Archive for May, 2009
By Eric Driver. Over the next few years, people who are thinking about purchasing a new vehicle may be in for a surprise. Many auto dealerships are outfitting new and used cars with devices which can deactivate the engine remotely. The reason: to make repossessions easier.
As more people lose their jobs, they’re forced to prioritize their bills. Some bills have to wait while others are put on top of the stack. Dealers and lenders want to ensure that their customers make their payments on time. The shut-down units that are installed into automobiles provide the motivation.
In this article, I’ll explain how these devices work and describe a few of the issues involved with their use. We’ll also take a closer look at how they can benefit customers, dealers, and lenders.
Safety And Other Issues
The shut-off component is installed onto a vehicle’s powertrain. Through telematics, a dealership or lender can remotely turn the engine off if the driver has failed to send in his or her payments. Currently, dealers are triggering the device only after a payment is several days late. Before the engine is deactivated, an indicator light will normally display on the vehicle’s dashboard. Some companies will allow the deadline to pass in order to give the motorist time to send a payment.
Drivers are understandably concerned that the shut-down device can be dangerous, especially if their engine is turned off while they’re driving at high speeds. Most dealers will only trigger the unit once the engine has been manually turned off or while the car is at idling speed.
Protecting Customers, Dealerships, And Lenders
The component was initially introduced for subprime borrowers. Car dealerships and lenders consider such borrowers (those with “B” credit ratings) to present more risk. In the past, they offset the increased risk by applying a higher interest rate to auto loans. The shut-off units offer an alternative.
By installing them on a car’s powertrain, dealers and lenders assume less risk. First, motorists are motivated to make their payments on time in order to avoid having their driving privileges interrupted. Second, the car can be retrieved more easily if payments are not forthcoming. As a result, subprime borrowers can enjoy a lower interest rate when buying a vehicle.
Full Disclosure
It’s important to note that the shut-down devices are not hidden from prospective buyers. In effect, they know the vehicles have been equipped with them. Dealerships will usually disclose the unit’s presence on forms that require the buyer’s signature.
Even though the components were originally meant for the subprime car buyer market, it is likely that more dealers will outfit their vehicles with them over the next few years. In fact, a growing number of credit unions and banks are requesting the device’s installation before providing an auto loan. When the time comes to purchase a new car, the component may not be an option.
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Most car owners have mixed experiences when it comes to buying cheap used cars. Below I have listed 3 tips on how you can contibute to make your car purchase experience as pleasant as possible.
1. Start With Asking the Basic Question: What is My Budget?
Most people in the used car market tend to consider the cost of the car only. However, many car purchasers often forget additional expenses that follows, such as
* gas expenses
* insurance expenses
* road taxes
* maintenance and repair expenses
Depending on which model you purchase these additional costs can be pretty high. To figure out an estimates of such costs, mechanics or dealers what typical repairs you can expect plus a cost estimate on these. If you do a little research you can compare cost estimates from several sources as well. It’s smart to do a little legwork upfront. As soon as you have figured out the maximum amount you can afford to spend on your car purchase you have to stick with this limit and never override it.
2. Check out if the vehicle have had an accident repair
How can you know whether the car you consider to purchase have had an accident? Did you know 20 percent of the cars on the roads have been repaired for accidents? So, it you are searching for cheap used cars there’s a probability that it will have had an accident.
The best way to get the truth about this is letting an independant car inspections company check the vehicle before you purchase it. If the inspection company concludes that there have been a major accident damage you got two options;
- get the vehicle properly fixed at the seller’s cost
- look for another car
3. Test Drive the Vehicle
You should be able to test drive the car. It’s important to drive it on a range of roads and it should encompass a drive of at least 15-20 miles. You also have to check out a few things;
- does the vehicle have a valid tax disc (license)?
- does it have a MOT certificate?
- do you find a written statement saying that you are covered under the seller’s or your own policy before you start to drive? Be aware that it’s always the driver
who is responsible for that the vehicle is capable of being used on the road.
It’s smart to take a friend with you on the test drive and hear his or her opinion. You should both
- look for unusual things like uncommonly much smoke or blue smoke when starting up
- listen very carefully for banging and other unusual noises.
- check if the steering feels normal
- check for pulling and wandering when using the brakes
Doing a little legwork can make buying cheap used cars a great experience.
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Selecting new car insurance
The experience of buying a new car can be both frustrating and exhilarating. Selecting a single car from the number of makes, models, options and features available can quickly make one’s head ache. However selecting your new car is only part of the process - one must also select new car insurance from one of the many products on the market. Start learning about various new car insurance offerings long before you finalise the purchase of your new car.
Various factors affect new car insurance premiums, and bearing these in mind when deciding on your purchase can make the process quicker and less troublesome.
Selecting the best new car insurance for your needs
The financial outlay for your new car insurance may vary quite a bit. Before you are overwhelmed by the numerous showroom possibilities and salesperson smoothtalk, take the time to make a list what you want from your new car. At this time, it’s also prudent to consider factors which companies providing your new car insurance will consider when quoting your insurance rate.
Factors which can impact on new car insurance premiums are:
* How you use your car
* The number of passengers you generally carry
* How often you drive your car
* Where you drive your car
Considering these factors will not only help select the best car for you, they could also save on your new car insurance premiums.
Features to consider when you buy
Make a list of the criteria you consider most important for your new car to have. You may want to consider: engine power, fuel efficiency, carbon emissions, transmission type, head and leg room, safety features (eg side airbags, reversing camera) and security features. Some of these are items for which new car insurance companies will give you a premium reduction.
Looking at manufacturers websites can be a quick convenient way not only to find out what is available, but can also list the cost of the various options and add-ons which will affect your new car insurance quote.
Considering Cost
Considering all costs associated with your new car will insure no nasty financial surprises down the road. In addition to the sticker price, consider fuel consumption, expected maintenance, financing costs and of course, your new car insurance.
The replacement cost of your car has a significant impact on your new car insurance payments. A high-priced luxury or sports car will usually cost more to insure than a common economy car because they are more likely to be stolen and are also more expensive for the company providing your new car insurance to repair or replace.
Some cars are known for getting better new car insurance quotes than others. As an example, insurance for a $14,000 Dodge Neon will cost you the same as a Volvo XC70 costing $34,000. Over five years, Edmunds.com quote an average of $4,410 for the Dodge Neon and $4,605 for the Volvo.
Why are insurance premiums so similar for these cars where there is such a wide gap in their purcase prices?
The new car insurance companies favour the Volvo as in an accident it suffers less damage, imposes less damage, protects its passengers better and is less likely to be stolen.
The Volvo tends to receive a bigger insurance discount because it inflicts less damage to other cars in an accident, suffers less damage, has a lower theft rate and protects its passengers better in an accident.
One national new car insurance provider lists the Dodge Neon as worse than the average car in three categories, backing up the reason that it is more costly to insure.
Research is important
Not only do you need to research into the features of your new car, you would do well to do some background research as well.
A large factor in the cost of new car insurance premiums is the sticker price of the vehicle - how much it would cost to replace if it was written off in an accident or stolen. The cost of repairing your vehicle also affects the cost of insurance, with cars having expensive replacement parts or being labor intensive to repair bringing higher premiums. Vehicles more prone to be involved in accidents and those which are common targets for theives will likewise create a higher new car insurance bill.
To find some of the data on the points mentioned above, visit the website of the Highway Loss Data Institute. Information includes collision repair costs, theft rates and injury claims for each vehicle model.
Shop around for your new car insurance
Insurance premiums will vary from company to company, so using a tool such as Insurance.com’s auto quote comparison tool can help you quickly compare rates across many new car insurance providers to find the cheapest without having to visit their sites individually.
It is much, much better to take your time in the beginning, and make sure that the new car insurance you choose is appropriate new car insurance for your needs.
Please note that this article should not be construed as financial advice. It’s important to do your own research when selecting your new car insurance.
This article is an extract from Mark Bennett’s comprehensive guide on obtaining new car insurance, which is available from AllFinanceAdvice.com. Mark Bennett is a staff writer for AllFinanceAdvice.com, and publishes regularly to other reputable financial websites and publications.
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Most people associate used auto dealers with traditional local car dealership stores where you can simply walk in and look at the cheap used cars they offer and eventually purchase one. In this article I will use a little broader definition; all sources of used cars that you can purchase, whether they are online or traditional.
In this article we will take a closer look at the three - probably best - sources of decent cheap used cars such as
- Government and Police car auctions
- Vehicle brokers
- Cars purchased directly from owner.
Government and Police Car Auctions
Many people with automotive knowledge claim that this is probably the place where you will get the highest value for your money. If this is a fact that people make bargains every day at auctions; in many cases they pay far less than the vehicle’ s trade-in value.
These cars are coming from banks, government and the police. The Bank repossess cars that people cannot pay for. The government and police are auctioning seized cars. It’s not difficult at all to find these auctions. You’ll find them online as well as at locations all over the country. So go online or read newspapers and auto magazines and you will find them.
Some of these cars are old, with a high mileage and need repair. But an increasing number of public auction vehicles are late models with a low-mileage or even brand new cars. Due to the financial crises we can expect that the supply of such vehicles will increase even more in the near future, so be prepared negotiate a real bargain if you can.
Car Brokers
Car brokers are actually used auto dealers that buy the cars they sell primarily at dealer-only auctions. Brokers have much lower costs than traditional dealerships so their mark up is pretty low and in many cases very near the actual trade in value. Traditional dealerships cannot compete at this price level.
The biggest benefit using brokers is that it is so easy for the buyer; the broker does all the legwork.
Cars Purchased Directly From the Owner
If you possess some negotiating skills this is something for you, especially in these times of financial crises where some car owners are selling their vehicles in pure panic. You can take advantage of this and negotiate a really low price. There are plenty of cars for sale, just check your local newspaper’s classifieds section. You can also go online and check websites like Cars.com, AutoTrader.com and similar.
Take a look at this cheap used cars video.
A word of caution: Always remember to require a CarFax or AutoCheck history report before you purchase, no matter which used auto dealers you use. You should also have the vehicle inspected by a mechanic before you sign any contract.
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Saturn car models presently make some of the most affordable vehicles in the General Motors family brand; the Saturn division includes minivans, SUVs and regular cars. The reduction in fuel consume combined with the good price represent essential elements that count on the Saturn car market. This manufacturing tendency was adopted by General Motors as a marketing strategy to gain market preminence over the fiercest competitor: Japanese car producers. Thus, General Motors came to sell low-priced Saturn car models at the beginning of the 1990s; then, this new division attracted the public attention by the very customer friendly services.
The S Series are the Saturn car models to first impose themselves on the market in their complete array of coupes, sedans and wagons. They distinguished themselves even within the varied GM classes of products by the use of revolutionary special platforms and plastic panels included for a superior durability and resistance against denting. The entire Saturn car division was produced in a single plant in Tennessee. Back in the 90s these vehicles made the best fuel savings of the moment with a forty miles per gallon consume for manual transmissions. Then, from model to model, a Saturn car brought somewhere between 85 and 124 horsepower.
The new millennium didn’t bring much novelty in the Saturn car design; the interior was given more attention in terms of good looks, but the Saturn brand seems a bit neglected by the mother company. With dropping sales getting the leaders’ attention, General Motors eventually decided to move in the direction of creating a new Saturn car division: the L Series. The basis for the project was the sedan as a means to rekindle the public interest in Saturn car models; the Ion and the Vue got the challenge of impressing the market together with the hybrid green Saturn car.
Significant improvement is visible in the Saturn cars of today and those to have started the Saturn history. If plastic panels had been such a success in the past, they are now history and replaced by the new steel body panels that are considered both safe and conventional. Moreover, any modern Saturn car could bear the the similarity with the European GM models like the Opel. Some car owners have reproached the loss of the identity and the trendy polishing of European cars, but generally speaking, one cannot forget or neglect the serious standard level increase made not only in design but in quality and refinement too.