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Avoiding mistakes when buying a car
Purchasing an automobile often presents an intimidating set of mechanical, financial, and legal issues. Unscrupulous dealers take advantage of uninformed consumers by using several new and old techniques. At best, a consumer may end up paying more than they expected. At worst, dealer fraud can end in repossession and a negative credit history.
Whether new or used, owning a car can easily become a thousand-dollar headache. Fortunately, an ounce of prevention is worth a pound of cure—these tips will help you to avoid the major pitfalls.
New and Used Car Purchases:
- Shop around for financing before you buy, because credit unions and banks usually offer much better rates than dealerships. Financing through the dealership also gives unscrupulous dealers an opportunity to run one of many financing scams.1
- Get a fair price. Kelly Blue Book (KBB) and the National Automobile Dealers Association (NADA) guidebook both offer online editions of vehicle pricing, by year, make, model, and condition. Check your local library or bookstore for the print editions of these well-known guidebooks.
- Shop around for the best warranty. If the car is used, call the manufacturer to find out if it is still under warranty, and if that warranty is transferable to a new owner.
- Check for recall and service bulletins online at the National Highway Traffic Safety Administration (NHTSA) and Center for Auto Safety (CAS). You may also find out about recalls and bulletins by writing down the VIN number and calling the customer service number for the manufacturer of the vehicle you plan to purchase.
Used Car Purchases:
- Find out the condition of the vehicle. You can purchase a vehicle history report through a National Motor Vehicle Title Information System approved vendor, or check to see if there is a free service through your bank or credit union. Do not buy the vehicle if you find a record of serious damage, an existing lien, or if the title is identified as salvage, junk, rebuilt, or flooded. Have a mechanic check out the vehicle. Many mechanic shops offer this service for around $100.
- Make sure the seller signs a document showing the purchase price, date, name of the seller, and the year, make, and model of the vehicle—the title document itself may be sufficient for a private-seller transaction.
- Make sure the title transfers properly. Check with your local department of motor vehicles for the rules. Many AAA offices have a vehicle registration service and can assist with the title transfer.
Problems After the Sale is Complete:
- Don't get scammed by the dealer on repairs. Some unscrupulous dealers repeatedly sell the same defective car, knowing that the buyer is likely to spend more money at the dealership for ineffective repairs. The buyer may spend so much on repairs that they are unable to make payments, giving the dealer the opportunity to repossess the car and run the same scam again.2 If you experience mechanical problems soon after the purchase, comparison shop before taking it back to the dealer. Pay with your credit card, so you will be able to withhold payment through your credit card company in the event there is a problem with the repairs.
- Know the “lemon law” for your state. Some state lemon laws hold dealers responsible for sale of defective vehicles, while others don't. The Center for Auto Safety has an online guide to state lemon laws.
- For details on financing scams: Consumers for Auto Reliability and Safety (CARS) http://www.carconsumers.org/usedcarbuyingtips.htm
In response to a tidal wave of unfair marketplace practices, the CFPB asked the public to submit comments on the impact of junk fees on their lives. Some 2,500 comments later, consumers have described the pain points caused by unfair junk fees.
Cover graphic courtesy Student Borrower Protection Center, used by permission
When the COVID-19 pandemic turned life upside down in early 2020 and commercial flights came to a near-halt, the U.S. government gave the airline industry $50 billion to save jobs and keep the industry afloat. Since then, despite surviving because of their customers’ tax dollars, the airlines repeatedly have canceled and delayed flights, denied refunds and failed at customer service, according to complaints filed with the U.S. Department of Transportation (DOT). Not First Class: Flyer complaints soar as airlines cancel flights, deny refunds, ruin plans, a new report released Thursday by CoPIRG Foundation analyzes more than 200,000 DOT complaints going back to 2016.
We looked at the data around more than 200,000 complaints against the airline industry and the data around flight departures and arrivals starting in January 2016. This analysis should help consumers to take as much as possible into account when deciding where to fly and through which airline.
Even with the knowledge I’ve gained working as a consumer advocate for several years, getting my finances in order has been a work in progress.
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