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.

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.

So You Think You Can Return It?

One of the most common complaints received by consumer protection agencies involves the issue of returning items.  There's a perception that if you have not used the item, the tags are still on it and you have your receipt, that you can return it and get your money back. While most merchants do have reasonable return policies, consumers need to know that they do not have the legal "right" to return items (unless the item is defective--more on how to handle that will follow in a later posting).

Merchants have a variety of return policies which they develop to further the goal of making their business profitable. However, to level the playing field or to make it fair for consumers, the return policy must be posted so the consumer can determine what it is prior to purchasing the item. This can mean a sign around the register area or even a notice on the item itself. Sometimes retailers will have a liberal return policy such as 90 day return with receipt on most items, but will put a sticker on the price tag of particular items, such as Prom Gowns or Bathing Suits, that this item can not be returned at all. Some retailers who previously have had generous return policies have switched to a no-refund policy due to the difficult economic times. Many are charging a re-stocking fee for larger items and electronics.

Bottom Line--Don't lose precious dollars on items that you can't use, don't fit, or you just don't want. ALWAYS check the return policy before buying an item which you are not sure you want to keep--and see it in writing--never go on a salesclerk's verbal explanation.

It's Too Hot To Go Out--Why Not Check Your Insurance

The "Dog Days" of summer are upon us--it's too hot to spend much time outside, so why not use the time you spend inside to check on your insurance coverage? Most of us get our vehicles and homes/belongings covered and then just pay the bill every six months without looking through the mounds of papers which are sent with the bill. We never check to see if our coverage meets our needs five years later and don't bother thinking about it until we need to make a claim. We should however, check our policies at least once a year--after all, we have the insurance to reduce our financial risk if something were to happen--but if we don't have coverage, for example, on the jewelery we've accumulated over time, then it won't pay a dime when that jewelery is stolen or lost.

Check on:

• Does your homeowner's insurance cover the value of rebuilding your home--don't rely solely on the insurance company's estimate--check with a reputable, licensed contractor to see what the cost would be to rebuild.
• Should you have rider, or additional, policies for jewelery, collectibles, electronic equipment, firearms etc?
• Consider flood insurance--seriously. It's not just for those who live in "flood" zones. Homeowner's policies exclude damage from floods. According to FEMA--"a flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow. Many conditions can result in a flood: hurricanes, broken levees, outdated or clogged drainage systems and rapid accumulation of rainfall" so it's possible for your house to be flooded by a major rainstorm and you won't get any help from your insurance company. Check on www.floodsmart.gov for more info.
• Depending on where you live, consider earthquake insurance ( as someone who felt that earthquake in Maryland last week, I could rest a little easier knowing that I had earthquake insurance).
• Do you have a need for an umbrella insurance policy--one that covers your assets more broadly than the homeowner's or auto policies? Definitely something to consider if you have teens driving in your household.
• Do you have a college student who is living in a dorm and does your homeowner's insurance cover their belongings at school? If you student is living off campus in an apartment, get them renter's insurance.
• Do you have replacement value for the belongings in the house--if not, you'll get pennies on the dollar to replace the items.
• What is your deductible for homeowners or car insurance? We like to raise the deductibles since it lowers our yearly payments--but can you really handle that deductible if you needed to make a claim?
• Many states permit the insurance company to check your credit report when determining the premium for you auto insurance--check your credit report yourself first at www.annualcreditreport.com 

For more information on making sure your insurance is meeting your needs, check the federal government's www.mymoney.gov pages on insurance. Take 30 minutes now and protect your financial future from risk.

Where’s my Car?*!

Heading out to shops and restaurant this summer? If you are parking in tight metropolitan areas, be sure to look for signs all around the parking lot where you are thinking of parking. If you could be towed from that lot, there will be signs saying “parking only for customers of……” or something similar to let you know what are the conditions for parking there. You need to take these signs seriously. The businesses which operate the lot are--rightfully so--trying to make sure their customers can park there.

If you come back to find your car missing, call the non-emergency number for the local police-most areas require the tower to log the tow in with them so they can direct you on where to locate your car. If you are towed without your permission, there are maximum rates in most of the metropolitan areas which should be posted by the tower. In addition, many, but not all, towers must accept payment by either credit card—Visa or Mastercard-or personal check. Keep in mind that the tower has the right to choose between these two methods of payment.

Be sure to inspect your car before you leave the tower’s lot—note any damage on the towing receipt. Usually a towing company may not tow a car which has a valid handicap registration plate or disable permit—unless a police officer authorizes the tow or the vehicle is blocking a clearly marked fire lane or access to another vehicle.

Avoiding a distressing situation like this is the best course of action—don’t have the attitude that “no one cares if I park here” or “hey, my car can fit here, so I’m taking this spot”. Look carefully where you put your car to make sure it’s there when you get back after that great dinner/shopping trip!