If you are searching for “buying a junk car,” one probably assumes that you are trying to unload a junk car.  There are many businesses and organizations that will gladly buy your junk car, under certain conditions.  In order to maximize the value of your junk car, be sure you are aware of the market value of the car, the relative price of components that can be salvaged from it and if you might want to donate the car.  Therefore, when it is time to find someone to buy a junk car, having this information in mind will help you maximize what you will get in return.

Some charities will ask you to donate a junk car as an alternative to finding some to buy the junk car.  The charities will then dispose of the junk car and use the proceeds for charitable purposes.  If you do this, you may be able to claim the donation on your taxes.  Bear in mind however, that you will only be able to claim the saleable market value of the car, not the original value of the car.  This of course will be very little, if the car is indeed a junk car.  However, if the charity will haul the junk car away at their expense and it frees you from the burden of the junk car, you may want to consider this option.

Most national junk car buyers will have local affiliates that will tow away the junk car after you have made the appropriate arrangements with the national buyer.  When contacting the nation buyer, you will usually have to provide the make and model of the car as well as the year of manufacture.  You will leave contact information so you will be contacted with a quote for your junk car.

It is against the law to sell any car, even a junk car, as long as there is a lien against it.  You may not sell a perfectly working car out of spite or revenge and you will be subject to fines and penalties for violating federal law.  The title and the car must remain in your possession until the lien and other debts that the car secures are resolved.  You will not be able to use the proceeds from the junk car to settle the debt.

Almost all large junk car removal services will pay for removal of the car through a towing service.  You should not have to pay to have the car towed away if a company is buying your junk car.

Common sense is your best friend when buying cars online.  Although there are some inherent risks, using a verified and trusted auto trade and selling website will substantially cut down on the risks of buying a car online.  Knowledge of yours state’s lemons laws will be useful before proceeding to search for a car and in addition, researching information about the specific car you intend to buy will also be important.  In addition to all of these issues, you will need to ensure that there are no liens against the car and that the title of the car is transferred to you.  It is not easy to buy a car online, but you will find the process is similar to buying a car at a local dealership or used car lot.  Thoroughness is necessary to ensure your transaction has diminished risks and proceeds smoothly.

The seller of the use car must note if the car has a warranty and ensure that the buyer’s guide is given to the person buying the car online.  Information reported on the car must be accurate and truthful.  The federal Truth in Mileage Act of 1986 bans the tampering of a car’s odometer in order to make the car appear to have less mileage.  This used to be a common fraudulent procedure to deceive buyer.  The seller must also disclose issues with the car, such as failure to pass inspection and parts that will need to be repaired in order for the car to function properly.  The Magnusson-Moss Warranty Act offers broad federal regulations on warranties and guarantees and will be covered in depth later in this article.

Any individual that is going through bankruptcy or any other financial distress may have a lien placed on their vehicle.  This will usually be because the car is used as collateral against an unsecured debt or the individual has not made the required payments.  A seller must disclose any liens against the car and from there you will have to determine how that lien will affect you.  The car may be seized to pay the debt and you cannot take possession.  In other cases, the seller may keep the “title” to the car while repaying the debt and provide the buyer with another lien against the car.  This helps the buyer as if the car must be seized, the buyer will be compensated.  In usual cases however, the ownership of the car cannot be transferred until the liens are resolved.  When buying a car online, you should research if there are liens against the car and if this may prevent your continued ownership of the automobile.

To have proper ownership of the car you buy online, you must register the vehicle with state authorities.  Federal law creates a national directory of titles and registration to hamper those that may steal cars and also for law enforcement purposes.  You will need to check with your state’s Department of Motor vehicles or the equivalent licensing and registration division to have the vehicle inspected.  Failure to meet federal or state requirements for emissions may prevent the registration and legal operation of the car.

A written warranty is a written promise that guarantees the workmanship and performance of the product in a stated time.  When you buy the car online, it may have a written manufacturer’s warranty.  Written warranties do not disclaim the below implied warranties.  A written warranty is merely additional promises made by the supplier to the consumer.

An implied Warranty is a standard set by the jurisdiction that imposes expectations on the sale of products between supplier and consumer.  The provisions were determined by the Uniform Commercial Code of 1952.  Implied warranties that are applicable to buying cars online also place certain expectations of performance on the product, including:

• Fitness for a particular purpose – the product must perform for the function as advertised.

• Merchantability – the product must have all defects noted by the merchant at the time of sale and will fulfill the purpose for which it was sold.

• Warranty of title – the seller has not stolen the goods and has a legal right to sell to the consumer.

What is purchasing “as is?’

When buying a car online, you may see the “as is” distinction.  This tag will be applied to cars that are out of warranty and may need repair.  In spite of this tag, the seller is required to disclose any information about defects and issues related to the car.  Failure to do so will be a violation of lemon laws.  An implied warranty that guarantees certain aspects of the product is no longer in effect once this is claimed.

Every state has unique lemon laws that protect consumers that buy cars online.  Generally, these laws will specify a number of days or repair attempts that will classify a car as non-functioning or as its commonly known, a “lemon.”  Some states may even require the party that sold the car to pay for the attorney fees of the buyer if the case goes to trial and the plaintiff wins.  This is aimed at prevented continued violations of the lemon law and unscrupulous business practices.  It is important to note that lemon laws generally cover instances when the vehicle is not under warranty and information about the state and condition of the car has been concealed from the consumer.  Note that if a car simply “breaks down” it is not a lemon.  Repeated failures will be what will constitute a possible lemon car.

The Magnusson-Moss Warranty Act of 1975 (Public Law 93-675) is legislation that regulates consumer warranties when offered on products.  This legislation does not force suppliers to give warranties to consumers, but merely ensures that the warranties are fair and easy to understand.  

The Magnuson-Moss Warranty Act also sets up standards for companies to respond and be accountable for their warranties and creates an alternative dispute resolution infrastructure to resolve low-level disputes without the need to burden the judicial system.  This covers written guarantees, so oral proclamations and promises are non-enforceable and that at the discretion of the consumer.  The Magnuson-Moss Warranty Act applies to consumers only and is not meant to regulate relations between suppliers that resale products.

You need to be truly ready to buy a car before signing a contract or other binding document that obligates you to pay for the car.  Once you commit to buying a car, you will be financially responsible and in most circumstances, you cannot take it back.  Therefore, when buying a car, being through, reading every word or every agreement you sign and getting all promises on paper will help you make an informed decision that leaves you with an appropriate means of recourse if the car is a lemon or is flawed in any other way.

Magnuson-Moss Warranty Act and buying a car

This act guarantees all written warranties issued by the manufacturer or other agent.  This is to avoid litigation over the promises made by the manufacturer to the buyer.  As such, many warranties will allow for alternative dispute resolution and other measures to ensure customer satisfaction.  Although you will have this protection when buying a new car, buying  used car will be a grey area, especially as some cars may be sold without a warranty or “as is,’’ with no guarantee that the car will function as it should.

Uniform Commercial Code of 1952 defines implied warranties, which shall include the product’s:

• Fitness for a particular purpose – the product must perform for the function as advertised.

• Merchantability – the product must have all defects noted by the merchant at the time of sale and will fulfill the purpose for which it was sold.

• Workmanlike quality- any item made or constructed for the consumer must be made to acceptable standards.

• Warranty of title – the seller has not stolen the goods and has a legal right to sell to the consumer.

The dealer must abide by the UCC and sell you the product in good faith, believing that it will function as it should and that any written guarantees made (pursuant to the Magnuson-Moss Act) will be honored.  Acting in bad faith or selling a defective product will open venues of enforcement, such as state lemon laws and even possible fraud is bad faith attempts have been made to deceive the consumer.  Subsequent legislation has outlaws such practices as tampering with odometers to lower mileage.

Mileage – the amount of miles a used car has driven.  This is a good but not perfect indicator of the life of the car, more so than the years it was active or the purpose for which it was used.

Buyer’s remorse – the feeling some get after making a large purchase.  Sadly, if you have buyer’s remorse, there is very little you can do, unless you are within a very narrow time frame that state law allows you to work with the dealer to return the car.  Dealers that offer return clauses will only do so because it benefits them.  You will often need to pay to return the car.

As is – this term means that you are buying the car without a warranty an all defects and problems with the car are disclosed to you.  The dealer or seller is not obligated to cover the cost of repairs or liable for problems with the car.  It is important to analyze agreements between you and the dealer to check if this clause is included in the agreement.  In spite of this tag, the seller is required to disclose any information about defects and issues related to the car and failure to do this will be a violation of state lemon laws.  

Inspection – you are entitled to have a mechanic independent of the dealer to check the car for faults, defects and potential problems before buying it.  You will need to request that the dealer allow you to inspect the vehicle at the dealership or at the mechanic’s.  Feel free to walk away from the deal if the dealer refuses inspection.

Warranty – this is a written guarantee from either the manufacturer or deal of the used car to cover some or all of the defects and part failures during the specified term of the warranty.  The warranty must be specific on the obligations of the manufacturer or dealer and specify the percentage of the costs of parts and labor will be covered under the warranty.

Service contract – this is similar to a warranty as it provides some benefits and defines the relationship between the buyer and dealer.  For service contracts, the buyer typically purchases this from the dealer and the contract will define coverage, deductibles, prices and exclusions.  Carefully analyze the terms of a service contract before agreeing to purchase one from a dealer.

Test drive – if you have the opportunity to test-drive a vehicle, do so.  Not only will this confirm your desire to buy the used car, you will be able to identify glaring issues with the car that will affect your buying decision.

You must be prepared for the financial obligations of buying a car.  This includes ensuring you will be able to make timely payments if you choose to finance.  Ensure you check the numbers on the financing agreement and that you are aware how interest will affect the principal you will owe to the dealer or salesperson.  Remember that the absence of a down payment does not necessarily work out in your favor as this is a greater principal that you will be paying interest on.

Destination charge – cost to deliver the car from the factory to the dealership, is set by the manufacturer and the buyer will end up paying it.  Any other destination or delivery fee is unnecessary.  This destination charge is a mandatory fee that cannot be avoided.

Title and registration fees – if you require a new license plate for the vehicle, the dealer will charge you this fee, set by the state, to acquire it for you.  The fee is lower if you already have plates and want to transfer them to the new vehicle.  You must register the vehicle.

Documentation fee – this fee is charged for processing the paperwork related to acquiring and buying the car.  Many states cap this fee but other states where there are no limitations will have the he run into the hundreds of dollars.  Consider this when buying a car in another state.

Sales tax – even cars are subject to sales tax.  Buying the car in another state will subject you to your state’s sale tax once you register it in your state.  The dealer may help facilitate registering the vehicle in your state.

Advertising fees – this fee can be challenged if it is not immediately disclosed to you.  This is the char that manufactures charge dealers for advertisement and some dealerships will try to pass it one to the consumer.

Guaranteed Auto Protection Insurance – if you are leasing, this fee covers the difference between your payments and the life of the lease if the car does not survive until the end of the lease.

Extended warranty/service contract – at your discretion, you may purchase additional protection for your vehicle.  Do so only if you determine this is to your advantage and that the conditions are fair to you.  Many drivers will never need their warranty but others have saved substantially because of it.

Just about any other fee that can be added to a vehicle can be disputed, challenged, or avoided.  Other fees and coverage can be had cheaper elsewhere.  All of these fees are the reason why it is important to read all of the terms related to buying or financing a car.

Federal law requires dealers that sell over six cars a year to provide a buyer’s guide to whomever buys a car.  This will contain important information about the car and serves as a large disclaimer about what the buyer may encounter through buying and using this car.  The buyer’s guide must list the conditions of sale (as-is vs. warranty) as this is necessary to determine liability for faults, defects and repairs the car will need.  If there is a warranty, the guide will note repair costs paid by the dealer.  The buyer’s guide also includes disclaimers, such as there is no guarantee of enforcement on spoken promises and that promises made in writing should be kept safe.  In terms of technical specifications, the buyer’s guide will list all mechanical systems on the car and possible faults and your right to have the car inspected by an independent mechanic.  The right to test drive the car may also be included.

The seller has no legal obligation to allow you to return the car once you have driven it off the lot.  There will be limited exceptions in California and Ontario.  Even then, in the case of California, you must pay to exercise the return option.  Returns can only be achieved if a return clause is added to the contact between you and the seller.  Otherwise, the car is your responsibility.  The federal government has no say in this matter.

Critical car systems that should be inspected before buying a used car

– Brake system

– Cooling system

– Differential

– Electrical system

– Engine

– Exhaust system

– Frame & Body

– Fuel system

– Inoperable accessories (AC, Heater, gauges)

– Steering system

– Suspension system

– Tires

– Transmission

– Wheels

Although all of these systems will have unique problems, common problems affecting most systems in used cars are fluid leakage, cracks/visible damage, poor alignment and worn parts.  A pre-purchase inspection from an independent mechanic can spot these potential issues and advise you on your buying decision.  Some or all damage to these systems will be covered by an implied warranty if the system is critical to the car’s safe operation.

The Federal Trade Commission, as well as standard practice recommends speaking with the dealer and entering an alternative dispute resolution, if necessary.  Some warranties may require ADR before seeking legal action.  Through ADR, you may reach a resolution that will have the dealer cover the cost of repairs.  Check your service contract and any warranties that came with the car in the event of a problem.

Filing a complaint with the local Better Business Bureau will help alert other potential buyers about fraudulent or unscrupulous dealers.  Persistent complaints will almost certainly lead to increased scrutiny into the practices of that use car dealer.  Class action against the dealership by several injured parties may be possible as a result of this investigation.  Filing a complaint with the Federal Trade Commission is also a possibility for larger dealers.

Small claims court is the ultimate destination for litigation related to buying a used car.  You may have to consider an attorney when going to small claims court, especially if the other party intends to have legal representation.  Here is where it is critical to have all promises in writing.  The clerk of the small claims court will advise you on the strength and possible limitations on your claim against the seller.

Private sellers are not bound by the same rules as dealers.  For one, they do not have to abide by regulations, such a providing a buyer’s guide and all sales are considered “as is” unless otherwise noted by the seller.  You need to be aware of limitations on the car’s warranty, such as if the warranty or service contract is non-transferable.  This may put you on the hook for repairs if the car is indeed going to be non-functional or require maintenance at some point.  Most states do no set a minimum requirement for the car to function or for inspection before the car is sold.  Failure to meet federal or state requirements for emissions may prevent the registration and legal operation of the car.  The seller has no obligation to have the car meet inspection standards before selling it.

Buy a car / buying a car/car buying/buying a car out of state

Buying a used car will be a daunting task for those uninitiated in the process.  The uninformed are almost always victimized in these transactions, as used car dealers often do not have to the same standards are car dealerships.  You are however, entitled to certain rights as a buyer under consumer protection laws.  Be aware of the terms related to selling used cars and the obligations of the seller, including implied warranties.  All promises made during used car transactions must be recorded in writing to be legally valid.  In getting promises and other critical information, you will gain the protection of federal and state laws and ensure that your used car transaction is safe and minimizes the risk of fraud.

Truth in Mileage Act of 1986 – federal law that bans the tampering of a car’s odometer in order to make the car appear to have less mileage than it has actually traveled.  This is one of several laws that require honest and accurate reporting on the condition of a used car.

The Magnusson-Moss Warranty Act of 1975 (Public Law 93-675) is legislation that regulates consumer warranties when offered on products.  This legislation does not force suppliers to give warranties to consumers, but merely ensures that the warranties are fair and easy to understand.  

The Magnuson-Moss Warranty Act also sets up standards for companies to respond and be accountable for their warranties and creates an alternative dispute resolution infrastructure to resolve low-level disputes without the need to burden the judicial system.  This covers written guarantees, so oral proclamations and promises are non-enforceable and that at the discretion of the consumer.  The Magnuson-Moss Warranty Act applies to consumers only and is not meant to regulate relations between suppliers that resale products.

Uniform Commercial Code of 1952 defines implied warranties, which shall include the product’s:

• Fitness for a particular purpose – the product must perform for the function as advertised.

• Merchantability – the product must have all defects noted by the merchant at the time of sale and will fulfill the purpose for which it was sold.

• Workmanlike quality- any item made or constructed for the consumer must be made to acceptable standards.

• Warranty of title – the seller has not stolen the goods and has a legal right to sell to the consumer.

The implied warranty will offer you protection against “lemon” cars, which are non-functional and hurtful to consumers that expect a certain level of quality when they buy a vehicle.  In short, the vehicle has to work for the dealer to sell it.  A breakdown is not an automatic violation of an implied warranty by repeated breakdowns and excessive repairs will make a compelling case for the violation of an implied warranty.

As is – this term means that you are buying the car without a warranty an all defects and problems with the car are disclosed to you.  The dealer or seller is not obligated to cover the cost of repairs or liable for problems with the car.  It is important to analyze agreements between you and the dealer to check if this clause is included in the agreement.  In spite of this tag, the seller is required to disclose any information about defects and issues related to the car and failure to do this will be a violation of state lemon laws. 

 

Inspection – you are entitled to have a mechanic independent of the dealer to check the car for faults, defects and potential problems before buying it.  You will need to request that the dealer allow you to inspect the vehicle at the dealership or at the mechanic’s.  Feel free to walk away from the deal if the dealer refuses inspection.

Warranty – this is a written guarantee from either the manufacturer or deal of the used car to cover some or all of the defects and part failures during the specified term of the warranty.  The warranty must be specific on the obligations of the manufacturer or dealer and specify the percentage of the costs of parts and labor will be covered under the warranty.

Service contract – this is similar to a warranty as it provides some benefits and defines the relationship between the buyer and dealer.  For service contracts, the buyer typically purchases this from the dealer and the contract will define coverage, deductibles, prices and exclusions.  Carefully analyze the terms of a service contract before agreeing to purchase one from a dealer.

Test drive – if you have the opportunity to test-drive a vehicle, do so.  Not only will this confirm your desire to buy the used car, you will be able to identify glaring issues with the car that will affect your buying decision.

Cooling off period – some dealers may allow up to three days for the buyer to change their mind.  This is not required by law and can be changed or modified by the deal at any time.  It is good practice to buy the car with the complete intention of keeping it, rather than relying on a cooling off period promise.

The Buyer’s Guide is a federal requirement that requires the deal to disclose:

– The conditions of sale (as-is vs. warranty)

– Repair costs paid by the dealer, terms of the warranty

– No guarantee of enforcement on spoken promises

– That promises made in writing should be kept safe

– All mechanical systems on the car and possible faults

– Your right to have the car inspected by an independent mechanic

The seller has no legal obligation to allow you to return the car once you have driven it off the lot.  There will be limited exceptions in California and Ontario.  Even then, in the case of California, you must pay to exercise the return option.  Returns can only be achieved if a return clause is added to the contact between you and the seller.  

Otherwise, the car is your responsibility.  The federal government has no say in this matter.

– Brake system

– Cooling system

– Differential

– Electrical system

– Engine

– Exhaust system

– Frame & Body

– Fuel system

– Inoperable accessories (AC, Heater, gauges)

– Steering system

– Suspension system

– Tires

– Transmission

– Wheels

Although all of these systems will have unique problems, common problems affecting most systems in used cars are fluid leakage, cracks/visible damage, poor alignment and worn parts.  A pre-purchase inspection from an independent mechanic can spot these potential issues and advise you on your buying decision.  Some or all damage to these systems will be covered by an implied warranty if the system is critical to the car’s safe operation.

It may seem that the dealer will work to gain an unfair advantage on your or find ways to rip you off.  This might feel even more the case if you discover a defect in the car after you have bought it.  Still, there is no need to get a lawyer just yet.  The Federal Trade Commission, as well as standard practice recommends speaking with the dealer and entering an alternative dispute resolution, if necessary.  Some warranties may require ADR before seeking legal action.  Through ADR, you may reach a resolution that will have the dealer cover the cost of repairs.  Check your service contract and any warranties that came with the car in the event of a problem.

Communicating with the seller is vital, especially if you are working with a dealership that is a branch of a larger company.  The owners, operators and managers of these enterprises may in some cases, modify the warranty to cover certain issues and satisfy the customer.  If you find that the seller is willing to work with you, in good faith, then you should cooperate with them to resolve the issue.

Filing a complaint with the local Better Business Bureau will help alert other potential buyers about fraudulent or unscrupulous dealers.  Persistent complaints will almost certainly lead to increased scrutiny into the practices of that use car dealer.  Class action against the dealership by several injured parties may be possible as a result of this investigation.  Filing a complaint with the Federal Trade Commission is also a possibility for larger dealers.

Small claims court is the ultimate destination for litigation related to buying a used car.  You may have to consider an attorney when going to small claims court, especially if the other party intends to have legal representation.  Here is where it is critical to have all promises in writing.  The clerk of the small claims court will advise you on the strength and possible limitations on your claim against the seller.

Private sellers are not bound by the same rules as dealers.  For one, they do not have to abide by regulations, such a providing a buyer’s guide and all sales are considered “as is” unless otherwise noted by the seller.  You need to be aware of limitations on the car’s warranty, such as if the warranty or service contract is non-transferable.  This may put you on the hook for repairs if the car is indeed going to be non-functional or require maintenance at some point.  Most states do no set a minimum requirement for the car to function or for inspection before the car is sold.

Any individual that is going through bankruptcy or any other financial distress may have a lien placed on their vehicle.  This will usually be because the car is used as collateral against an unsecured debt or the individual has not made the required payments.  A seller must disclose any liens against the car and from there you will have to determine how that lien will affect you.  The car may be seized to pay the debt and you cannot take possession.  In other cases, the seller may keep the “title” to the car while repaying the debt and provide the buyer with another lien against the car.  This helps the buyer as if the car must be seized, the buyer will be compensated.  In usual cases however, the ownership of the car cannot be transferred until the liens are resolved.  When buying a used car from a private seller, you should research if there are liens against the car and if this may prevent your continued ownership of the automobile.

To have proper ownership of the car you buy from a private seller, you must register the vehicle with state authorities.  Federal law creates a national directory of titles and registration to hamper those that may steal cars and also for law enforcement purposes.  You will need to check with your state’s Department of Motor vehicles or the equivalent licensing and registration division to have the vehicle inspected.  Failure to meet federal or state requirements for emissions may prevent the registration and legal operation of the car.  The seller has no obligation to have the car meet inspection standards before selling it.

Every state has unique lemon laws that protect consumers that buy used cars.  Generally, these laws will specify a number of days or repair attempts that will classify a car as non-functioning or as its commonly known, a “lemon.”  Some states may even require the party that sold the car to pay for the attorney fees of the buyer if the case goes to trial and the plaintiff wins.  This is aimed at prevented continued violations of the lemon law and unscrupulous business practices.  It is important to note that lemon laws generally cover instances when the vehicle is not under warranty and information about the state and condition of the car has been concealed from the consumer.  Note that if a car simply “breaks down” it is not a lemon.  Repeated failures will be what will constitute a possible lemon car.

Buy used cars/buying a used car/buy a used car/what to look for when buying a used car 

Most people, before buying their first car will research car buying tips in order to maximize their trip to a dealer or used car salesman.  Common sense is your best car buying tip.  As long as you remain firm about what type of car you want and the protection you want on it, you will prevent the possibility of being sold a car you don’t want or protection you don’t need.  Reading all documents, including the fine print is absolutely necessary to ensure that you can hold the seller accountable for faults and other issues that might arise from the purchase of this car.

Do you really want a car?  It may seem like a silly question, but if you decide a week after you have bought it that the car will be too expensive or you do not need it, you are out of luck.  Unless the dealer allows you to have a cooling off period, you are most likely stuck with the car and cannot return it.  There is no legal option to force the dealer to take the car back and if you are unsatisfied with your buying decision.  There are limited exceptions in some states which gives consumers time to consider their financing options or have a paid return option.  Do not rely on these laws; it is better to be sure the car is what you want before committing to buy it.

The warranty protects your car against damages and defects by guaranteeing the repair of parts and cost of labor to fix the car.  Full warranties will cover all of these costs, while limited warranties will cover a capped amount or percentage.  Understanding the limits of the warranty you are getting on the car is important to determining what you may pay in the short and long term to keep the car operational.  Not all cars come with warranties and some may have the typical rights of a warranty, implied or otherwise, waived by selling the car “as is.”  Although you have the protection of lemon laws, understand that if the car breaks down a week after you’ve bought it, it is not a lemon.  Only substantial damages, excessive repair bills and frequent repairs can classify a car as a lemon and help you get your money back.

You will be faced with the decision to buy a service contract.  In fact, many car buyers do purchase a service contract.  A good service contract offers piece of mind and allows the car owner to perform necessary maintenance or repairs for a lower cost.  This is similar to a warranty but usually only offers a discount on the cost of parts and labor.  Usually your warranty will be sufficient to avoid buying a service contract right away.  If it is not, you may want to take the service contract option, so that you may supplement the warranty.  When buying the car, ask if you will be offered the service contract after the warranty expires.  In addition, study the terms of the contract and ensure it covers essential services and repairs the car may need.  Also, determine who will enforce the service contract, especially if the entity you are buying the contract from ceases to exist.

If you want peace of mind when figuring out how to buy a car, you should research the seller, either through independent reviews or by consumer protection agencies, such as the Better Business Bureau and state authorities.  These entities will keep records of complaints against business and many patterns of unsatisfied customers should flag a prospective buyer of the potential for a less than favorable transaction.  The less reputable the dealer, the less credence you should give to promises that the cars are “certified-pre-owned” or that the warranty is particularly suited to your needs.

Make sure you can identify the following things in the financing agreement:

– exact cost of the car

– annual percentage rate

– the number of payments to be made

– fees for financing for the amount that you will be financing

– how much the car will cost you, when factoring for financing options and interest.

Worse than sticker shock is paying for what seemed like a low-priced car, only to be paying exorbitantly for that car for years with a rising interest rate and never ending payments.  Therefore, when a dealer offers “no money down payments” and other inducements to buy, understand that you will pay more in the long term due to interest.  Financing may be right for you, but understanding how much financing will cost is important in buying a car.

All cars in the United States must be registered with the local Department of Motor Vehicles (or equivalent in your state).  With the internet, you may check the history of any vehicle, especially any used car for sale.  In researching the history, you will find a record of accidents and other issues with the car that are not readily apparent through a cursory inspection of the car.  Let the vehicle history affect your decision to buy the car.

Generally, you will be given the right to have an independent mechanic check the vehicle.  If this is available to you, having the vehicle inspected before buying is an important step in ensuring you are not facing hidden costs at a later date.  Test drives are also a common way to inspect the vehicle.  Test drive the vehicle when you can to determine how well the car works and if you are comfortable committing to buy that vehicle.  Neither inspecting nor testing the vehicle will lead to an increased chance of making a poor decision.

Before you buy a car, you must understand how leasing works in order to determine how the value of your car will depreciate and if you are getting the best deal when financing your car purchase.  Leasing is the typical alternative to buying a car outright and in times of economic contraction, where low-interest financing is not available, leasing has grown tremendously as an option for car buyers.  Before leasing a car, it is important to understand in full the terms and conditions of the lease, its cost to you and the value of the car you are leasing.  

Incomplete information in any aspect of the leasing a car process will put the potential buyer at a disadvantage and ensure the deal will not be in the buyer’s interest.

MSRP – Manufacturers Suggested Retail Price is the base cost of the car, before fees, taxes and other costs of the sale.  Additional features to the car are reflected in the MSRP.  

Negotiated price – you are not always paying the MSRP when buying or leasing a car.  You may come to an agreement with the dealer that involves certain additions, terms or agreements that lower this price.  You will need this figure when determining if you should lease the car.  You may be able to negotiate some dealer fees, but you will not be able to negotiate state and local fees.  Taxes, rebates, fees and other credits are not reflected in the negotiated price.

Tag, title, registration, documentation fees – some fees reflect taxes levied by local authorities and cannot be avoided, although some fees, such as documentation fees, may be capped by local law.  Other fees, such as the destination charge are mandatory as this reflects the cost to move the vehicle from the factory to the dealer.  Be aware of which fees are mandatory and which are avoidable before agreeing to lease a car.  An important distinction in leasing is that fees are paid up front and are not financed.

Lease acquisition fee – you will typically be assessed a fee by the dealer to acquire a lease on a car.

Down payment – by making a down payment, you reduce the principle owed on the car, decreasing the long term cost of the car that would accrue due to interest.

Trade in – the cost of leasing a car can be modified if you trade in your current car to the dealer.  Determine if the dealer offer on the trade in value of your car is worthy before agreeing to include a trade-in as part of the leasing agreement.

Rebate – dealers may offer a rebate for certain options or as a promotion to induce you into buying or leasing a car.

Tax break – you will need to be familiar with the tax laws in your state.  Some states do not tax motor vehicles at all.  Other states will assess tax on monthly payments only rather than the sale price of the vehicle.

The money factor is the interest on the lease and it is not always disclosed by the dealer during a leasing arrangement.  The money factor can be multiplied by 2,400 and this will give you a ballpark estimate of the interest rate collected by the dealer for leasing the car.  For instance, a money factor of .000750 is equal to an annual percentage rate of 1.8%.  The lower the money factor (also expressed as lease factor, lease rate or factor) the better the lease deal will be.  One’s credit rating will have a large impact on the money factor available with the best rates available to those with a spotless credit rating.

Those considering leasing a car will find the use of an online lease vs. buy calculator a useful tool in determining if they should lease a car.  These are widely available and can be found through a reliable search engine.  The typical lease calculator will factor terms MSRP, deduction, interest, and can sometimes provide you with a comparison of the cost to you in terms of leasing or buying.

This is the value of the car after the lease has expired and will help you determine if you intend to buy the car, trade in the vehicle or sell the lease before it is up.  You should research how much the car will depreciate and what the residual value of the car will be at the end of the lease before agreeing to lease a car.  Mileage will have an effect on the value of the car after the lease is up.  If you know you will be using the car heavily, negotiating a higher limit on the annual mileage allotment will prevent you from being penalized later, as per the terms of the agreement.  The higher the residual value of the car at the end of the lease arrangement, the lower the monthly payments you will have to pay on the car.  The smaller the gap between initial cost and lease end value, the lower payments will have to be made on the lease.

Unlike a loan, a longer lease is not necessarily as disadvantageous as a typical loan.  It is advisable to pick a lease term as long as the warranty for the vehicle, which will protect you during the leasing period against faults and accidents.  Therefore, you may have a long lease on a vehicle with a long warranty.  Foreign models also tend to depreciate less, which means at the end of the lease, the car will be worth more than its domestic counterpart after a similar term.  Lease terms are typically expressed in months, generally in increments of a year (36, 48, 60 months) but odd terms may be used to have you come in at another, less busy point of the year at the end of the lease.  Short term leases are generally more expensive than longer term leases, owing to the fact that cars will depreciate rapidly during the first 24 months after they are sold.  A car usually retains only 34%  of its initial value after five years.

In order to obtain a Washington permit or licensing, you will need to work with the Washington State Department of Licensing.  Minors as young as 15 may receive permits if they are enrolled in a driver’s education class.  They do not need to pass the practice permit test for Washington.  Minors that are not in driver’s education and are 15 and a half can obtain an instruction permit by passing the practice permit test.

You will need to provide proof of identity but will not need to show residency in Washington, unless you do not have a Social Security Number.  Parental consent will also be mandatory for those under the age of 18.  The fees associated with licensing and testing can be paid by cash, check or credit card, although some DMV locations will not accept credit cards for payment.

The fee for the knowledge test is $20 and this fee is charged every time the test is taken.  Another test can be taken 4 hours after you fail the first time.  To avoid multiple failures, you must study the Washington Driver Guide, which will contain all the information you need to pass the practice permit test for Washington.  The practice permit test in Washington is conducted on computers and has 25 questions.  You will need to get 80% correct in order to pass and receive the instruction permit.

permit practice test Washington/practice permit test Washington

To receive a learner’s permit in West Virginia, you will need to go to the DMV, which is an agency of the West Virginia Department of Transportation.  When applying for the permit, you must show your birth certificate, social security card and two proofs of West Virginia residency.  You will find additional information on the identification requirements at the DMB website.

You will be able to find a practice permit test for West Virginia at the DMV website.  There were be 20 questions and an answer key is provided.  These questions will be similar but not the same as the questions on the actual knowledge test.

The Driver’s Licensing Handbook is also a useful tool to help you pass the practice permit test for West Virginia.  You may find this online at the DMV website in addition to a Spanish and Japanese translation version.  This document will contain all provisions necessary to understand typical licensing requirements as well as the requirements of the Graduated Driver’s License.  All of the information that will be tested on the practice permit test for West Virginia can be found in this manual.

You must be at least 15 years old to receive a permit and demonstrate that you have at least 20/40 vision with or without corrective lenses.  Parental consent is also required for minors to obtain their permit.

permit practice test West Virginia/practice permit test West Virginia

To receive a learner’s permit in Wisconsin, you will need to go to the DMV, which is an agency of the Wisconsin Department of Transportation.  When applying for the permit, you must show your birth certificate, social security card and two proofs of Wisconsin residency.  You may also have to show proof of legal US residence.  You will find additional information on the identification requirements at the DMV website.  Any person 16 and older may have a driver’s license in Wisconsin but parental consent will be required at all stages of the licensing process.

You will be able to find a practice permit test for Wisconsin at the DMV website.  There were be 20 questions and an answer key is provided.  These questions will be similar but not the same as the questions on the actual knowledge test.  the actual test will measure your knowledge of traffic rules, sign and driver safety.

The Wisconsin Motorists’ Handbook is also a useful tool to help you pass the practice permit test for Wisconsin.  You may find this online at the DMV website in addition to a Spanish and Hmong translation version.  This document will contain all provisions necessary to understand typical licensing requirements as well as the requirements of the Graduated Driver’s License.  All of the information that will be tested on the practice permit test for Wisconsin can be found in this manual.

permit practice test Wisconsin/practice permit test Wisconsin