Intelligent
Vehicle Buyer's Manual
Version 2009
Dr. Bill
c
Copyright 2009 by FMSI
All rights reserved
Published by
Frugal Booklets,
a division of
FMSI
530 SW Hume St.
Portland, OR 97219
frugalbooklets@comcast.net
Printed in the United States of America
Brief Table of Contents
(Note: A more detailed Table of Contents follows)
Topic Page #
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Why write this book? Auto dealers need to eat, but so do we!
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Here we introduce nine critical steps in the vehicle buying process
including a brief discussion of each. Each of these steps is then
discussed in more detail later in the booklet.
Let's Talk Safety First! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
This section could save your life or the life of your family! Safety should
be a major concern in your vehicle purchase. This section discusses active
and passive safety features, the importance of vehicle weight and suggests
a worksheet for evaluating each vehicle's safety features.
STEP #1: Using the Internet and Web . . . . . . . . . . . . . . . . . . . . . . . 28
The Internet and Web have changed the way we shop. Informed vehicle
shoppers need to use the Web to collect safety, price and performance data
about their choices. We identify the best Web sites and how to use them!
STEP #2: Which Vehicle Do I Need? . . . . . . . . . . . . . . . . . . . . . . . 32
With hundreds of vehicle sizes, shapes and prices to choose from, how do
you drill down to what is best for you and your family? Step #2 lists the
options and suggests how you decide.
STEP #3: What is my budget and what are my costs? . . . . . . . . . . . 37
What is the true cost of vehicle ownership and how much can I afford to
spend? Buying a vehicle within your means helps you sleep at night. Here
we include a financial worksheet and Web resources that can help.
STEP #4: Should I buy new or used? . . . . . . . . . . . . . . . . . . . . . . . . . 42
Buying new or used each have advantages and disadvantages. Which is
better for you? Step #4 discusses the key issues and suggests a number of
creative sources for finding your next vehicle.
STEP #5: Financing Options (Loans & Leases) . . . . . . . . . . . . . . . 47
Shopping for auto financing like shopping for groceries. A one percent
reduction in your loan rate can save almost $1,000 in interest over the life
of the loan. Line up your financing first, before you go shopping. Check
rates at your credit union or local bank. Check the Web for current auto
manufactures' loan programs or incentives. You might also consider leasing.
STEP #6: Finding Your Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Searching for the "right" car takes time and effort, but it's well worth it.
Use the Internet to search new and used car dealers, rental car companies,
vehicle listing Web sites, private individuals and local newspaper ads.
More than three-fourths of today's vehicle buyers use the Web. Consider auto brokers,
buying clubs, used car superstores, fleet or program cars and even Federal
Government auctions. We cover all this in Step #6.
STEP #7: Dealing With Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
In dealing with the dealer, preparation is the key! Don't buy on the first trip.
Leave your checkbook at home. Collect information, take a test drive and
evaluate. Choose a dealer with a great community reputation that has been in
business more than five years. Have a mechanic in the service department
recommend the best salesperson in the house. Look at sticker prices (if you've
done your homework on the Web, this should not shock you). When you done
collecting data, leave, without buying. Sleep on your feelings.
STEP #8: Auto Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
If you are buying a used car, without a warranty, don't buy without a thorough
inspection by an independent mechanic. One hundred dollars can save you
thousands tomorrow. Ask your mechanic for a summary of any problems and
an estimate of their repair cost. If you do the inspection yourself, use our Used
Vehicle Evaluation Form. Always look at vehicles during the daytime. Run a Carfax Vehicle History Report. It will give you a vehicle history report containing all the information in their computers.
STEP #9: Negotiate , , , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
In this section you learn about dealer holdbacks and incentives. You will
be able to find out about rebates and special financing. You will learn the
dealer's true cost of the vehicle and that the dealer's invoice price is not the
dealer's true cost. Finally, determine your highest price for the vehicle. Refuse
the insurance coverage and extras like paint sealant, rust proofing, fabric
protection and alarm systems.
Disposing Of Your Old Vehicle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
What should you do with the vehicle you currently own? Dealers won't
give retail Blue Book value on your trade-in. You might get its wholesale
value. Selling it privately usually brings a better price, but can be a hassle.
It may be best to give it away to a charity or family member.
Complete Table of Contents
Topic Page #
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
About The Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Auto Industry Outlook – Year 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The Vehicle Buying Process - A Nine Step Process . . . . . . . . . . . 13
Step 1: Using the Internet and Web . . . . . . . . . . . . . . . . . 14
Step 2: Determine what you want and what you need . . 14
Step 3: What is my budget and what are my costs? . . . . 14
Step 4: Should I buy new or used? . . . . . . . . . . . . . . . . . . 14
Step 5: Check out your financing options . . . . . . . . . . . . . 14
Step 6: Locating A Good Vehicle. . . . . . . . . . . . . . . . . . . . 15
Step 7. Dealing with the Dealer. . . . . . . . . . . . . . . . . . . . . 15
Step 8. Have an Inspection. . . . . . . . . . . . . . . . . . . . . . . . . 15
Step 9. Final Negotiations. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
A Notebook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Notes:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Let's Talk Safety First! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Driver Is Key To Safety. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Vehicle Safety Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Weight Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Passive Safety Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Active Safety Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Anti-lock Brakes (ABS) . . . . . . . . . . . . . . . . . . . . . .21
Daytime running lights (DRLs) . . . . . . . . . . . . . 22
Traction Control. . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Preferred Equipment. . . . . . . . . . . . . . . . . . . . . . . . 22
WORKSHEET: Safety Features Evaluation Form . . . . . . . . . . . 25
Notes About Safety Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
STEP #1: Using the Internet and Web
Author's note about the Internet and Web: . . . . . . . . . . . . . . . . . 28
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Using Internet Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Internet: A Global Network of Networks . . . . . . . . . . . . . . . . . . . . . . . . . 29
World Wide Web . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Search Engines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Recommended Web Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Great Vehicle Information Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
The Next Step. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Notes About The Web . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
STEP #2: Which Vehicle Do I Need?
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Background Material. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Vehicle Types: Automobiles vs. Light Trucks . . . . . . . . . . . . . . . 32
Cars: 4-Door Sedans - 2-Door Coupes - Station Wagons -
Convertibles - Sports Cars . . . . . . . . . . . . . . . . . . . . . . 32
4-Door Sedans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Station Wagons. . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
2-Door Coupes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Convertibles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sports Cars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Light Trucks: Mini Vans - SUVs - Pickup Trucks - Vans
Mini Vans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Sport Utility Vehicles (SUVs) . . . . . . . . . . . . . . . . . 32
Pickup Trucks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Vans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Hybrids: Hybrid Power - Hybrid Vehicles - Shared Platforms
Hybrid-Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Hybrid Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Shared Platforms. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Important Considerations . . . . . . . . . . . . . . . . . . . . . . . . . .34
Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Gas Mileage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
Handling. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Driveline: Transmissions - Front Wheel Drive - Rear Wheel Drive -
All Wheel Drive - Four Wheel Drive . . . . . . . . . . . . . . . 34
Front-Wheel Drive. . . . . . . . . . . . . . . . . . . . . . . . . . 34
Rear-Wheel Drive . . . . . . . . . . . . . . . . . . . . . . . . . . 35
All-Wheel Drive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Four-Wheel Drive . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Avoid Orphan Cars. . . . . . . . . . . . . . . . . . . . . . . . . 35
Beginning to Make a Choice . . . . . . . . . . . . . . . . . . . . . . . .35
Ask People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Auto Consultants . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Web Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
The Next Step . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Notes About Step #2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
STEP #3: What is my budget and what are my costs?
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Background Material. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
How Much Can I Afford To Spend? . . . . . . . . . . . . . . . . . . . . . . .37
Buying With Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Cars: A Necessity, But A Bad Investment . . . . . . . . . . . . . . . . . . 37
Making A Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Borrowing Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Down Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Hidden Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Tax & Tags . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Web Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
WORKSHEET: Monthly Vehicle Expense Questionnaire. . . . . . . . . . . 40
The Next Step. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Notes About Step #3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
STEP #4: Should I buy new or used?
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Background Material. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Should I Buy A New Or Used Vehicle? . . . . . . . . . . . . . . . . . . . . . . . . . . 42
New Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Depreciation Makes Used Cars a Better Investment. . . . . . . . . . 43
Certified Used Cars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Program Cars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Other Bargains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Information Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Orphan Cars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Web Resources. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44