Car Buying 101 Tutorial
Car Buying 101
Welcome to Car Buying 101, a handy guide of tips for buying a new or used vehicle. In this tutorial, we will discuss three primary methods of buying a car, which are 1, buying a vehicle through a dealer, 2, buying a vehicle via auction, government or otherwise, and 3, buying a vehicle from private party classifieds.
These are tips meant to increase your overall knowledge of the car market and to help you avoid some of the pitfalls associated with buying a car. This tutorial reflects the opinions of the PoliceAuctions.com staff, based on car industry experience, but we have no way to guarantee results using these tips, so do not substitute what you read here for your own judgment. It is our view that this information can only help you, and that a more informed buyer is more likely to make a purchase that is more beneficial to them than that of an uninformed buyer. Part of being informed buyer means doing due diligence and we will describe this more in detail as we go on.
Anyone looking to buy a used vehicle should purchase a Kelly Blue Book before shopping for the vehicle. This little book is available online for under $10 at Amazon.com and lists car values. The automotive industry follows these values closely. Sometimes there are other factors that they consider, but Kelly Blue Book is a widely regarded standard in the industry.
You can take a Kelly Blue Book with you, whether you attending a vehicle auction, going onto a car lot, or responding to a private party ad. It’s difficult for anyone to argue with the values stated in that book, although it’s almost a guarantee that Car Dealers will try.
If you want to buy a new car, you don’t need the Kelly Blue Book. In this case, the phone and the Internet become your best friend. You can use the Internet to research dealers, sale prices and rebates, then call around to see who will give you the best deal. One thing to watch out for is that car salesmen will often say anything you want to hear to get you onto the lot, so it’s best to plan to visit a number of lots on the same day so your time doesn’t get wasted.
Now is a good time to mention that we view car dealers as adversarial in your car-buying sojourn. We tend to say negative things about car dealers because we know that they have a profit motive behind everything they tell you, and there is no standard by which they operate that prevents them from wiggling on the truth to make extra profit.
Now having said that, we still recommend buying from dealers in many cases because in spite of the fact they are trying to make a profit from you, they are also regulated, and most of the time, can do the best job of supporting the sale in terms of vehicle maintenance and warranties.
Government Auctions or non-government auctions are also adversarial. They are there to make a profit, even if the Government puts on the auction. They want to get as much money for the vehicle as possible with the least amount of cost involved. In an effort to limit misrepresentation of items up for auction, it’s typical for almost no information to be provided on the vehicle, other than mileage, vehicle identification number VIN number and known defects. Vehicles sold at Government Auction are sold “as is where is,” so you get no post-sale support. If it falls apart the minute you take it home, it is entirely your headache.
There is a mechanical risk when buying a vehicle from private party too, only with a private party it’s more likely that there be some wiggling on the truth, typically in the form of omission. If there is an intermittent rattle in the transmission that only occurs after a couple of hours of driving, do you really think the private party seller is going to tell you about it?
So who should you buy from? The answer to this question really depends on what you are trying to accomplish. People often say they just want to take the “hassle” out of buying a car. This may be true, but the motivation to get a good deal seems to put the hassle back into the equation. If you think about it, it would be pretty easy to walk onto a car lot, ask them how much the car costs, then simply purchase it at that price and go home happy. So the ideas of “hassle-free” and “best deal” are in opposition to each other. This is true when buying either a new or used vehicle. So you need to decide what is more important to you.
If your primary motive is “hassle-free,” then we recommend buying a new car that has full manufacture warranty. We will cover this in detail in our “Buying A New Car From A Dealer” section.
If your primary motive is saving money, but you are concerned about possible maintenance issues, then we recommend buying from a dealer and making sure the vehicle comes with an extended warranty. We will cover this in detail in our “Buying A Used Car From A Dealer” section.
If you want to absolutely pay the least amount possible for the car, then you have two options, auction or private party. As long as the auction is being held with No Reserve, which means the top bid wins, even if it is $100, it doesn’t matter whether it is a government auction or not. As long as the top bid gets the car, then you at least have the opportunity to get it for below low Kelly Blue Book value.
