Tuesday, September 21, 2010

Vroom Vroom

We all love the thrill of owning a new car and smelling that new car smell every time you open the door. But do you know what it takes to get a good deal on a new car? First, do your homework.  Research different cars, their features, safety ratings, and costs associated with them such as gas mileage, repair costs and the cost of insurance. There are several sources for your research such as Consumer Reports, National Highway Traffic Safety Administration; Insurance Institute for Highway Safety; Jack Gillis’ Car Buying book; Edmunds—all of these resources have great information on their websites. Be sure to find out the price the vehicle cost the dealer. Next, check out the dealer where you are thinking of shopping—call the local BBB and consumer protection offices to check the dealer’s complaint record.

Once you have identified the car you want and a reputable dealer, go take a test drive and be sure this is the car you want. I’m a firm believer that you should love whatever car you drive—although I have driven many a car because it was what I could afford (first car—1960ish Ford Galaxy) or because it was what I needed at the time (station wagon). When discussing price with the salesperson, be sure to ask if there are any rebates or incentives in effect.

If you decide to finance your car, be aware that the financing obtained by the dealer, even if the dealer contacts lenders on your behalf may not be the best deal you can get. Contact lenders directly. Compare the financing they offer you with the financing the dealer offers you. Because offers vary, shop around for the best deal, comparing the annual percentage rate (APR) and the length of the loan. When negotiating to finance a car, be wary of focusing only on the monthly payment. The total amount you will pay depends on the price of the car you negotiate, the interest rate and the length of the loan.

If you are thinking of leasing a new car, be sure to understand all the terms and conditions. How many miles are covered under the lease—what is the price per mile if you go over that amount? Is there any amount due at the end of the lease? What are the early termination costs?

Be sure to inspect the car carefully before leaving the lot, looking for signs of any damage or excessive wear/tear. It is not a good idea to pick up a car at night when the light is limited.

Before you sign a contract to purchase or finance the car, consider the terms of the financing and evaluate whether it is affordable. Before you drive off the lot, be sure to have a copy of the contract that both you and the dealer have signed and be sure that all blanks are filled in. In general, there is no cooling off period for a new car purchase.

Saturday, September 11, 2010

But It's Broken!

Now that we've cleared up return policies, what happens if you want to return an item, not because you don't like the color or it doesn't fit, but because it's broken? First, if the retailer tries to refuse your request to address the broken item because they have a "No Returns" policy,  politely state that their refund policy does not apply in this situation. Be sure to have your receipt and any other documentation with you. Know what the manufacturer's warranty is on the item. Ask the retailer to either repair  the item, replace it or refund your money. Generally speaking, the retailer has legal responsibility to sell you an item that is in working condition and is therefore responsible to make you whole if the item is defective. In addition, if you are fortunate to live in a state that has legally required "Implied Warranties", the retailer and the manufacturer have equal responsibilities to either repair/replace the item or refund your money. That is very helpful when the retailer tries to tell you to ship your defective item back to the manufacturer and deal with the situation yourself (as happened in a case I investigated where the retailer wanted the consumer to ship a large dining room table to the manufacturer! After a heated discussion over Maryland's Implied Warranty laws, the retailer succumbed to reason and fixed the table).

If you have purchased an item that is defective, don't just give up and throw it out. Know your rights and pursue the issue. Contact your local consumer protection office if the retailer won't help you. For more information on defective goods, see this article from Consumer Reports.