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Buying a Replacement Vehicle

If your car is seized or you have to sell it because monthly payments are too high, you still may need a car for essential transportation. Here are tips on buying a safe, reliable, and affordable used car as a replacement.

Find Someone to Help You. Buying a used car can be complicated, stressful, and end up being a lot more expensive than you bargained for. Find someone to help you. The best choice is a non-profit that helps low-income families buy a car. Visit workingcarsforworkingfamilies.org.

Be Realistic About the Total Cost of a Replacement Car. Cars are expensive to buy and keep up. Be sure you can afford a used car in a particular price range, including financing, insurance, and repair costs. Otherwise, find a less expensive car or alternative transportation.

Shop for Financing Before You Shop for the Car. The cost of financing may end up being higher than the cost of the vehicle itself, particularly for families in financial distress. Your credit rating will increase your financing costs, and even more so “buy here, pay here” and other used car dealers may try to take advantage of you with unfair and excessive financing costs. Shop ahead for financing at banks, credit unions, or elsewhere. Look for the lowest possible “APR” or annual percentage rate for financing a used car in your price range, even if you later end up financing at a dealership.

Comparative shopping lets you know what rate is fair and what your monthly financing costs will be for a vehicle of a certain price, letting you know how much you can afford to pay for a vehicle. Keeping financing separate from the cost of the vehicle almost always helps in negotiating the car’s price, rather than having it hidden within a monthly payment amount.

Research Ahead of Time for the Vehicle Models and Years Within Your Price Range. After estimating financing and insurance costs, you should know how much you can afford for the vehicle itself, and can then research the reliability and quality of used car models and years in that price range. Consumer Reports is a valuable resource for used car reliability, and a one-month online subscription is available for $6.95, at consumerreports.org. When you find a specific vehicle model you like and can afford, there are two steps to take to check for hidden problems with that car as described below—check Internet sites and arrange for a physical inspection of the vehicle.

Using the Internet to Discover Hidden Defects in the Car You Are About to Buy. Millions of used cars that appear fine are unsafe or unreliable because they have hidden previous flood damage, major wreck damage, or unperformed safety recalls. Don’t rely on Carfax or Autocheck reports to protect you, as many dangerous cars have clean reports. Instead, follow these three steps.

Obtain the car’s vehicle identification number (VIN) (it is on the car and in paperwork), and enter it at Safercar.gov to get a free and instant online check for unrepaired safety recalls.

Do a Google search of the VIN—you will be surprised what may show up.

Use the VIN to check vehiclehistory.gov to see if the car has ever been declared a total loss, salvage or junk. This site is run by the federal government, and access is through private vendors for as little as $3.50.

The Best Way to Discover Hidden Problems: Obtain an Independent Inspection. Before negotiating with the seller over a car’s price, ask permission for an independent inspection, and walk away from anyone that refuses. Although an independent inspector will usually charge between $50 and $150, this is money well spent—obtain an inspection of the car for both body and mechanical issues before finalizing any purchase. Have someone with body experience look at the car—they can quickly identify signs of significant wreck, flood or other structural damage.

Avoid Costly Add-Ons—They Can Be Real Ripoffs.

Etching your VIN in the windshield, service contracts, GAP insurance, credit insurance, and almost anything else a dealer tries to add to the vehicle cost will be overpriced and unlikely to be worthwhile. Not only should you turn them down when offered, but carefully review the paperwork to make sure they have not been snuck in as part of the cost.