APPENDICES

A.  Top Ten Tips For Buying a Car
endix A: Top Ten Tips for Buying a Car
10. Don't sign the purchase contract unless you're absolutely sure you want to own the car and can make the necessary payments. Always read the fine print on any contract. The contract is binding: There is no three-day cooling-off period. You can't return the car after you've bought it!

9. Have a mechanic and body shop inspect a used car thoroughly so you know the condition of the car and any repairs you may have to make if you buy it.

8. If you're considering buying a used car, always review the car's title history first, which will allow you to interview past owners about maintenance and accidents, as well as verify odometer readings before committing to the purchase.

7. If you're planning to trade in your current car, don't mention it to the dealer until you've agreed to a price for a new car.

6. Remember, a dealer's highest markups are on the back end of the sale: options, extended warranties, rustproofing, credit life insurance and the like, so be a firm negotiator and don't pay for unnecessary services.

5. During a test drive, drive the car as you plan to drive it after you buy it: Merge into freeway traffic, stop quickly, stop on ice and snow if possible, make U-turns in a parking lot, and so on.

4. Price is important, but it isn't everything. Ask about the service a dealership will give you if you buy there.

3. Shop as diligently for a good seller as for a good car.

2. Comparison shop for makes and models by visiting the library and looking up objective car reports before you talk to sellers.

1. Decide on your needs and wants in an automobile. Don't be swayed by friends or salespeople to buy something that you don't want.

B.  A Car Buyer's Checklist

Appendix B: A Car Buyer's Checklist
What kind of engine, body, safety features and options do you want in a vehicle? Use this checklist to help think these through. Jot down extra notes to yourself in the margins.

What are you going to use the car or truck for?

(Check as many as apply.)

Going to and from work
Transporting kids
Hauling equipment
Long-distance travel
Going to and from activities (biking, skiing, etc.)

Based on that, what type of car makes sense?

(Check one or more to research.)

Sporty two-door coup
Four-door sedan
Hatchback
Wagon
Minivan
Full-sized van
Truck (small, medium or full-sized pickup)
Sport utility vehicles (four-wheel drive*)
Two-wheel or four-wheel-drive car
Luxury car

*Four-wheel-drive vehicles get better traction on snow and ice than two-wheel drive cars, but they cost more.

What standard features and options do you want?

Engine:

(Write choices in spaces provided.)

How many cylinders and valves? A four-cylinder engine will get better fuel economy than a six-cylinder engine. Three valves per cylinder is common in older cars; most new cars have four valves per cylinder to increase acceleration with no fuel economy loss.

Carburetor vs. fuel injection. Fuel injection is standard in newer cars and improves fuel economy and acceleration.

Automatic or manual transmission. If you buy an automatic, having an overdrive option will save on fuel costs.

Safety considerations:

Air bags: Driver and/or passenger.

Seat belts: Shoulder straps attached to the post next to the door are safer than those attached to the door.

Anti-lock Brake System (ABS): This is helpful only if you use the system properly. Do not pump your brakes in an emergency stop.

Body design:

Side-door intrusion beams. These protect you in side accidents and are mandated for 1997 cars.

Full perimeter dual door seals. These help keep doors from popping open in a collision.

Front and rear "crumple zones." These help absorb impact in a collision.

Interior options:

(Check as many as you want, but remember, most options are sold in packages.)

Air conditioning
Power windows and locks
Tilt steering column
Interior trunk and hood release
Cruise, or speed, control
Rear wiper (on wagons)
Rear defroster
Front bucket seats
Front bench seats
Reclining seats
Back-seat roominess
Good head room
Extra leg room
Large trunk size
Seat coverings
     • vinyl

     • velour

     • leather

Folding rear seats (split seats or whole-seat fold down)
Sound system: radio, cassette, CD player and number of speakers
Built-in cup holder(s)
Arm rests
Vanity mirrors
pendix C: Car Pricing Comparison Worksheet
C.  Car Pricing Comparison Worksheet

Copy this worksheet and use it to compare prices of cars that are the same year, make and model sold by different sellers; cars of different years, makes and models; or both.

Vehicle A (year, make, model):

Vehicle B (year, make, model):

Vehicle C (year, make, model):

Item Seller A Seller B Seller C

Sticker/sale price:

Discount off sticker/sale price:

Options (list and price)

Other options you're considering:

Rustproofing

Fabric protection

Service contract

(or extended warranty)

Credit life insurance

Credit disability insurance

Notes:

Does the seller offer maintenance service?

Does the seller offer loaned cars or transportation in case of repairs?

If it's a used car, is there a warranty?

If it's a used car, who was the last owner? (Call the owner for information on how the car held up and was maintained.)

D.  Insurance Comparison Worksheet

dix D: Insurance Comparison Worksheet
Where you will keep the car

Driver(s) Age Sex Marital status Violations and accidents

(last 3 years)

#1

#2

#3

Vehicle (year, make, model):
Miles driven to work:
Annual mileage:
Miles of principle driver:

Level of coverage Company A Company B Company C

Bodily injury liability/
property-damage liability:
Personal-injury protection (PIP):
Uninsured/underinsured motorist (UM/UIM):
Collision coverage:
Comprehensive coverage:
Other (misc. coverages):
Membership fees:

TOTALS:

Minnesota requires you to carry the following minimum insurance: $30,000 per person and $60,000 per accident for bodily injury and $10,000 for property damage liability; $40,000 for personal injury protection (PIP); and $25,000 per person and $50,000 per accident for uninsured/underinsured coverage.

E.  Top Ten Tips for Leasing a Car

ix E: Top Ten Tips for Leasing a Car
10. Be careful with extras. Does the lease include a charge of hundreds of dollars for rustproofing or an extended warranty? You're only going to drive the car for a couple of years, so think about whether you really want to pay for these items.

9. Learn the jargon involved in leasing and brush up on the math involved. That way you'll be confident that you're getting the best possible deal.

8. Make sure that your trade-in and any other credits you should receive are listed on your leasing contract so that you are getting full credit for them.

7. Choose a make and model that traditionally holds its value. Lease payments should be lower on a popular model that will have a good re-sale value.

6. Understand the up-front costs. If a dealer offers a "zero down" lease, you should not have to pay anything up front other than tax and license fees. Otherwise, you might have to pay the security deposit, a downpayment and the first month's payment at the beginning of the lease.

5. Shop around. Visit several dealers and compare their offers.

4. Examine all of the fees you'll pay in addition to the monthly payment. This helps you compare "apples" to "apples" and figure out your total financial obligation.

3. Negotiate the price of the car as if you were buying it. If, during negotiations, you switch from buying the car to leasing it, the dealer should still base your lease payments on the same negotiated price. Some don't. Some revert to the sticker price, which is usually much higher.

2. Don't just look at the monthly payment. Most of the time the payment will be lower when you lease than when you buy a car, but remember: you won't own anything at the end of your lease, whereas when you buy a car it's really yours when you make the final payment.

1. Most importantly — be sure leasing is right for you before you sign a leasing contract. Remember — there is no three-day cooling off law that allows you to return a car once you've signed a contract!

F.  Car Buying Glossaryi F

uying Glossary
Anti-lock brakes: Brakes that automatically pump for you when you slam your foot on the brakes in an emergency stop. They may keep you from skidding while you try to turn to avoid an accident.

"As is" warranty: If you buy a car sold "as is," you must pay for any and all car repairs. There is no warranty. "As is" must be checked in the buyer's guide displayed in the car window at the dealership. In Minnesota, a car can only be sold "as is" if the Used Car Warranty Law doesn't apply to it. (See Used Car Warranty Law, Page 55.)

Auto broker: Someone who you can hire to help you shop for a car. An auto broker may work for a handful of dealers or a single dealer.

Blue book: The National Auto Dealers' Association's Used Car Book, listing estimated used car prices based on model, make, year and mileage. The pocket-sized blue book is actually orange.

Buyer's Guide: A double sided form that the dealer fills out to tell you whether or not the vehicle comes with a warranty, and, if so, what the warranty includes. The Federal Trade Commission requires all dealerships to display the buyer's guide in the vehicle's window.

Cooling-off period: While a "cooling-off" period sometimes applies to the sale of products, allowing you to return a product and get your money back, no such cooling off period exists in car sales. Once you sign a contract to buy a car, the car is yours.

Credit life insurance: Your finance company may require this. It ensures the finance company loaning you money to buy your car will be
among the first creditors paid if you die before you pay for your car.

Credit disability insurance: Your finance company may require this along with credit life insurance. It ensures the finance company loaning you money to buy your car will be among the first creditors paid if you are disabled and unable to work to pay off your car loan.

Curbstoner: An unlicensed professional used car seller who poses as a private individual selling his or her own car. Curbstoners sell used cars "at the curb," not at a dealership. They specialize in taking advantage of unschooled buyers.

Dealer: A car dealer is anyone who sells more than five cars in a year. A dealer must be licensed and abide by all laws that apply to dealers, including the state's Used Car Warranty Law.

Dealer invoice: This is often represented as the price the dealer pays the manufacturer for the car. However, holdbacks and other incentives almost always reduce the dealer's cost.

Deductible: A car warranty usually specifies a "deductible" amount, an amount you must pay whenever you have a warrantied part on your car repaired.

Depreciation: The reduced value of a car after you buy it. A brand new car can lose or "depreciate" between several hundred and several thousand dollars in value the minute you drive off the dealer's lot.

Extended warranty: This is also referred to as a service contract. It is an option you may purchase on a new, and some used cars. The extended warranty should cover car repairs

over a longer period than the manufacturer's warranty, which comes with the car. Beware that it is a high-profit item for a dealer. Check to see exactly what it includes, and remember that you can negotiate the price.

Fabric protection: This is one of the extras you may choose to have when you buy a new car, and may be expensive because of high dealer mark-ups.

Holdback: An amount the manufacturer pays the dealer each time the dealer sells its make. Also referred to as a "kickback."

Lemon Law: Minnesota's Lemon Law requires that a car seller repair or replace a motor vehicle with defects or problems covered under the warranty, which the vehicle owner reports within the warranty period or within two years after delivery of the vehicle, whichever comes first. Read about the law in Chapter 5 to see if it applies to your car.

Leasing: This is like long-term car rental. You make monthly payments for the opportunity to drive a car, but the leasing company owns it. For a glossary of leasing-specific terms, see Page 47.

Options: These are extras you can have added to a standard vehicle, and usually come in packages. They often include air bags, anti-lock brakes, power locks and windows, rear wiper, rear defroster, and such comfort items as velour or leather seat coverings.

Paint sealant: This is one of the extras you may choose to have when you buy a new car, and may be expensive because of high dealer mark-ups. Whether or not it actually makes the new paint shine longer is unknown.

Prior salvage: If a car was totaled and then rebuilt anytime after June 1993, the car's title must be marked "prior salvage." It may not be structurally as sound as another car after being rebuilt.

Recall: If a car model has a defect, a manufacturer may issue a "recall" notice, meaning that the defect will be fixed at the manufacturer's expense.

Repossession: If you don't make your car loan payments, you risk having your car "repossessed" or taken back by the finance company that gave you the loan. Always contact the finance company immediately if you aren't going to make a monthly payment. The company may be willing to work with you to set up a payment plan.

Rustproofing: Meant to hold off body erosion, rustproofing is a popular extra on new cars. A type of rustproofing called galvanizing is used by manufacturers and comes with a new car. You'll pay extra for after market rustproofing, and there is controversy about its worth.

Service contract: Also called an "extended warranty," it supplements the manufacturer's warranty, which comes with a vehicle you purchase. A service contract is a high-profit item for the dealer. Make sure it offers substantially more than the standard warranty.

Title: The title shows a vehicle's ownership history. It is important to check the title of a used car and to contact past owners listed to verify the mileage and inquire about the car's maintenance.

Used Car Warranty Law: A state law that protects used car buyers. It says that used car dealers must provide basic warranty coverage for most used cars and small trucks sold to Minnesota buyers. Read more about the law in Chapter 8.

Warranty: All new and many used cars come with warranties. A warranty offers a guarantee that certain mechanical and body parts will be repaired if they aren't in proper working condition. The warranty is typically limited, so find out what the limitations are.