Buying Guide: Find used car steals, not stinkers

KINGMAN - As Mike Taflan advises his customers, if you're looking to buy a used car, unless you know the owner personally, take it to a professional to be checked out.

It may cost up to $200 for a thorough inspection, including an engine compression check, but it's better than coughing up thousands of dollars for a lemon that's going to require expensive repairs a few miles down the road.

"I'll tell you the truth. This is what it's going to take," said Taflan, 15-year owner of Taflan's Quality Automotive at 3030 E. Andy Devine Ave. "Some things might slip by me. I can't tell you the transmission life."

Buying a used car can turn into a fantastic deal or a chronic headache, depending on how much due diligence is done on the transaction.

It's a risky process for both the buyer and seller if proper steps are not taken.

Arizona's "Lemon" law has limited consumer protection regarding vehicle purchases made through a licensed dealer and almost no protection for vehicles bought from a private party.

Buyers can protect themselves by doing a little research before they buy a car, and the same goes for sellers.

The best investment you can make is getting a report from Carfax, said Mike Hill, owner of 66 Auto Sales in Kingman. All used cars on his lot come with the report. It tells you about ownership history, salvaged titles, accidents and mileage.

"So it's pretty hard to scam someone now with all the stuff out there on social media," Hill said.

Buyer beware

Be especially careful when buying a car from a private party. Fraud is rampant.

Unscrupulous sellers may try to unload a stolen vehicle or one with a rolled-back odometer. They may provide a forged or fraudulent title of ownership, or try to sell a vehicle with extensive rust or collision damage that can't be seen. It may have received a cosmetic fix instead of a complete repai r.

Another common scheme involves someone who buys a used car without a loan, so there's no financial lien on the title. The person then obtains a duplicate title on the vehicle and secures a title loan. The seller defaults on the loan, which could be thousands of dollars, and immediately sells the vehicle using the duplicate title that does not show the lien.

The buyer can't transfer title and register the vehicle until the lien is paid. The lien holder may repossess the vehicle, leaving the buyer out his car and money.

Buyers should take these precautions:

• Conduct the transaction in a safe location.

• Don't trust what the seller says. Confirm information on documents.

• Request valid photo identification to verify the seller is the legal owner shown on the current title.

• Read the title carefully and look for any alterations on both sides of the document.

• Look at the front of the title for any text identifying the vehi cle as salvage or nonrepairable.

• Check the odometer reading on the vehicle instrument cluster and compare it to what is listed on the back of the title from the seller and any odometer information contained in vehicle history reports or repair invoices.

• Confirm the vehicle identification number (VIN) on the dashboard and driver's door jamb sticker match, and compare that VIN to what is shown on the title.

• Complete the transaction at a financial institution.

A reputable seller should offer identification and valid ownership documents at the very beginning of the transaction process. The seller should be able to answer clearly any questions from the buyer. The seller is required to endorse and transfer the certificate of title at the time the vehicle is delivered to the buyer.

"Make sure the title is in the name of the seller, that it's not an open title with no reassignment from the previous owner," auto dealer Hill added.

Seller beware

Sellers are also vulnerable to various fraud schemes.

Scam buyers may pay with counterfeit money or write a check from an invalid or closed account. They may ask for a test drive without the owner in the vehicle and never return, or forcibly take the vehicle from the owner during a test drive.

Sellers shouldn't take any chances on payment, Hill said. Some sellers will take $500 down payment and finance the sale. That's also risky. Accept only a certified money order, cashier's check or cash, he said.

Tips for vehicle sellers:

• Conduct the transaction in a safe location.

• Confirm information on documents. Don't trust verbal statements.

• Be cautious of cash payments with possibly counterfeit money and bogus checking or credit card accounts. Exchange funds at a financial institution.

• Watch out for buyers who ask few questions, and appear anxious to hurry up and make a deal with no negotiations.

Buyers and sellers can v erify documents, VIN and title liens at www.servicearizona.com, the official Motor Vehicle Division website.

The VIN can also be used to obtain the vehicle history. A fee may be charged for this service, which may uncover salvage or nonrepairable status, maintenance problems, past collision involvement, insurance claims and any title issuance in other states.

Here's Why Used Car Loan Rates Are Higher

If you're considering buying a used car, you're not alone. Nearly 36 million certified preowned vehicles were sold in 2014, according to Edmunds.com. As you shop around for a car, however, you might encounter an unpleasant reality: Interest rates tend be higher for used cars. A higher interest rate can cost you over the life of your loan. Here are four reasons why used cars typically come with higher interest rates.

Related: 30 Biggest Dos and Don'ts When Buying a Car

4 Reasons Used Car Loan Rates are Higher 1. Used Car Values are Harder to Estimate.

While new cars lose value quickly, their depreciation is relatively straightforward. In contrast, a used car's value can be harder to calculate, as there is a greater chance the car has mechanical problems and unreported accidents, or other issues. For a lender who might need to repossess your car someday, not knowing your car's value can make for a risky investment.

Lenders also have to account for the fact that cars they repossess might be underwater. With a higher interest rate, your lender mitigates risk by profiting from the loan up front.

2. Manufacturers Incentivize New Car Purchases.

Many major auto manufacturers are in the business of financing new cars. While auto manufacturers' financing companies might offer discounts and other deals to boost new car sales, these companies typically do not finance or offer incentives for used cars.

Dealerships, meanwhile, can profit from new car sales through dealer holdbacks. A holdback is money a manufacturer pays a dealer for selling a new car. Holdbacks incentivize dealerships to focus on new car sales.

3. Used Car Borrowers Default More Often.

Used car buyers tend to have poor credit scores, according to Experian. Lenders make up for the inherent risk in lending to subprime borrowers by charging higher interest rates. By charging a higher rate, a lender can mitigate the cost of a defaulted loan.

4. Used Cars Require Prep Work for Resale.

When a dealership acquires a used car, they have to invest time and money into the vehicle to prepare it for resale. Whether the car needs a quick repair or minor maintenance, dealerships will try to recoup expenses with higher rates.

Should You Buy New or Used?

While rates for used cars tend to run higher, you might save more on the total cost of a used car. On average, a new car loses 11 percent of its value the moment you drive off the lot, according to Edmunds.com. As the car ages, it depreciates more slowly.

Used cars can be purchased for less, too. So while you might pay a higher rate on a used car, because your vehicle does not depreciate as quickly as a new car, you lose less money over time on your investment.

As you consider vehicles in San Jose, review maintenance records and ask about any previous accidents. If you are in touch with the previous owner of the vehicle, inquire about any problems they encountered. Finding a used car in good mechanical condition can help you save money, so take time to research.

How Much Do You Need To Save a Month to Buy a Second-Hand Car in Singapore

© Provided by MoneySmart used-car-save-header There are days I wonder why so many Singaporeans still insist on owning a car despite the ridiculous cost involved in purchasing one. Naturally, on those very same days, I become late for work due to our world-class public transportation system . But is avoiding being late for work every once in a while worth the cost of buying a car? Even a second-hand car? Let’s do the math. For illustration purposes, let’s just focus on a 5-year-old Toyota Corolla Altis 1.6A. It’s the most popular car model in Singapore, mainly because it’s built to last and ridiculously fuel efficient. You can expect to pay at least $70,000 for one that doesn’t look like it belongs in the latest Mad Max film.In order to ensure the lowest downpayment, you want to be able to qualify for the maximum loan in terms of largest amount and longest tenure. That means your car’s Applicable Open Market Value (OMV) needs to be $20,000 or less (in order to qualify for a loan of 60% of the car price). The older the vehicle, the lower the Applicable OMV probably is, but it’s always a good idea to check.  Income requirement for the loan To qualify for a car loan, your monthly instalment should not exceed 1/3 your monthly salary. To get the maximum loan possible of 60% of the car price, you should go for the maximum tenure of 5 years. (Do note that the maximum tenure is dependent on the number of months left on the COE, capped at 5 years.)Assuming the car price is $70,000, the maximum loan you can get is $42,000. As an illustration, let's assume the car loan interest is 2.8%. Over 5 years, that means a monthly instalment rate of $798. Therefore, to qualify for the loan, you need a minimum monthly income of at least $2394.If you’re earning that much, don’t rejoice yet. There’s a lot more to worry about than just paying $798 each month. Monthly expenditure: $798 Downpayment The minimum downpayment of a car depends on the difference between the car’s price and the loan amount mentioned above. Assuming your Applicable OMV is $20,000 or less, your loan amount is 60% of the car price. That means your downpayment is 40% of the car price. You also have to pay an LTA transfer fee of $11.Using the same example above, the car price is $70,000, so your downpayment is $28,000. The LTA transfer fee is $11. Since you have to pay your 1st month instalment at the same time with your initial payment, that’s a total of $28,809 you have to come up with as soon as you sign on the dotted line. So make sure you have that amount liquid and ready.What? That’s excluding insurance? Now you tell me. Amount to be paid upfront: $28,809  Insurance According to Singapore law, car insurance with 3rd party coverage is mandatory. When it comes to using a car loan to purchase a car, the financial institution you borrow from may have stricter requirements for car insurance coverage. For example, they may demand 3rd party, fire and theft car insurance, or even comprehensive policies.How much will this insurance cost you? Well that depends you on you, really. There are several factors that determine how much you pay per year. The main factor? Whether you’ve managed to find the best car insurance for yourself. Use a comparison site to make sure you’re not paying more than you have to. Still, expect your insurance to come up to about $1,200… at least. This amount has to be paid upfront and in full, and your insurer will issue you a cover note.Make sure the insurance policy is already in force when you purchase the vehicle and covers the full period of the vehicle’s road tax. Amount to be paid upfront: $1,200  Road tax Speaking of road tax, make sure to check if your vehicle requires inspection prior to the renewal of your road tax. For cars that are older than 3 years, it is compulsory to have annual car inspections. Sometimes, the second hand car comes with a few months of road tax still valid. But you’re still going to have to pay it sooner or later. For the Toyota Corolla Altis mentioned earlier, since it’s a 5-year-old 1598cc car, the road tax should be $742 for a 12-month renewal.(It's important to note that , as announced at this year's Budget, there will be a one-year road tax rebate for petrol vehicles from 1 August 2015 to 31 July 2016. The rebate for petrol and petrol-hybrid cars is 20%. Any excess road tax paid will automatically be offset at the next renewal.)There, that’s all you need to worry about, right? Well, yes, assuming you’re planning to bring your new ride home and spend the rest of its short life caring for it in your carpark. What? You actually expect to drive it around? Then be prepared to spend more money. Amount to be paid upfront: $742 Maintenance fund When buying a second hand car, always check the mileage and how well the previous owner(s?!) maintained it. It’s probably a good idea to check the car’s maintenance log (and panic if there isn’t one!) and get a mechanic to look it over before handing over cash.Depending on how many miles are already on the second hand car, you can probably expect to be replacing some parts. And even if you don't have to replace any parts, you still the need to change the oil, check tyres, flush the air-con and top up brake fluid on a yearly basis.Say your second hand car is, miraculously, in the best of conditions. You should still expect your maintenance and servicing costs to set you back by, on average, at least $360 a year. And yes, I bet some of you are laughing at that amount, because you know no second hand car is only going to cost you that little each year. Monthly expenditure: $30  Petrol Whether a new or second hand car, it’s going to need petrol. Even if you’re not paying top dollar for Shell V-Power , your petrol bill’s still going to come to about $200 a month. Okay, fine, if you use the best credit card for petrol you might be able to knock that down to about $180 a month. Monthly expenditure: $180  So, what’s the total damage when buying a second hand car? You’ve seen the numbers, let’s do the math. First we find out how much we need to save each month even before we can think of buying a second hand car. Are you ready for this? Amount you have to pay upfront when buying a second hand car: Purpose Amount Downpayment $28,809 Insurance $1,200 Road Tax $742 TOTAL $30,751 What if you don’t already have $30,751  in cash? That means you will need to start saving $2,562.58 a month for a year. Oh, wait, you don't even take home that much salary a month. Okay, how about we say  $1,025.03  each month for the next 2.5 years before you can think of affording a second hand car (at today’s prices). Total monthly expenditure after buying a car: Purpose Amount Car loan instalment $798 Maintenance Fund $30 Petrol $180 TOTAL $1008  So, now that you’ve managed to save $1,025.03 a month for 2.5 years, you should have no problem paying at least  $1008  each month for the next 5 years till your second hand car is fully paid off. And scrapped. Just imagine – you need to set aside more than $1,000 each month for 7.5 years just for the convenience of a second hand car that you’ll use for only 5 years.Only in Singapore. Are you surprised by this number? Do you think there are ways to further reduce the costs of owning a second hand car? Share them with us! The post How Much Do You Need To Save a Month to Buy a Second-Hand Car in Singapore appeared first on the MoneySmart blog

Used car buying and selling

Home » Featured, Gadgets, News, PC/Mac, The Web Tech tools for used car buying and selling Submitted by Gadjo Sevilla on June 4, 2015 – 12:59 pmNo Comment By Gadjo Cardenas Sevilla It has never been easier to buy or sell a used car. Various websites, services and apps make it possible to find the right buyer and seller for a vehicle. Buying or selling a used car doesn’t have to be scary. There are now various ways to do both from the comfort of your own home or by using your mobile device. Selling a Car Preparing to sell a car online still requires all the prerequisites such as getting all the paperwork, safety and drive clean paperwork updated, as well filling up a used vehicle information package. Once all of this is ready, it is easy to create a file for your vehicle. You should take as many exterior and interior photos as possible. Focus on the positives as well as the negatives (i.e. the scrapes, dings and dents that come from normal usage). Compose a detailed but readable note about the car, why you’re selling it and what its maintenance record has been. Note any quirks, specific issues as welll as the latest mileage which is an important bit of information most car sellers fail to include. While mileage isn’t an ovrall indicator of the car’s condition, it can be helpful in determining what upcoming maintenance is due (this translates to expected expenses). With all of this information in hand, you can easily go post your car for sale on various sites like Craigslist, Kijiji or more car-specific websites like Carpages.ca, Autotrader.ca or Carmigo. Be honest and candid, write about your car as if you’re referring to a friend, and present a clear and accurate picture of the car’s condition. This will attract more potential buyers than a sketchy or incomplete picture of a car which might be hiding potential problems. As interested buyers contact you, do your best to answer their questions within reasonable limits. Expect them to ask you t bring down the price, it’s part of the process. Buying a Car I never buy cars brand new. I find that if done right, buying a second hand car can be rewarding and save thousands of dollars which can go into more important expenses. Understanding and researching the car you want to buy has never been easier. I am partial to Volkswagens, and there’s a large community of users online that discuss every aspect of every model. It is easy to learn what to look out for based on real user experiences. There are also resources for used cars like MSN Autos and Edmund’s  which offer various user reviews and give you a clearer picture of what particular makes, models and years are like. They also cover various common issues and are a good resource to help you decide if the car you think you want is the right one for you after all. I was recently looking at an older BMW X5, but reading the service history and expense incurred by various users turned me to a more practical option. Reviews can only take you so far and once you have found the right car, you should do your best to inspect it thoroughly; or even better, bring your mechanic over to give it a look see. That’s not always a possibility, however, so being able to properly test drive a car and look for issues is quite important. Finding used cars online is quite easy, there are virtually hundreds of websites that offer local used cars. Even general buy and sell sites like Kijiji and Craigslist offer a plethora of dealer and user-sold cars. Buying from a dealer is generally more expensive, but there’s some mild form of insurance that the vehicle should work as described. Buying from owners has its risks but most people are good about being straightforward with the information and you can likely bring down the price when making a deal with someone who just wants to sell their old car to get a new one. All of the above websites and services are accessible through smartphones now, so it is not hard to do car searches on-the-go. Mobile devices are really useful in the process because you can visit a car that’s on sale write your notes on your smartphone and even take pictures to reference later on (or show your mechanic if he can’t come see it himself), these are all just helpful tools to get through the once daunting task of selling or buying a second hand car.

Safer used cars for teen drivers

- KOMO News By Consumer Reports Published: Jun 5, 2015 at 12:35 PM PDT Last Updated: Jun 5, 2015 at 12:35 PM PDT Teens are almost three times more likely to be involved in a fatal car accident than drivers who are older. Consumer Reports says it's important to make sure your teen is driving the safest car possible. It's a mistake to buy a very old car for a new teen driver, because it's going to lack some of the very important safety features that might save lives. Most important is electronic stability control, which helps keep drivers from spinning out or rolling over. And side curtain airbags are also critical. They not only provide a cushion, but they also can help keep passengers inside during an accident. Consumer Reports recommends a midsized or a large sedan for teenage drivers. They're lower to the ground, so it makes the vehicles less prone to roll over. And they're easier to maneuver than a big SUV. Consumer Reports combed through its test results and identified 10 used-car options that have the recommended safety features, are reliable, and are under $10,000. They include the 2006 to 2010 Hyundai Sonata non-turbo 4-cylinder,  the 2009 to 2012 Chevrolet Malibu 4 cylinder and the 2009 to 2013 Mazda 6i.