Episode 6--Everything You Need to Know About Owning a Car

 

 

Don’t buy a car until you watch this

 

Everything you need to know in one minute:

 

1. You are in control of the buying process as long as you are willing to back out of the deal.  Be prepared for the salesman to do something you don’t expect, such as adding extra charges. 
2. It is never too late to back out until you sign the papers.
3. Do your research.  Know what the car should be selling for.
4. A car is very expensive.  Give it the maintenance it needs.
5. If you are buying a used car, have a reputable mechanic look at it before you buy.

 

One of the biggest financial decisions an American will make is when they buy a car.  A new car can be very expensive, and for that reason there is a lot that one needs to know.

The first step in the process is determine what kind of car is actually needed, from a small 4 door sedan or a 2-door coupe to a sports utility vehicle (SUV), a pickup truck, or a minivan.  Most passenger cars seat up to five people, whereas a pickup truck may seat two or three people.  For a large family a minivan may make the most sense, with possible seating up to seven people.  Thus, a minivan may cost more but be much more practical. On the other hand, if a person is going to be self-employed, or if they are likely to do a lot of household projects, then a pickup truck may make the most sense because it will allow them to transport tools and materials. 

Purchasing a car requires a lot of time and thought. It is easy to get “car buying fever” and want to buy one immediately.  You want a new shiny car like you see other people driving.  You start looking at cars, and you see one that you really like.  You go to the car lot, and the salesperson wants to sell you one right then.  That’s their job, and they know how to do it.  They will pressure you to decide right then.  They may ask, “What will it take for you to drive home with this car today?”, or “How much can you afford to spend on a monthly payment?”  It is a kind of honest manipulation.  But there is also dishonest manipulation that you have to look out for.  .

First, you need to do your research and make sure that you know which car is the best one for you.  If it is a used car, you can use the VIN number, the vehicle identification number, to learn about the vehicle’s history.  There are some cars that have been through floods or other types of major damage that the car salesman may not reveal to you.

No matter what a car advertisement says, that is not necessarily the price that you will pay. There are several ways that a dealership can increase the price unexpectedly.  In times when cars are in short supply they will try to put on a “dealer’s preparation fee” which can run to several hundred dollars. 

Three steps to being in control of the buying process::

            First, control your “car buying fever.” Try to lessen your desire to have the car right now.  Give yourself a few weeks to buy the car.

            Secondly, talk with more than one car dealership. 

            Thirdly, on the day that you are to sign the papers, call the salesman and confirm the sales price.  Ask what the final “out the door price” is going to be.  This can include various fees that you had not expected.  Ask if their sales manager has agreed to sell it at that price.  Be pleasant but firm.  Let the salesperson know that you absolutely expect that this out the door price will not be any different when you arrive.  If you are unsure of yourself, take a friend for moral support.

After you and the salesman agree on a price, you will be taken to another person who will get all of the financial paperwork together.  His job is to convince you to use a car loan from the dealership, or to sell you an extended warranty plan.  Learn about those ahead of time and decide before you go in whether you want one or not.  Generally, you can buy an extended warranty plan over the internet, which is less expensive.  Do not sign a blank sheet of paper or a document with empty spaces in it.

Many people try to circumvent car dealerships altogether by buying from an individual on the Internet. In such a case it is even more important to make sure that the car is evaluated by a reputable mechanic who can look for issues of previous accident damage, water damage, major  repairs, unusual repairs, and so on. There is a phrase in the English language of “Buyer beware.” What this means is at the buyer has to exercise caution because the seller may be trying to hide some major problem.  As just one single example, one person bought a car from a small car dealership in a small town and later found that the compressor for the air conditioner was not bolted on but was actually glued on with epoxy.  When it was time to change out the air compressor it was not possible to do so.

In order to determine what is a reasonable price to pay for the care one can consult what is called the Kelley Blue Book which can be located online. Sometimes an individual selling a car is willing to negotiate regarding the final price.

So there is an issue of being cautious about the price and an issue of being cautious about the condition of the car. Both are somewhat easier to deal with if the car is a new car. The condition of a new car is less likely to be damaged, and if a problem is discovered, there is usually a three-year warranty that would pay for repairs.  In terms of price, it is easier to do comparison shopping for a brand new car because an identical one is going to be available at some other dealership.

However, many people buy a used car rather than a new car because it is more affordable. There is some risk involved, but the affordability makes it attractive. At a time when new cars are selling for $25,000 to $50,000 and more, a good used car can sometimes still be found for $5000 or less.

Research at a local library can help you decide what type of older car to buy. With the help of the librarian or a friend who speaks and reads English, you can learn valuable information about which cars are least likely to break down. There are resources that can tell you which cars perform the best, get the best gas mileage, and require the least repairs.

Mistakes in buying a new car.

Being swayed by a rebate. Sometimes manufacturers offer money back on a car if the customer buys it before a certain date. Or the manufacturer may offer a lower interest rate to convince people to buy their cars quickly. If one is already planning on buying that car, this can be very good for the consumer. But it is a mistake to buy a car just because it has a rebate.

Letting one’s emotions get involved.  This can lead to buying on impulse on the same day that you test drive it. Make sure that you have a few days to think it over.

Choosing a dealer because they are close by.  Buying a car in a small town is often cheaper

Letting the car dealer start talking about a trade in too quickly.  If the dealer is able to get you to talk about the sales price of the car and the trade in price of your car at the same time, it can be very confusing. Negotiate the sales price of the new car first; then start talking about the trade in after that. If they do not offer you a reasonable trade in price be ready to walk away. Or be ready to sell your old car on your own.

Shopping and negotiating all by yourself if you are not experienced. There are good quality auto buying programs. For example, there are auto buying programs which will get you a good deal.  Or you can bring a friend or relative.

Another mistake is thinking that it's too late to walk away. It is not too late to stop the process until the paperwork is signed.  You don't have to agree to add on features to the car that you don't want. You can always walk away.

Letting the dealer determine who is going to finance your car.  Shop around for your auto loan.

Thinking that the sticker price is the actual price of the car. The sticker price is merely a suggestion. It is referred to as the MSRP, the “manufacturer’s suggested retail price.” This is the price that the dealer wants a naïve, uneducated buyer to pay. By doing your research you will have a much better idea of what people are actually paying for that same make and model of car.

Mistakes people make in buying a used car.

Buying a used car without doing your research.  A used car can be a very good investment if you know what you're doing.

Not test driving the car adequately. Make sure to thoroughly test drive the car. Also have anyone else who may drive the car test drive it and give their opinion. Make sure the car feels comfortable to you.  Make sure that it does not make unusual noises or drive in any unusual way.

Negotiating right away after test driving.  Instead, tell the salesman that you will be giving them a call to discuss the car if you're interested. The salesman will try to get you to buy the car that day. 

Buying a car based on its looks alone.  Also consider purchase price, safety, cost of maintenance and reliability.

Failing to run a vehicle history report.  There are several services, including Carfax, that you can use to check the history of the car based on its vehicle identification number.

Financing the car

Then there is the question of how to get a loan for the car.  Most people will need to borrow money.  This can be done through the dealership, but their rates are generally not the best available.  If the buyer has a bank or credit union they use, it is probably best to start by finding out their loan rates.  Other banks and credit unions can be consulted.   It's important to have thought this through before the deal is finalized.  In addition to choosing the lender ahead of time, there is also the question of whether to borrow over a time period of three years, four years, or five years.  The shorter the time period, the less interest you will pay.

After the purchase and loan paperwork is signed, the buyer owns the car, but it has a lien on it. The lien means that if the money is not paid on time the lender can take the car back and repossess it.  Payments which are late can lead to either late fees or repossession. The title papers for the car well show that you are the owner but that the car has a lien on it.. This is to prevent someone from selling a car that they don't totally own.

Usually there are monthly statements from the loan company indicating how much has been paid on the loan and how much remains to be paid.  Every month that you make a payment, you own more of the car.  Exactly how many dollars you deserve to get if you sell it or trade it in depends on how much the car will sell for minus the amount that you still owe the loan company. Be forewarned that if you fall behind on your payments for several months the loan company can repossess your car.

Within a certain length of time after buying a car there are more fees to be paid.. This is called the tax, title, and license.  In exchange the state gives the buyer a piece of paper showing that they own the title to the car.  It shows their name as owner of the car, any lender who holds a lien on it, and the vehicle identification number.  The VIN is stamped on certain places of the car to identify it if it is sold or stolen. A person is given a license plate to put on the car. When they drive home from the dealership the car license plate is usually just a paper license that is good for a limited period of time, such as a month. By the end of the month the metal license plate received from the state has to be affixed to the car.  Every year you will pay a certain amount to renew your car tag at an area tag agency.  When obtaining your tag you must show that you have liability insurance on the car.  You will be given a sticker for that year to attach to the mental license plate. These are the procedures in Oklahoma, but other states have similar regulations.

Maintaining a car

Given how expensive cars have become correct maintenance is important.  Maintenance saves money, makes the car safer, increases the lifetime of the car, makes it more enjoyable to drive, and saves gas. There is a saying in English “penny wise and pound foolish”. What this means is some people try to save a dollar but in the wrong way. There is no problem with saving a dollar, but if one tries to save money by delaying an oil change or driving on tires with very little tread this can result in damaging the car and costing more in the long run.

Exact maintenance requirements vary from make to make, but they generally include things such as oil changes, change of transmission fluid and filter at certain intervals and maintenance of the tires. There is also maintenance of various filters, changing light bulbs, and changing out wiper blades when the rubber becomes stiff or cracked. Maintenance of the paint job requires keeping the exterior clean. Vacuuming the interior of the car helps to keep the interior carpet from wearing through. Dirt particles can be very abrasive on the carpet fiber and cause it to wear out.

It is useful to have a relationship with a mechanic that you trust.  Most shops keep computer records which makes the owners record keeping easier.  A good mechanic will tell you when it is time for certain maintenance and will give you advice about the car.

The recommended frequency for oil changes is in the car owner’s manual.  It is typically every 3000 or 5000 miles.  It can also depend on driving conditions and whether the car is driven on long trips or short trips.  In addition, check the oil every thousand miles or so to make sure that it is not low.  Modern cars do a good job of signaling the driver on the dashboard when it is time for an oil change. Depending on the make and model of the car, transmission fluid changes and transmission filter changes must be done somewhere between 30,000 and 60,000 miles.

Then there is the issue of tire maintenance. Tires must be balanced, aligned, and rotated.To get the most even wear the tires need to be rotated to different wheels. A rotation needs to be done every 5000 to 8000 miles or sooner if there are signs of unusual wear on the tires.  Then there is the issue of keeping the correct pressure in tires.  An inexpensive pressure gauge needs to be kept in the car. The owners manual and a sticker on the inside of the door frame on the driver side will tell you how much pressure needs to be in the tires. Check the pressure once a month and before long trips. Do it when the tire is cool to the touch. Remove the valve cap and press the tire gauge in firmly. If you're not sure about the reading measure it twice.  Do this with each tire.  Underinflated tires can cause excessive wear but also can cause accidents. Tire tread is also something you must check out periodically. You will be evaluating the depth of the tread that is left on the tire.  One simple way to measure tread is to put a penny inside the groove.  If you can see the top of the head of President Lincoln there is too little tread.   You will know if the tire needs to be balanced because the car will vibrate.  You may not know if tires need alignment just by the feel of driving the car, but it will eventually cause damage to the bushings or other problems.  Check your tires every few months to see if they are wearing in some unusual way.

Maintaining a car also means having a covered parking space if possible. It is not always possible to have one. However, there is a danger in some parts of the country of hailstorms and even sandstorms.  Hail can cause very serious damage to a car making it worth thousands of dollars less.  Intense heat can also damage the interior of the car by fading the upholstery and weakening parts of the interior so that it begins to show wear and tear.

There is other maintenance that needs to be done as well. Some of this can be done by the owner and some needs to be done by a professional mechanic. Sometimes fuel and air filters can be changed by the owner. Headlights and taillights can sometimes be easily changed. Periodically check to make sure that you have windshield washing fluid in the reservoir.  Wash your car year-round.  If your city puts a lot of salt on streets for snow and ice, washing the car frequently during the winter can help prevent corrosion.

Do not ignore a warning light on your dashboard. To find out what that warning light means pull over to the side of the road and check the owner’s manual.  Call the dealership if you are uncertain about what to do. Some lights mean to get help soon.  Other lights mean that you need to stop driving right now.  If the car is overheating, it is best to stop driving right away and let the engine cool down.

Do not drive a car once a tire has become flat; it will run the tire and the wheel rim.

Getting gasoline

Generally you can use the least expensive gas at the pump.  Many cars are designed to run on a mixture of gasoline and alcohol.  This is called gasohol.  Read your car manual to know if your car will run on gasohol.  It is less expensive.  Green handles on pumps are diesel fuel; do not use them.  It is generally safe to use fuel from the black handle with the number 87 above it.

8 ways to save money on gas:

1.Fill up your tank on Monday or Friday as these days have the cheapest prices.

2. Find the best gas price near your home using a gas app on your phone.

3. Accelerate and stop slowly and coast to a stop whenever you can

4. Spend less time idling.  Turn off your car when you are waiting in a long line.

5. Combining trips can cut your gas costs in half because your car stays warmed up.

6. Keep tire pressure at recommended level.

7. Carpool with others whenever possible

8.Use cruise control on long highway trips where you don’t have any stop and go driving.

How to get a driver’s license in Oklahoma

The basic process in Oklahoma is to schedule an appointment online to apply for a learner’s permit at the Department of Public Safety.  You have to apply in person.  Bring two forms of identification.  During this appointment you will need to pass a vision test in English.  Make sure you know the English alphabet well so that you can read the eye chart.  There is a written test.  If that is passed, then you can go to a tag agency and pay $42.50 and get a learner’s permit.  A learner’s permit allows you to drive with an adult licensed driver in the front seat with you.  Return after 30 days for the driving test with a car and an insurance verification form for that car.    There is a fee of $42.50 again, and two forms of information are required to get the actual driver’s license. In the office it really helps if somebody with a good command of English is there because there's quite a bit of paperwork.  It is not unusual for an immigrant to have to take the tests more than once before they pass.  After the driving test the new driver gets a report indicating that they passed the test and qualify for a license.  That is taken to a tag agency, where another fee is paid. About two weeks later an official license is received in the mail.

Afghan immigrants sometimes choose to overcome the problem of the language barrier by taking a course through a company that provides drivers education.  For a fee of $450 the student is given 10 hours of classroom instruction and 6 hours of practical driving instruction.  Instead of going to take a written test at the Department of Public Safety, they are given a form indicating that they have passed the equivalent of the test.  They still have to go to DPS to apply for a learner’s permit.  After 30 days they can take the driving test at the driving school rather than going to DPS to take it.

Traffic laws are routinely enforced in the U.S.  It is important to know and follow traffic laws especially speed limits and stopping at stop signs and red lights.  If a police officer believes you have violated a traffic law, he will put on his red and blue flashing lights and follow closely behind you until you pull over and stop.  You should pull over as quickly as possible so that the officer doesn’t think you are trying to escape.  He will not pass you and get in front of your car.  It is vital that you act cooperatively and calmly when dealing with the officer. Some people wonder if the officer has the right to ask you to exit your car, and the answer is yes.

 

Insurance

Liability insurance is required by law for your car.  That way, if you are involved in an accident and the policeman says it was your fault, the other driver can get the money to fix his car from your insurance company.  If the driver or passenger is hurt, their medical bills will be paid by your insurance.  If you didn’t have liability insurance, you would have to pay for the damages out of your own pocket, and it could amount to many thousands of dollars.

You can also buy comprehensive insurance, which is more expensive than just liability insurance.  It will pay for your car to be repaired if it is damaged.  Comprehensive insurance will cover you if your car is stolen, in an accident, vandalized, or damaged by weather.  It is not required by law, but many people choose to have it.

When comparing policies from different companies, consider the premium (how much you will pay each month), the deductible (how much you will have to pay on a repair before the insurance pays anything), and exclusions (what the insurance will not cover).

Keeping the car safe

Keeping the car safe can include keeping it safe from vandalism and safe from theft. There is a distinct advantage in having a garage in which you can park your car. Theft can occur by someone breaking windows and taking things from inside the car.  It can also involve stripping the catalytic converter off the car. It is never wise to leave expensive items in your car where they can be seen and encourage someone to break in.

The car emergency kit

Keep an emergency kit in your car.  This will be important if your car breaks down and you are stranded.  It could include some food and water. A first aid kit can be useful.  It can include bandages from minor cuts and antibiotic ointment. Medications can be helpful if a member of the family has a life and death need for medication. Equipment for cars could include a crescent wrench and screwdrivers.  Electrical items could include a battery powered radio, a flashlight, extra batteries, and a cell phone charger.  You might want to include a small amount of cash. A flare can be useful if you ever need to draw attention to yourself or are broken down on the road and need other drivers to avoid you.  You might want to have a gas can with some gasoline in it. Jumper cables are a standard emergency item, and some people include a tow line.