't delivered by a specific date. And make sure the manager or general manager of the dealership signs the contract. The salesperson's signature alone may not be legally binding. The 50th Anniversary April Auto Issue is on sale March 11 through June 11. The Auto Issue is generally available where magazines are sold and may also be ordered online at www.ConsumerReports.org. |
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