Sunday, July 13, 2008

Cars, cars, cars

SmartMoney's feed published numerous car stories at the end of the week. Here are a couple I picked up on.

Buying a new car, get 0% financing

I won't buy a new car. It's a waste of money because of the rapid depreciation of new cars, and I don't have the psychological need to drive a new car. For argument's sake, let's say I was going to buy a new car. I'd want 0% financing on it.

Currently, six major auto makers — including Chrysler, General Motors and Mazda — offer 0% financing, according to Most of the models that qualify, however, are gas-guzzling trucks and SUVs that dealers desperately want to clear from their lots. Try to find 0% deals on more popular European luxury models or Japanese compact cars and it will be an exercise in futility. "You won't find a single fuel-efficient vehicle [with 0% APR] unless it's struggling in terms of sales," says Wahl.
OK, I don't really want a gas guzzler, so I'd have to look high and low for a fuel sipper that is struggling in sales.
To qualify for the coveted 0% APR, you'll need a score of at least 680 and, in some cases, 700, says Terry Jackson, an automotive writer with [...]

As mentioned earlier, even if your credit score passes muster, you'll still need to afford a down payment of at least 10% in order to lock in that magical 0% rate. If your score is below 680, then forking over a 20% down payment can increase your chances of getting 0% APR, says Jesse Toprak, executive director of industry analysis at
Another piece of good advice in the story is to get pre-approved for a car loan from a bank, and then to use that pre-approval as leverage in your negotiations. It's always good to have leverage against the car salesman and to be able to walk away from their offer.

Buying a new car, cash back

There may be a choice between 0% financing and cash back. SmartMoney has this handy dandy online calculator to help in that decision.

Buying a new car, manufacturer to dealer deals

Admittedly, I'm a novice in car buying, but I hadn't heard much about manufacturer to dealer deals:
Often times, auto makers offer dealers financial incentives to sell specific models. In turn, the dealerships don't have to offer this money to the consumer. "It's the type of incentive that most dealerships won't even tell you exists," says Jackson. "The dealer can determine to pass it on to the consumer," or keep it for themselves. More often than not, dealerships will offer this incentive on a vehicle that's not selling well and that they're eager to move off the lot, rather than try to sweeten a deal on a popular car for a hesitant buyer, says Wahl.


The problem for car buyers is that manufacturer-to-dealer incentives often go unadvertised. tracks and lists such deals.
Here is the direct link to the rebates and incentives page on Edmunds. I had to provide my zip code so it could look up specific deals in my area. Then I had to click through a couple pages for specific vehicles. As an example, there is $1500 in dealer cash through 9/2/2008 on the Honda Element. That's good information to have in negotiations. is real blessing for car buyers.

Buying preowned

The next article that caught my eye was on buying a preowned vehicle. I'm planning to buy a certified preowned vehicle with my next car purchase.
Some certified preowned programs are much more comprehensive than others. Chrysler, for example, offers an eight-year or 80,000-mile warranty, roadside assistance and loaner car reimbursement, whereas Jaguar's warranty covers just six months or 10,000 miles and doesn't offer loaner car coverage, according to For a complete listing of programs, see
(There's another plug for Other salient points in the story: you'll pay up for a certified preowned car over a used car; and make sure the certification is a manufacturer's certification, not a dealer's certification.

Selling a used car

So what do I do when I want to unload a used car? Well, I plan on driving my cars into the ground, but for argument's sake, let's assume I want to get rid of a car before it's only useful for the scrap yard.
But here's a way to improve your odds considerably when doing it alone: Move your listing online. Millions of consumers are trolling auto web sites looking for competitively priced used vehicles. According to J.D. Power and Associates, 61% of people who buy used cars and trucks surf the Web during the shopping process. If you want to sell your car quickly and for a good price, it's time to park it on some of the most popular sites.
According to the article, the best sites are, and eBay Motors. The article also gives the tips of thoroughly cleaning the car before selling it, gathering all the car's service records and getting a vehicle history report.