Car Buying 101 Tutorial
Car Buying 101 Part II
We should talk about expectations for a moment. We have seen advertisements that will place a $100 price tag above a picture of a late-model SUV, as if to suggest the vehicle is going to sell for that amount at auction. That is extremely unlikely. Now a newer SUV could sell for $100 at government auction if the side of the vehicle that is hidden from the camera view has been completely destroyed in a wreck. Wrecked vehicles are sold all the time and there may be a goldmine in some of those wrecks because the parts can be valuable. Of course that doesn’t help you if you thought you would be driving home a brand new car for $100.
Buying from a Private Party using classified ads like craigslist.com can also be a way to find a car at rock bottom prices. Sellers have different motivations and different levels of experience in selling cars. They might not know low Kelly Blue Book or they might be under financial strain. If they are motivated, you might be able to swoop in with cash and get the car for significantly below market value.
In either example, auction or private party ad, you have to factor maintenance issues into your pricing. Unfortunately, we have no hard and fast rule for doing this, other than to refer Kelly Blue Book for value, which factors in mileage and condition. Just remember that the vehicle will be your responsibility after purchase, and maintenance will then be your hassle.
We will cover these two methods of car purchase in more detail in our “Buying A Car At Government Auction” and “Buying A Car From A Private Party” sections.
The old saying that cash is king certainly applies to car buying. Of course having the pile of money to buy a late-model vehicle in one lump sum pushes the transaction toward the best deal side of the equation rather than the ease of making payments which would ultimately cost more, but would be more towards the hassle-free side.
In auctions, you will typically have to pay a substantial deposit on the day of winning the bid, and provide full payment within a set number of days thereafter. You will not be able to take possession of the vehicle until it has been paid in full. Some auctions require payment in full at the conclusion of the auction, so always read the terms of auction carefully before bidding.
Private parties typically do not accept anything other than cash or a cashier’s check for the total amount of the agreed upon price.
