First Time Car Buying Tips

Buying a car isn’t always easy. It’s difficult to know what you need and whether a vehicle meets those needs. However, it’s important to nail down exactly what you’re looking for in a car before purchasing it. Questions To Ask Yourself The first thing you need to determine before looking for the right vehicle is why you’re in the market for a car. If you just got a new job across town, you’re probably looking for transportation solely for the commute. If you’re an athlete who needs to drive to practice, you’re probably looking because you need a vehicle to transport your gear. Once you determine why you need a car, you can then figure out what kind of vehicle meets those needs. A family expecting its first child will need to look for a safe, reliable car. On the other hand, an woodsman may want a vehicle that can handle rough terrain with four wheel drive. Be sure to think carefully about how the car will be used to determine what specific features you’ll be looking for. The next thing you need to ask yourself is how much you can afford to spend. Before heading to the dealership, nail down a budget. Kelley Blue Book suggested calculating this according to how much you can pay per month. First, calculate how much you earn each month. Then, subtract all necessary costs. This includes rent or mortgage, utility costs, food and any debt you’re currently paying off, such as credit cards or student loans. The remainder is what you have leftover to spend or save how you’d like. Tweet This: “Taking out a car loan will help you build good credit.” Like many people, you may find you will need some added help financing your purchase of a new set of wheels. Getting a loan will help you pay for the car upfront, while you pay the lender back in smaller increments, usually over the course of a few years. Your interest rate may depend on several things, including your credit score and income, but the average right now is about 5.04 percent for a three-year loan to buy a used car, according to Bankrate. Once you nail down how much you can spend on a car and the terms of the loan, you can determine how much you can afford each month. Be sure to cover all your bases in determining this amount, including: Loan payments Insurance fees Registration costs Gas Maintenance, such as oil changes Parking Business Insider pointed out that first-time auto buyers can take this opportunity to begin building good credit. Taking out a loan and paying it back consistently on time will help boost your credit score and give you an advantage next time you need to take out a loan, whether it’s for a new car or something else, like a mortgage. However, if you fail to budget correctly and can’t make the loan payments every month, your credit can become damaged quickly, causing you more problems in the future. Questions To Ask The Salesperson After you have determined why you need a car, what features you need and how much you can realistically afford, it’s time to begin your search. It’s important to find a car that meets all your needs, but it’s equally important to spend time to find the right car. Buying the first car that fits your ideal description without doing some added research can backfire. Chesrown explained an important question many people don’t think to ask is about tires. The tires are typically one of the first things that need to be changed on a car, so it’s good to know how soon you’ll need to buy them. Tires aren’t cheap, so the newer the tires, the better. Ask how deep the tire tread is. This is a good indicator of what kind of shape they’re in. If the treads are below 3/32 of an inch, the tires need to be replaced; they aren’t safe to drive on. If they are 4/32 or 5/32, they are about halfway through their life span. It’s also important to know about the car’s history as well as the title’s history. An AutoCheck report or CARFAX will detail any accidents or other issues the car has had. They may signal the vehicle isn’t as safe as you’d like, or they could show you that you might be able to get a lower price. It’s also important to double-check to make sure everything works, including: Door locks Windows Radio and speakers Lights – interior and exterior Windshield wipers A car can be a difficult purchase, especially for a first-time car buyer. However, asking yourself and the salesperson the right questions will help you make the right purchase. We are here to help in any way we can so please don't hesitate to ask questions!

CARFAX Reports

When it comes to a car’s condition, we often mention the Carfax report. A Carfax report is your window into a car’s past. Like a private eye, it gleans cues from insurance companies, DMVs, and even the police to tell you about a car’s background. In the most extreme cases, it can save you from buying a lemon. Since it can be so helpful, we include a full free Carfax report for every car we list on Shift. How it works A Carfax report is essentially a data snapshot of a number of different available data records. It gathers information from police departments, insurance companies, DMVs, and auction houses to piece together a history on nearly every car out there. Their data-gathering team in Virginia adds about 3.5 million records a day, with a compiled total of about 15 billion records. Why a Carfax report can be useful Big Lebowski car impoundThe records included in a Carfax report tell you things you wouldn’t know by just going for a test drive or having a mechanic inspect the car (things you should also do, by the way). A Carfax report is a little like a crystal ball that can give you a picture of a car’s past, such as: Odometer readings and repair history Number of past owners Any accidents reported by DMVs, insurance companies, or police departments Whether the car’s a lemon or been salvaged or junked Whether a car was ever used as a fleet vehicle, autos used by businesses and often subject to lots of abuse Lien and repossession history Emission inspection statuses Manufacturer recalls and buybacks All of this info lets you avoid getting scammed and helps you make a more informed decision about the car you’re about to buy. Where does all that data come from? Carfax must have an army of data crawlers trolling the internet because the company culls data from about 92,000 sources—everything from motor vehicle agencies, to many police and fire departments, collision repair facilities, and auto auctions (Shift uploads all of our diagnostic and repair data to Carfax, too!) Here’s their list of all of the sources: Fire departments Manufacturers Law enforcement agencies U.S. motor vehicle agencies Canadian provincial motor vehicle agencies Auto auctions and salvage auctions Collision repair facilities Service/maintenance facilities Insurance companies Automotive recyclers Rental/fleet vehicle companies State inspection stations Extended warranty companies Car dealerships Import/export companies Here at Akron Select all of our vehicles come with a complimentary CARFAX report!

Is KBB Accurate?

Recently I had a client ask me about Kelly Blue Book and if it should be considered the best way to determine the price on a used car. In other words, can I expect to pay what the “book” says? And if I am selling my car, is it best to look up the value on my car, and price it according to the price guide without doing any further research? Is Kelly Blue Book accurate? The short answer is no. Let me explain what goes into these price guidelines. Dealers use Kelly Blue Book to establish the value of trade-ins as well as comparing numbers to set their lot prices. Private sellers use it as the bible in selling their personal cars. It is by far the most popular and, dare I say, “trusted” guide.images51XSAY3G The misconception about KBB is that they are “setting” prices. This is not true. They are actually in the business of “tracking” prices. It really comes down supply and demand and KBB is simply following the trail. Sometimes it takes a while for the information to get to KBB and reported in their pricing charts. In order to post prices they use an algorithm that takes prices posted on Autotrader which is the most widely used car selling site on the internet (and owned by KBB). They also derive sale prices from major weekly auto auctions. By having such a broad band of information to pull from, KBB has indeed positioned itself as the most accurate and authoritative evaluation price guide whose numbers compare favorably with the real world. However there are problems with any price guides. For instance prices started to cave-in on big gas guzzling SUV’s about year 2008 due to low demand. KBB eventually got that into their price guides, but it took a while and the guide was misleading while that data made its way through the pipeline. Conversely the price will also be skewed with high demand vehicles. For instance, if I pull up a Private Party 1998 Toyota Camry with 100,000 miles in excellent condition, KBB has the Camry priced at $3,123 (at the time of this writing). You would be hard pressed to find one being sold by a private party for that little unless someone was foolish enough to follow the guide. Real world price on a car such as that is easily $4000-$5,000, much more than than what the good book says. The reason? Demand, and plenty of it. As a side note Edmunds.com has that same car in “outstanding condition” at a ridiculous $2,835. If I sold a Camry for a client according to those prices I would need to get a new cell phone plan due to a explosion of incoming calls, and I would be guilty of not doing my homework. If I bought a Camry for a client according to those prices I would be getting the bargain of the year (and an outstanding car). At the moment, and for the past couple years, there has been much more demand for used cars. As a result of the economic down turn people are looking for good quality used cars as opposed to new. Add to that the ever increasing quality of cars (mainly from Japan and Korea) which has made the used car option more reasonable than ever. The result has been an amped up demand and Kelley Blue Book is trying to track that uptick. Sometimes they lag behind, especially on older models. Keep in mind that the older the model, the broader the differences between Excellent and Fair. The older a car model, the fewer there will be in “Excellent” condition (supply). This in turn drives up the price (demand). That’s tricky to keep track of. So what is the best way to go about evaluating the price on a car? What is the best guide to help you determine fair pricing? There are three main guides that one can refer to: KBB, Edmunds.com and NADA.com. All of them use different algorithms but the best way is to check all three and then check online for similar vehicles for sale. Dealers will often have the best knowledge about the law of supply and demand (their profit margins depend on that). That will give you a good solid overview. If there is a discrepancy, then figure out why that is. It takes a bit of digging but you will find the sweet spot for your purchase or sale price. If you are selling your car and the phone does not ring then you have it priced too high. If it rings off the hook you have it priced too low. If you are buying a car and you are wondering what you should pay, you can use KBB as a guide. But keep in mind this: People who are selling their cars view the condition of their own cars rather optimistically. Like a bad marriage there is so much emotional attachment they overlook the obvious. It is very rare to see a car that ranks higher than what people think their car condition ranks. Most people rank their cars as “excellent” no matter what the condition. Indeed beauty is in the eyes of the beholder. Therefore it is you, the informed buyer, that needs to educate the seller by having the very definitions of Excellent/ very good/ good/ fair on hand printed out from the KBB site. Quote it verbatim and see if you can knock some sense into them. Of course if the seller has numerous calls on the car and people are lining up behind you to buy it, well your pleas will fall on deaf ears. So, in summary, KBB and Edmunds are just guides. They are not the be all and end all. Whatever the market will bear is what the prices will be. In the end it is all about the quality of the car rather than the quality of the price. Pay the premium and look for excellence, even if you are paying above Blue Book. You can get a good deal on a bad car all day long. The trick is to get a fair deal on a great car. After all, the bitterness of poor quality remains long after the sweetness of low price is forgotten.

What is GAP Insurance?

What is gap insurance? Gap insurance is one of the most sold "back end" items in the finance office at car dealerships. So what exactly is gap insurance? When you buy a car, you also get insurance on that car (hopefully). When you buy insurance you are insuring that specific vehicle, not a set dollar amount. That's an important distinction. If your car is worth $15,000, you paid $14,000 but financed your taxes, fees and had negative equity you could easily be financing $19,000 or more. If your in an accident your insurance company will only pay the $15,000 your car is worth. Some people have a hard time understanding why their insurance company won't pay all the insurance. An agent in Las Vegas put it in a very clear way for me once. If your car is worth $15,000, you put down $10,000 and are only financing $6,000 how much would you want back if your car was in an accident? What you owe or what the vehicle is worth? Obviously you want what its worth, and it works both ways. Now that you understand this, where does gap come in? GAP or guaranteed asset protection, is an insurance policy that is made to cover that deficiency or "gap" in coverage. So, do you need GAP? Yes and no. If you pay cash, have a large down payment, a free and clear trade worth a few thousand or more, you may not need it. If your credit isn't great and you have a high interest rate, your carrying negative equity over from a trade in, or your buying with no, or low, money down you probably do. For the sake of this article lets assume you understand gap now, and have decided you need it. So, where can you buy GAP at? You can get gap insurance from your insurance company, online or from dealerships themselves. My advice is to go with someone other than your insurance company. The reason is that most aftermarket gap companies also cover your deductible while your insurance company will not. That leaves dealerships and online companies, both are very similar and usually from the same underwriting company so there is no large difference I'm aware of. Now that you've found where to get it, how much should you pay? GAP insurance cost usually varies by the term of your loan, the longer the term the higher risk and cost. Most GAP policies are now state controlled since they are an insurance item and because of this their prices are controlled as well. In Las Vegas and all of Nevada, gap is set between $200-$500 dollars depending on the terms. Watch out for dealers that try and bundle gap with a much more expensive package implying that its the only way you can get it. Now that you understand gap you should have a good idea if you need it or not, where to buy it and how much to pay

7 Tips for Winterizing Your Car

Winterizing your car before the cold weather sets in should be a priority right now. Your car will be pushed to the limit with cold temperatures, snow, ice, road salt and freezing rain. It pays to prepare your car so you are not left out in the cold. 1/ Radiator Coolant Flush Coolant in your radiator is known of course for keeping your engine cool in the summertime. However it also plays a vital role in protecting your engine block during freezing temperatures. Frozen coolant can expand inside the engine block and destroy it. That is why coolant is often described as “Anti-Freeze”. A coolant flush can easily be added to the “to do” list when you get your next oil change. 2/ Have Your Battery Checked battery picGetting stranded in the cold weather with a dead battery is no fun, and can easily be avoided. The typical life span of a battery is between 3-5 years. Your battery will need extra muscle to start the engine through the cold mornings and will be tested to its limits. If your battery is over three years old you will want to have it checked for the winter months. A good indication that the battery is getting weak is when it starts to sound sluggish during cold start up. But why wait for your battery to be in the death throes? Any garage can perform a simple test for battery strength. 3/ Wax Your Car A good coat of wax goes a long way in helping to protect your cars finish over the winter. Even if you have a garage, the paint on your car will still be subjected to a variety of harsh conditions when you drive. The best time to have it done is in the fall before the cold sets in. 4/ Make sure you have Correct Tires Do not underestimate the importance of good traction in areas of snow and ice. Tires are rated for Summer, Winter and All-Season. Make sure that the tires that you have on your car are appropriate for the weather conditions that you will encounter. Check to make sure your tires – including the spare – are properly inflated. If you live in a harsh snow environment or mountainous area you will want to have a set of chains in your trunk. 5/ Carry the Winter Essentials A good ice scraper could be your best friend on a cold frosty morning. Also be sure to carry a flashlight with fresh batteries, a warm blanket and a pair of gloves. These items are priceless when you need them most. Battery jumper cables will come in handy to help someone who’s stranded because they did not read this article. Below is a diagram on how to properly jump-start a car. 6/ Fill the Windshield Washer Fluid Reservoir and Check Wipers Your windshield wipers will be seeing double duty during the winter. Top off the fluid and make sure you have a set of good blades on your car. Most car parts stores will be happy to assist you in doing that for you, usually at no charge. 7/ Keep Your Gas Tank Full A gas tank that is nearly empty could result in condensation forming on the inside walls of the gas tank. Fluctuating winter temperatures can result in water getting inside the tank. It’s never a good idea to run your tank to near-empty any time of the year because you run the risk of getting stranded. However the damage with a near-empty tank during winter could result in starting and running problems.
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