Howard Clark - Get Clark Smart

The most difficult calls I take on my radio show involve cars. We call them razor blade calls, which means the situation is awfully bad. A typical call involves someone whos recently purchased a used car, sometimes for several thousand dollars, only to find it is riddled with problems. Theyre faced with impossible choices. The vehicle often cant be repaired properly, and the dealer wont take it back. That could mean scrapping it, absorbing an expensive loss, and trying again.

Its even worse if the buyer is making car payments on a useless vehicle. These situations are very sad, because in many cases nothing can be done to help the caller. Its simply too late.

What I hope to do is educate you so that you can avoid the most common mistakes, and at the same time buy a car more effectively, with less stress, and probably get a better deal than you ever have before.

I want to teach you the right way to buy a new car or a used car, finance that purchase, and get it fixed if something goes wrong.

There are a lot of tools available today to help you buy a car. Unfortunately, most people dont take advantage of them, because they get caught up in the emotion of buying. If money matters to you, put that emotion aside and be smart about your car purchase.

The first thing to do is to prequalify for a car loan, so youll know how much car you can afford and what type of monthly payment you will have to budget. It also means your purchase wont collapse because you cant get financing. The best place to prequalify is at a credit union, because theyre cheapercredit unions usually will offer car loans at 1.5 percentage points below what a bank will charge. If youre not a credit union member, check www.cuna.org, to see if theres a credit union you can join. Or try online lenders such as www.eloan.com, whose rates usually will be at least a full point below those of a traditional bank. But even if you prequalify at a bank, thats better than just walking into a dealership and trying to get financing there.

Once your financing is set up, decide what kind of car you want. One of the best times to look at cars is when a dealership is closed, so theres no salesperson there to pressure you. It may sound strange, but a shopping mall parking lot also is a good place to look at a lot of different vehicles. Just dont act like youre trying to steal someones car.

Everyone wants a car that will run dependably and stay out of the repair shop. The best way to improve your odds of getting a trouble-free car is to check out the repair records of the models you like. Consumer Reports magazine is the best place to find repair data on cars. Each year, the magazines April issue is devoted to car buying, and it contains detailed ratings and data on a variety of models for several model years. Consumers Union, which publishes Consumer Reports, also publishes a car-buying guide that is available year-round in bookstores. Consumer Reports is available online for a monthly fee at www.consumerreports.org.

Of course, no repair data is available on newly introduced models. I dont recommend buying a new or radically redesigned model, because if you do, you are the guinea pig for any problems the vehicle might have. After a few model years, you have a better idea if a car is well-made and worth purchasing.

Once youve narrowed your search to a couple of different models, call your insurance agent to find out how much it would cost to insure those vehicles. There may be a significant difference between your choices, even between two versions of the same model. The size of the cars engines, for example, could be one reason for a cost difference.

Become familiar with the various versions of a car. The Honda Accord, for example, might come in DX, LX, EX, and SE versions. Each version comes with a different package of options and standard equipment. The most expensive version of the car will cost several thousand dollars more than the least expensive version. Its to your advantage to buy the least expensive version of the model that meets your needs. Thats because, over time, the value of those two vehicles converges. An initial gap of $8,000 between the cheapest and most expensive versions might dwindle to $1,000 in the resale value of the two cars after a few years of ownership. If you buy the most expensive version, you pay a higher price both up front and at resale time.