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Category Archives: Car Buying

Should you pay for your teen’s first car?

It seems like only yesterday that your son or daughter was taking his or her first steps and now is ready to drive. A certain trepidation is likely to be mixed in with your pride in your child’s increasing independence.

Image: Lars Plougman

While your teenager is eagerly anticipating getting her first car, you have totted up the costs involved and realized that this could add thousands of dollars a year to family expenses. A big chunk of those extra costs come from the fact that teen drivers tend to have more accidents, and are so more expensive to insure; another worrying factor.

Most teenagers aren’t going to be able to cover costs by themselves, so how should you handle getting your teenager’s first car, and how much should you contribute?

Do they need a car?

Just because your child has passed driver’s ed and got his license, or even if all his friends have a car, that doesn’t automatically mean he needs a car at 16.

Look at your family’s circumstances before you commit to adding another car to the household. If you live in an urban area it might be cheaper for your child to continue using public transport, or if your children need a car only occasionally, insuring them to drive a family car might be a better option.

Ask teens to contribute a certain amount to the ongoing costs of maintaining a car, as this will make them appreciate the financial trade offs, since they may have to sacrifice other spending. This in itself can be a useful lesson in managing money.

Choosing a car

Your teen might dream of an SUV or convertible, but the safest cars for new drivers are mid-size sedans with at least six airbags, a four cylinder engine and a high safety rating.

This is where contributing a chunk of the down payment comes in useful, as it gives you considerable clout when it comes to making sure that your child has a car that’s safe and appropriate.

It might be tempting to surprise teens with a car and see the delighted reaction, but getting them involved in the process gives them a chance to learn how to buy a car and what scams to look out for, setting good car shopping habits early on.

Plan in advance and ask your child to save money from summer jobs and gift money towards the cost of the car, perhaps offering to match them dollar for dollar. If they’ve saved their own hard-earned cash and decided they want a car more than the latest pair of sneakers, they’re likely to take good care of that car.

Insurance

For teenage drivers insurance is easily the highest expense behind running a car. If your teen is still at high school, he or she is probably not going to be able to cover the premiums themselves.

Get your child to contribute to a portion of your increased insurance premium, even if it’s as little as 10 or 20%. Contributing helps teens understand the responsibilities that come with owning a vehicle and gets them used to the real cost of running a car.

As they’ll end up paying more if they are involved in an accident, this rewards responsible driving too.

On the plus side, getting car insurance might encourage your teen to keep her grades up. Many insurance companies offer discounts to students with a B grade average or higher, presumably on the basis that these students are likely to be as responsible on the road as they are at school.

If insurance is prohibitive, consider delaying purchasing a car as rates decline rapidly for drivers between 17 and 19. That extra year or two could give your child the chance to save more money towards their car too.

Image: Dana

Maintenance

Skimping on maintenance is a false economy, so you want to ensure that you agree on who is covering this. Teaching teenagers how to do the basics themselves saves money while giving them useful life skills.

Repairs

Before your child hits the road in their car, decide on who pays for repairs. Say that you’ll cover a percentage of standard repairs but that your child will have to foot the whole bill if he or she is at fault to create a strong incentive for responsible driving.

If your teen’s income is sufficient, ask your teen to set aside a certain amount of money for automotive ‘rainy days,’ to enable dipping into this fund when necessary. It might seem tough, but it’s better to learn to plan for these expenses at age 16 than in your twenties.

Tickets

It’s a no-brainer that if your teen gets a ticket, he or she should cover it themselves. As with at-fault accidents, even if you have to meet the initial expense and get them to pay you back, it’s vital that they learn that dangerous or irresponsible driving has consequences.

You might also decide to reward positive driving behavior, for example, allowing them more freedom after a year without tickets or accidents.

Our final thoughts? While you don’t want your child working so many hours to afford their car costs that they compromise school work and extra-curricular activities, having a bit of skin in the game creates a valuable stepping stone to adulthood and encourages responsibility.

What have your own experiences been like? We welcome your comments!

CARFAX Makes Car Shopping a Breeze

How we shop for used cars online has remained the same for years, no matter what used car listing website you tried. Typically, you plug in a make/model to get a list of every one of those cars for sale within a set area. The next step is the one that can be time consuming for car shoppers: finding the answers about a given vehicle’s history often involves a lot of clicking, searching, and backtracking through the list.

In contrast, the new CARFAX Used Car Listings makes finding the right car with the history that’s right for you fast and easy. It’s a breeze. Only Carfax lets you search for your dream car by starting with CARFAX history. You can drive your search by what is important to you:

  • No Accidents Reported to CARFAX
  • Service Records
  • CARFAX 1-Owner, and more.

You just have to enter your zip code and can pre-select the CARFAX vehicle history attributes you want the cars to have:

Click the ‘Show Me Now’ button and up comes a list of vehicles that exactly match your search criteria, both the kind of car you want and the vehicle history you chose. The cars that closely match your criteria are listed below the exact matches. Every car comes with a free CARFAX Vehicle History Report so you’ll know everything that was reported to CARFAX.

There are no annoying banner ads, pop-ups or other distractions. You’re saving tons of time already!

From here, you can quickly sort and narrow the results by price range, color, trim, distance and more. If you’re looking for a used car that comes with some new car benefits, opt to see only Certified Pre-Owned cars. If you want a car that’s been well-maintained, look for the “regular oil changes” badge. Or, check “compare” to see multiple cars side-by-side to help make your decision. It’s that simple…

On the details page for each car, you’ll find easy ways to contact the selling dealer. You can even click through to the car on the dealer’s website if you want. There are typically lots of photos, a description of the car and a snapshot of important CARFAX information for it. Plus, you can click to see all the information reported to CARFAX in the free CARFAX Vehicle History Report. Just click on the big green button.

CARFAX has made it easy, fast, and satisfying to search for a car from your phone, tablet, laptop, or desktop. CARFAX president Dick Raines sums it up best: “Millions of online shoppers today click on readily available CARFAX Reports to see if the cars they want have a history that meets their needs. Now, consumers can know right away by choosing which history details are most important to them at the beginning of their search. CARFAX puts the right cars with the right history right in front of you.”

Read more about CARFAX Used Car Listings in the press release announcement of the launch.

 

The ABCs of Buying a CPO


If you’re in the market for a used vehicle, you’ve probably heard the acronym CPO several times. CPO stands for certified pre-owned, which is simply a used car that is usually less than 5 years-old, has been inspected, repaired if necessary, and issued an extended warranty. A CPO vehicle offers a car owner peace of mind knowing that their vehicle is in great condition, and they have an extended warrantee should anything go wrong. However, the three little letters tacked on the end of a used car can be a pricey way to buy some peace of mind.

A CPO vehicle is not the best route for everyone, but for some it can be the answer.

When is a CPO Right for You?

Those that will particularly benefit from buying a CPO vehicle are those that want the perks of buying a new car, but without the steep prices. Those that are willing to pay for some peace of mind, rather than taking a risk should also look into buying a CPO. A certified car comes with no surprises, and the warranty will stave off any near future problems as well.

New cars depreciate by thousands of dollars the moment they are driven off the lot, but by buying a CPO you avoid these prices and still get the warranty and good condition of a brand new car.  Bear in mind if you are looking for a specific make and model, it may be difficult to find it. CPOs vehicles are not available by the masses, and you may not find the exact car you are looking for without driving quite a ways.

The Perks

Because a CPO vehicle is more expensive than a regular used-car, dealers offer many incentives to seal the deal.

  • Warranty: One of the main reasons buyers decide to go with a CPO is because of the extended warranty. Sometimes an extra $1000-$2000 for a warranty can save you much more.
  • Buyback/exchange program: A buyback option can remove the stress or hesitation with buying. You can try out the vehicle stress-free, and if you don’t like it, there are problems or you change your mind you can exchange the vehicle.
  • Vehicle inspection and certification: Every CPO vehicle is inspected and is certified
  • Factory financing and incentives: Because CPO vehicles, while still less expensive than a brand new car, can be pricy many automakers will offer special financing rates or sometimes even a cash incentive
  • Roadside assistance: CPO buyers often get the extra benefit of roadside assistance. The assurance of roadside assistance in the event of an emergency promises even more peace of mind.

What does “Certified” Mean?

Certified means it has been inspected, any issues have been resolved and your vehicle has been given a stamp of approval. However, each manufacturer has their own definition of “certified.”  Not each manufacturer inspects the same things. Make it a point to understand their definition and get the details in writing, you don’t want to be surprised later on.

Factory-backed versus Dealer-backed Warranties 

Not all warranties are created equal. There are CPO factory-backed programs, and there CPO dealer-backed programs. The most desirable warranty to have is a factory-backed warranty. If your vehicle has a factory-backed warranty you can go to any dealership that is connected with that factory and they will honor the warranty. With a dealer-backed warranty you have to return to the original dealer, which can be a pain, to have your warranty honored.

On a note of caution, make sure you read the fine print of your warranty; you’ll want to know exactly what the warranty covers and what it doesn’t cover. However, you must also realize that no warranty is all-inclusive. Some warranties even require that you pay a deductible. In other words, make sure you know exactly what you are getting.

How Much Does Certification Cost You? 

In the previously-owned vehicle market, peace of mind can certainly be bought, as long as you’re willing to foot the bill.

The additional cost ranges from 2 to 8 percent of the original cost of the used-car.  The difference in percentages depends on the model and brands of the car, obviously the higher-end the car, the higher the percentage. A lot of buyers who choose a CPO vehicle are those looking to buy a high-end car or sports car. A CPO is definitely a more cost-efficient way to get that high-end sports car you’ve always wanted, without the high-end cost.  CNW Marketing Research tells us that on average, luxury buyers will spend $2,100-$3,400 more for their CPO vehicle than those that purchase non-certified pre-owned luxury vehicles. The margin is much lower for non-luxury vehicles. Non-luxury CPO buyers will spend $300-$1,750 more their vehicle than those purchase non-certified vehicles.

Do Your Homework and Come Prepared to Bargain

Don’t go to a dealership ready to buy a CPO vehicle without doing your homework. Doing your homework will help you ask the right questions, such as: Who is certifying the vehicle? How much more are you paying than your non CPO buying counterparts? What comes with the certification? Who inspected the vehicle? Was anything found wrong and was it fixed?

If you feel like the dealer is trying to charge you too much for the certification, bargain with them to lower the price or include more in the certification to compensate. Just because it has a price tag doesn’t mean it can’t be altered. And make sure that the dealer gives you a CARFAX report; you can never be too sure.

Odometer Rollback Infographic

For those of you worried about odometer fraud, use our Free Odometer Rollback Check to be sure the car you’re about to buy has the correct mileage. You can also follow these tips to avoid purchasing a rolled-back vehicle:

  • Check that the car’s wear and tear is consistent with the odometer reading.
  • Ask the seller for service records and note the mileage on them.
  • Buy from a recommended dealership or trusted seller.
  • Be wary of “too good to be true” deals or overly-aggressive sellers who want a quick sale.
  • Get a CARFAX Vehicle History Report from the seller or at CARFAX.com.
  • Have a trusted mechanic thoroughly inspect the vehicle and check its computer.

What to do about a rolled back odometer

Odometer fraud is a major problem for consumers and happens in every state. So, what do you do if you’re a victim of this scam?

Unfortunately, many people who unknowingly buy a rolled-back car don’t know who they should report it to or contact an agency that’s unable to help them. So who do you call? Local police? State Attorney General’s office? The reality is that the agency designated to handle and investigate odometer rollback cases differs from state to state.

If you’ve bought a car with an odometer rollback, here’s a link to the agency in your state to contact for help:

Alabama
http://www.ago.state.al.us

Alaska
http://www.law.state.ak.us

Arizona
http://www.azag.gov/

Arkansas
http://gotyourbackarkansas.org/complaints/file-a-complaint-with-us/

California
http://www.dmv.ca.gov/consumer/invest/inv172.htm

Colorado
http://www.coloradoattorneygeneral.gov/

Connecticut
http://www.ct.gov/dcp/cwp/view.asp?a=1629&q=430712

Delaware
http://attorneygeneral.delaware.gov/

District of Columbia
http://dmv.dc.gov/main.shtm

Florida
http://www.fhp.state.fl.us/html/warnings/odometer.html

Georgia
http://consumer.georgia.gov/consumer-topics/filing-a-complaint

Hawaii
http://hawaii.gov/ag/

Idaho
http://www.ag.idaho.gov/

Illinois
http://www.cyberdriveillinois.com/publications/pdf_publications/sos_dop123.pdf

Indiana
http://iot.custhelp.com/app/answers/detail/a_id/1391

Iowa
http://www.iowa.gov/government/ag/consumer_advisories/auto/odometer_fraud.html

Kansas
http://ag.ks.gov/about-the-office/contact-us/file-a-complaint

Kentucky
http://ag.ky.gov/civil/consumerprotection/complaints/Pages/default.aspx

Louisiana
http://www.ag.state.la.us/Article.aspx?articleID=37&catID=0

Maine
http://www.maine.gov/sos/bmv/investigations/index.html

Maryland
http://www.mva.maryland.gov/Resources/CS-113.pdf

Massachusetts
http://www.mass.gov/ago/bureaus/public-protection-and-advocacy/the-consumer-protection-division/

Michigan
http://www.michigan.gov/ag

Minnesota
http://www.ag.state.mn.us/Consumer/Cars/MNCarLaws/Default.asp

Mississippi
http://www.ago.state.ms.us

Missouri
http://ago.mo.gov/

Montana
http://doj.mt.gov/

Nebraska
https://statepatrol.nebraska.gov/odometertampering.aspx

Nevada
http://www.dmvnv.com/pdfforms/ced020.pdf

New Hampshire
http://doj.nh.gov/consumer/sourcebook/autos-used.htm

New Jersey
http://www.njsp.org/divorg/invest/auto-unit.html

New Mexico
http://www.mvd.newmexico.gov/Drivers/Pages/Fraud.aspx

New York
http://www.nyc.gov/html/nypd/html/home/contact_information.shtml

North Carolina
http://www.ncdot.gov/dmv/licensetheft/

North Dakota
http://www.ag.state.nd.us/

Ohio
http://bmv.ohio.gov/odometer_tampering.stm

Oklahoma
http://www.oag.state.ok.us

Oregon
http://www.oregon.gov/ODOT/DMV/pages/contact_us.aspx

Pennsylvania
http://www.dmv.state.pa.us/identity_theft/reporting_fraud.shtml#steps

Rhode Island
http://www.riag.ri.gov/civil/consumer/

South Carolina
http://www.scattorneygeneral.org

South Dakota
http://atg.sd.gov/

Tennessee
http://www.tn.gov/safety/CID.shtml

Texas
http://www.oag.state.tx.us

Utah
http://tax.utah.gov/forms/current/tc-451.pdf

Vermont
http://dmv.vermont.gov/safety/enforcementdivisioncontacts/overview

Virginia
http://www.dmv.virginia.gov/general/#zerofraud/index.asp

Washington
http://www.dol.wa.gov/vehicleregistration/fraud.html

West Virginia
http://www.wvago.gov/

Wisconsin
http://www.dot.wisconsin.gov/safety/consumer/rights/odometer.htm

Wyoming
http://attorneygeneral.state.wy.us

Flooded Cars on the Road in 2013 – An Infographic

There are over 212,000 cars on the road today in the US that have reported flood damage. Two thirds of flooded cars (133,173) can be found in just 10 states.

  • Texas currently has over 30,000 flood vehicles–more than any other state.
  • Next up is New Jersey with more than 28,600
  • Pennsylvania has more than 13,000 flooded cars
  • Kentucky, Louisiana, New York, Illinois have more than 9,000 each
  • Florida has 8,800
  • Mississippi and Virginia round out the top 10 with more than 7,000 of flooded cars in operation

Tips for spotting a flooded car:

  • Check hardware for silt, mud or rust in the trunk, glove compartment, dashboard, or below the seats.
  • Look for loosely-fitting and discolored upholstery and carpeting. Check to see if anything doesn’t match or is loose, which may indicate that carpeting or cloth has been replaced.
  • Water can short out electrical connections. Test the windshield wipers, turn signal lights, break lights, radio, internal lights, heater and air-conditioner to be sure they work.
  • Check for warning lights to make sure ABS and airbag lights turn on.
  • Smell for a musty odor in the interior or the trunk.
  • Flex the wires beneath dashboard to see if they’re brittle or cracked from drying out.
  • Get an inspection from a trusted mechanic BEFORE you hand over money. A car is a big investment, so it’s worth this modest expense.
  • Check for flood damaged cars for FREE at flood.carfax.com

Hurricane Sandy in 2012 left more than a quarter million flooded cars on the East Coast. Still, Hurricanes Katrina, Rita, and Wilma resulted in an incredible 600,000 flooded cars in their wake.

infographic on flood damaged cars for 2012

 

A CARFAX customer wrote us to say:

“My parents got burned last year by purchasing a used car they did not know was flooded. The car looked immaculalte and had no signs of flood until the electrical system and transmission failed. This was a horrible experience and cost my parents a lot of money.” Rich C., Virginia