Though you may think that the tough negotiating is over at this point, there are still some hurdles ahead. In most cases, you're not finished with the sale until you pay a visit to the friendly "Finance and Insurance" office. The F&I person will open right up to you, saying something like, "Now that the negotiating is over, this is the easy part."
It is amazingly easy to slip additional charges and dealer add-ons past the unsuspecting car buyer at this juncture. Security systems, paint and protection packages, bogus fees, you name it. If it's extraneous and doesn't affect the monthly payment too much, the F&I salesperson will try to sell it. They're even there to sell you the money to pay for the car (that's what financing is all about). "I see you're putting $5,000 down? What lending institution are you using? We can better their rates."
If you have secured a good interest rate from your bank or credit union, it may be worth your while to see what kind of rate the dealership has to offer. If they can set up a better loan, make sure that the term is the same as the one you have already secured. Get everything in writing, and do the math yourself. In smaller dealerships or used-car lots, the salesperson may also be the financing person, but his objectives are still the same.
Now is the time to discuss warranties, if the subject hasn't yet come up. Find out if the car comes with a warranty and, if so, the warranty's terms. If the warranty isn't comprehensive, ask about purchasing a manufacturer's used-car warranty, but remember, like everything else, the warranty price is negotiable, too. Be aware that many used-car lots will sell warranties from smaller warranty companies. While many of these companies are reliable, be sure to research thoroughly any company you are considering buying a warranty from before you get to the dealership. To do this, check out companies' backgrounds via the Better Business Bureau and ask for references so that you can contact other consumers who have used the company for extended warranties in the past. You'll also need insurance just to drive the car off of the lot, and if you don't already have it, F&I will be sure to recommend an insurance company.
Finally, you'll need to sign various papers: the power of attorney that allows the dealership to go to the DMV and register the vehicle for you, the transfer of title if you're trading in a vehicle, etc. Each document should be carefully read for errors. Once your signature is on the paperwork, the deal is done; this is your last chance to back out of the deal. If something doesn't feel right, don't sign. And do not feel pressured or obligated to sign just because of the amount of time invested in the deal by the salesperson. This is your money we're talking about.
The dealer will now collect the down payment on the used car and the papers on the trade-in, if applicable. They'll give you copies of the paperwork, the title (if you've paid in full) and warranty information (if the used car comes with one or you've purchased one). If you are financing the vehicle, the title will be sent to the bank or credit union and the dealership will provide you with proof of ownership (i.e., temporary registration); within a few weeks, you should receive your official registration and tags. Now, you're on your way. That wasn't so hard, now, was it?
Adding it Up
Private sellers usually won't try to add extras on to the price of a used car. In fact, they will sometimes throw in extras that they won't need anymore, like bike racks, special equipment for that particular car, car covers, old magazines with articles about the car, service manuals, spare parts, phone numbers or Internet sites where people with similar cars can be found.
Dealers, on the other hand, will almost always try to add things like undercoating, handling charges, or even strange taxes that you have never heard of. Don't buy it! If you have already negotiated a price, ask them to explain exactly why the price has changed in the last few minutes. Once again, be ready to leave if you don't like their answers. At this point in the deal, salespeople often think they've got you hooked, and that the chances of you walking away from the deal are slim. Prove them wrong!
What you should not pay (because it is added dealer profit)
- administrative costs
- advertising fees
- delivery and handling (D&H)
- fabric coating (do your own with a five-dollar can of ScotchGuard)
- teflon coating
- rustproofing (It is unnecessary and can harm your car.)
- dealer-installed security system (The vehicle's wiring is often damaged when it is installed at the dealership.)
- pinstriping (the most costly tape in the world)
- addendum items such as Appearance or Protection Packages, (a.k.a., "Sunshine and Fresh Air")
Extended Warranties
Find out what sort of standard warranty is included with the vehicle or how much an extended warranty will cost. An implied warranty generally exists on all dealer vehicle sales for the first 30 days. What this means is that if the car blows up a week after the purchase, a reputable dealer will offer some sort of compensation--even if it wasn't purchased with any warranty coverage at all. Sometimes the dealer will fix the car for free, sometimes they will refund your money and sometimes they will offer a substitute vehicle of equal value. If the dealer refuses to do anything, and if you feel that the car wasn't mistreated or abused in any way prior to the mechanical failure, call the local Better Business Bureau as well as the state agency that oversees business licensing. They should be listed in the white pages under your local government. A call from a government agency can have an amazing effect on an otherwise stubborn dealer.
A dealer may offer you a warranty verbally, but it is to your advantage to insist that the dealer put his promises in writing. Also, make sure that you completely understand the warranty before you sign any papers. Warranties can differ dramatically from one dealership to the next, so be sure that you know:
- what is covered (parts, labor or both)
- how long the warranty is good (i.e., it could be 30 days for labor and 60 days for parts, 120 days for parts only, or any type of combination)
- what percentage of the work is covered (Is it a 50/50 warranty, where you pay half and the dealer pays half, etc?)
- if there are any exceptions (Are there certain repairs that will be excluded from warranty coverage?)
Manufacturer extended warranties can also be purchased; these allow you to use the warranty at any dealership service department--not just the one where you bought the car. One of our editors once purchased a used vehicle from a dealership in Santa Monica, Calif., then drove a few blocks to another dealership to purchase an extended manufacturer-authorized warranty. The dealership where he purchased the warranty did not ask where the car was bought, how many miles were on it, and did not perform an inspection. While some dealerships may not be as lax as this one, it is important to realize that you can shop around for warranty prices, just like you would for the best vehicle price. Incidentally, our editor ended up needing severe repair work done to his new used car, and with his $1,400 extended warranty investment and his $200 deductible, he received approximately $7,000 in parts and labor.
Not all used cars will need this much repair work, of course, but if you are interested in extending the warranty of your used car, be aware of all the options available. Not all manufacturers will sell extended warranties on used cars, however. BMW, for instance, will not warranty cars that have more than 50,000 miles on them or that are more than five years old. Be sure to check on each manufacturer's extended-warranty policy before choosing your next vehicle.
Extra Costs: what parts to replace or inspect immediately
- Oil. First and foremost, have the oil changed, just to begin a healthy new routine with your new car. Though it may appear to be clean, you never know what sort of odd additives the dealer or previous owner dumped in there. Drain it out and start over.
- Timing belt. If so equipped, the car's timing belt should be changed every 50,000 miles. (Most modern engines use rubber belts rather than noisy chains. The problem is that rubber tends to break down after time.) Unless you have a receipt stating exactly when the timing belt was last replaced, it's a good idea to put a new one in just to be on the safe side for another 50,000 miles. A good mechanic can replace the timing belts on most engines for less than $300. However, if the used car you just bought breaks a belt, the engine will probably need to be rebuilt at a cost of 10 times that amount.
- Tires. Check the tread wear on all four tires. If the wear appears to be uneven, or if the tread is worn, have the tires replaced. Tires are often the most expensive replacement part, but they can cause the most harm if left unattended: a blown tire often results in a loss of control while driving.
- Spark plugs and wires. Inexpensive, and a new set of plugs and wires can do wonders for performance.
- Air filter. Another inexpensive part that ensures that your engine is breathing properly. Air filters can usually be changed with a minimal amount of effort.
- Hoses. Make a visual inspection of all the wires and hoses in the engine compartment, checking for cracks or bulges near the connection points. If anything looks brittle or corroded, have it replaced immediately.
- Radiator fluid. Flush it and start over.
- Transmission fluid. An oft-neglected but highly important fluid in all cars. The transmission fluid should probably be replaced at least once every 20,000 miles. Transmissions are packed with metal gears that shave and grind each other all day long, and the fluid that lubricates them needs to be clean to minimize wear.
- Brake system. Have the brake fluid checked, as well as the thickness of the brake pads.
- Accelerator fluid. Yes, even the gas you put in your tank is important. Add some fuel treatment to your first few fill-ups, or use a higher octane, which includes more detergents to keep your fuel injectors clean. And if the car requires premium, use premium.
That's all for now. The first few weeks and months after buying a previously owned car, pay special attention to any drips or spots on the driveway. If anything seems to be leaking, have it checked out immediately. The car probably lasted this long due to careful maintenance, and it's up to you to keep everything healthy now.
