"Test Your Car Buying and Financing IQ"

There are some basic questions that anybody looking for a vehicle and/or financing should know the answers to, and I don't mean "THINK" you know the answer, I mean "KNOW" the answer. Take this short test and find out if you really know the answers.

1. Am I really getting the best interest rate and loan terms that I qualify for?

2. What's the difference between a purchase and a lease?

3. How much should the used car I want to buy really cost? What's the true market value?

4. What is my present car really worth, and should I trade it in or sell it myself?

5. How can I be sure that my car salesman isn't just telling me what I want to hear?

6. The dealer suggested that I buy an extended warranty; should I, and if so what should it cost?

7. Where is the best value: in a new car or a used one?

8. I went to my bank to get an auto loan and was denied. Will a dealer be able to help me?

9. I went to a dealer that advertises "In House Financing"; will this help me rebuild my credit?

10. I hate the back and forth haggling when I buy a car. Is it possible to buy a car without all the haggling?

11. I need to buy a car; am I better off buying from a private party seller?

12. I'm considering a new car purchase and the dealer has offered to sell me the car at invoice. Is this a good enough deal?

13. How much down payment will I really need to finance a car?

14. Why is the dealer telling me that I'm approved for a $450 car payment, when I know I can only afford $250?

15. I just bought a used 2 year old car and it breaks down constantly; isn't there a lemon law that I can use?

16. I leased my car for 48 months; now, 2 years later, I would like a new vehicle. Am I stuck in this lease?

17. I have a low credit score and a credit repair specialist has recommended that I apply for an Employee Identification Number from the IRS and start using it in place of my social security number. Should I do this?

18. I bought a car a couple of weeks ago and now the dealer is telling me that the financing didn't go through. Do I have any rights here or do I have to return the vehicle?

19. I can't afford my car payment, but a friend of mine can. Can I simply turn over the car to my friend and let them make the payments.

20. I recently filed bankruptcy and will have a discharge letter shortly. I need to buy a car; will I have any hope of financing or will I be forced to drive a car that my small down payment will pay for?

How did you do? I'll bet that you'd be surprised at the real answers to the questions you're sure you got right.

If you can't answer, without any doubt, all of the questions that apply to your situation, then you're making a big mistake if you buy a car without first reading "The Insider's Secrets".

My name is Gary McClure; I am the author and a 30 year expert in every aspect of the automobile and financing businesses. You will find the answers to all of these questions and any others you might have in my book "The Insider's Secrets" or at my website. http://www.theinsiderssecrets.net/

Games the Auto Dealer Wants to Play

Auto dealers don't play these games for fun, they play them for profit. You don't h8ave to play the game, but you should definitely know the rules. From the minute you set foot on a dealership, sales personnel will start playing a game called "the steps to the sale". It begins with the "meet and greet" and continues with "building rapport, gaining trust and qualifying" right through to the "demo and write-up".

The game is putting you on this path and keeping you there until you drive away in their car. Your best chance at getting the vehicle you want, at a fair price, is to get off, and stay off, this well rehearsed path. Knowing the rules will save you time, aggravation and, most importantly, money.

Rule #1:
Don't tell the salesperson anything but your name. Believe me when I tell you that every single piece of information that you give your salesperson will help to lead you down the path to profit. Any good salesperson has been highly trained to probe for "hot buttons" and to use trial closes. The salesperson makes his, or her, living asking you questions. Don't play this expensive game.

Rule #2: The salesperson is NOT your friend. Don't buy into this trick for even a second. Every salesperson has been trained to do whatever it takes to convince you that the two of you are best buddies. The belief is that you will be more willing to follow your new buddy down the path to a sale. No salesperson gets paid to make friends, they get paid to sell you a car and they get paid a percentage of the profit. The higher the profit, the higher the commission. If you really do like your salesperson, you can become pals AFTER you buy your car!

Rule #3:
Don't feel bad about "misleading" your salesperson. If you remember rule #1, then you know not to tell your salesperson anything, especially how you intend to pay for the car you decide to buy. ALWAYS act as if you intend to pay cash (or write a check) for whatever car you decide to own. This is critical and might be the single most important piece of advice to follow. Once you find the car of your dreams, negotiate with the assumption that you will be paying cash for the vehicle. Not until you have settled on a price do you announce your intent to finance. This strategy keeps the focus on price and off of payments. Everything about the negotiation process is designed to get your attention off price and onto payment. This is absolutely a game you cannot afford to play. Don't feel bad if your salesperson accuses you of being "misleading" because he certainly has no intention of apologizing for any attempts to "mislead" you.

Rule #4:
New car buyers have to know about every rebate available. Once you have decided on the new vehicle you want to purchase, ask to see the dealer invoice. And in case you're wondering; in my 30 years in the business I have never once seen a fake invoice. Once you have the invoice, make sure you know what, if any, consumer rebates you qualify for. Besides the advertised rebates, most manufacturers also have a number of unadvertised rebates, such as; loyalty, military (active and retired), vendor (affiliates and suppliers), associations (farm bureau, national education assoc., etc.) and even employee discounts (some manufacturers apply these discounts to immediate family members). The dealer should be willing to give you information on any of these unadvertised rebates, but just in case he doesn't, you should be able to find them through the manufacturers' website or by checking with the regional sales office. Once you have all of the consumer rebate information you should find out if the dealer has a rebate coming. Known as dealer cash, most manufactures reward their dealers with incentives to help move aging or slow selling inventory. You can find these rebates in The Automotive News (The central branch of my city library has a subscription and I can find issues in the reference section) or at Edmunds.com. You should be able to combine any rebates, consumer and dealer, to make your best deal. If you are financing for more than 2 years and the rebate is a choice of cash back or a low interest rate, be sure to do the math before deciding which offer to take. Don't always assume that the cash rebate is the best way to go.

Rule #5:
Used car buyers should ignore the window sticker or asking price.
You don't need the dealer to tell you what a used vehicle is worth. There is so much information available on the internet that you should know exactly what any vehicle you're trying to buy, sell or trade is really worth. If a dealer is asking more, it simply means he paid too much or is set on making a substantial profit. You can find values at KBB.com, NADAguides.com and Edmunds.com, to name just a few. Most will give values for a number of scenarios; KBB gives a trade, private party and retail price. A fair market value would be something between trade and private party. Auto Trader magazines are a good source of comparables and employ a mix of dealer and private ads. The asking price won't be much help though; you should call and see what a vehicle sold for to get a sense of the real market value. Ask to have any vehicle you're thinking about buying inspected by an independent mechanic; if a dealer has a problem with this, find a new dealer.

Rule #6:
If you're financing, make sure that the interest rates and loan terms you sign up for are the best that you really qualify for. If you have good credit, get yourself pre-approved before you get to the dealership. Check with your bank or credit union as well as online lenders. You can find a list of online lenders in my book and on my website. If you get to the dealership and find lower rates available it's still your option. If you have poor, or no credit, you are at the greatest risk of paying too high an interest rate. You will most likely be offered what is easiest or most profitable for the dealer. While a bank or credit union probably won't be much help (unless you have a very strong co-signer) there are still many options available on the internet. Again you will find a list of online lenders in my book or on my website.

Rule #7:
The Business Office isn't just the place where you sign your paperwork. The real function of the Business or Finance office is to sell you products and financing. The dealer can make significant profits marking up the interest rate, so ask to see the approval from the bank. Products offered will range from warranties, window etch, interior and exterior protectants to Gap, credit and life insurances. Many dealers make more profit in the Finance office than they do selling the cars. Be careful here and don't fall for common tricks such as "menu selling" (products are presented as packages and you are given choices of packages that you can afford), and "payment packing" (the payment you agreed to in your negotiations is more than what it would take to just buy the car, leaving room for the products presented by the Finance manager to seem more affordable). The best way to see the real cost, or payment effects, of any products or packages offered is to have the Finance manager print a contract with NONE of these present and then another contract with the added products. Make sure the vehicle price, interest rate and loan term are the same on each contract. (It's easy to trick someone into believing that a product or package adds very little to the payment by extending the loan term or lowering the interest rate) Remember also, that while banks will finance these products and packages, they are NEVER required to obtain an approval and DO NOT affect the interest rates or terms. If your finance manager implies that purchasing ANYTHING offered will increase your odds of a loan approval or will lower the interest rate, he is committing a crime. If this happens to you, have the finance manager write this out for you and take it to the owner of the store and ask for your name to be added to the sign on the building. Big No No.

There is so much more specific information for you to know before you purchase your next vehicle, much more than I could give you in this short space. I encourage you read my book or visit my website to prepare yourself completely, and save yourself thousands of your hard earned dollars, each and every time you buy a car.

Thinking of Using a Credit Repair Specialist to “Fix” Your Credit? Think again.

Credit repair companies or "specialists" are popping up all over the country in the last few years, so many in fact that Credit Repair Organizations Act (CROA) was passed in 1996 to protect and advise consumers of their rights when using a credit repair specialist. I strongly suggest that you refer to the CROA before entering into any contract with a credit repair company. Some of these specialists may actually provide what would seem to be a valuable service, but in fact don't really do anything that you couldn't do for yourself, for free. Every consumer is allowed to question errors and misinformation that they find in their credit files. Credit repair specialists simply contest these errors on your behalf. There is no magic involved and no special training, skills or tactics are needed.

There is a real danger, however, in using the advice that a lot of these "specialists' dispense. Some of them will actually advise you to commit a crime in order to "clear" your credit. The crime is committed by suggesting a tactic referred to as "file segregation". File segregation is the act of obtaining an Employee Identification Number (EIN) or an Individual Taxpayer Identification Number (ITIN) and using it in place of your actual Social Security number. Sounds like a great way to make a fresh start, but it's ILLEGAL, and the consumer taking and using this bad advice is committing a federal crime and could be subject to fines or prison. It won't help that they didn't know any better.

The most common technique used by credit repair companies entails taking advantage of a right afforded by the Fair Credit Reporting Act. The FCRA states that the credit repair agencies have 30 days from the time they receive notice of a disputed account to either confirm, correct or remove the disputed item. While this is true, there is another clause that allows a creditor that has missed this deadline to simply resubmit the information, without notice. And, because the credit repair specialist tries to bombard the creditors with these dispute letters in hopes of a missed deadline, creditors are allowed to ignore disputes that it considers frivolous. If you really have an error or misreporting account on your credit report, you can take the steps to correct or remove it yourself. You can find a sample dispute letter, along with specific instructions and addresses to all three of the major credit reporting agencies in my book "The Insider's Secrets".

Your Legal Rights

The Fair Credit Reporting Act guarantees your right to dispute inaccurate information in your credit report free of charge, so if any of the problems you've had are due to inaccurate information, you can file a dispute with the nation's major credit bureaus to have it corrected or removed.

If the information is accurate, however, you'll need to focus on building better credit for the future rather than trying to have it removed from your report. Most lenders are primarily interested in your payment patterns for just the past few years, so if you begin now to pay every bill on time it will have a positive impact on your credit relatively quickly.

Only time and establishing a positive credit history can legally "clean up" your credit. One of the best first steps to getting your credit back on track is seeing what is on your credit report. This way, you can take steps to correct any inaccurate information that may be contained on your report and, at the same time, assess your current credit debt. The next step might be to contact old accounts that carry outstanding debt and arrange payment plans. As you begin to manage your debt successfully, you will also want to work on rebuilding your credit.

Many banks offer secured card cards, which are guaranteed by a deposit you make with the card issuer. Your credit limit will be equal to the amount on deposit.

Pay your bills on time! It seems obvious, but paying your bills on time is the best way to build a solid credit history.

Review your credit history. Many credit reports contain inaccuracies, usually caused by innocent errors. The Fair Credit Reporting Act ensures your right to dispute such inaccuracies in your credit report without charge.

You'll find specific help with every one of these remedies in "The Insider's Secrets" our complete and comprehensive guide to buying and financing a car. We have included a number of chapters on credit, credit scoring, and credit issues. We even offer a sample dispute letter and the physical and web addresses of the three credit reporting agencies. You can find our book and more information on every aspect of the car buying and financing process at our website.

“No Credit Application Refused”

We've all seen those advertisements that promise auto financing for everyone. What you don't see is the real truth behind these ads. No auto dealer is ever going to "refuse" a credit application, there's a big difference between accepting and approving a credit application.

It might surprise you to learn that the auto dealer's most profitable customers are usually those with "sub-prime" credit, and they stand a better chance of maximizing that profit if they can control the finance process. The "credit challenged" advertiser specializes in buyers with perceived or real, credit difficulties and auto dealers are experts at making consumers feel credit challenged, even when they're not.

Dealers hate giving up the control they work so hard for and aren't likely to tell you of more favorable, outside (indirect) finance options, and for a number of reasons. The biggest reason being; outside financing eliminates the finance process as a major source of dealer profit.

Dealers who advertise for credit challenged consumers are specifically equipped to take advantage of this niche and will have inventory and sales staff trained to capitalize on that consumer. If a dealer's primary advertising message is directed at those with credit difficulties, expect that dealer to be very adept at taking advantage of that market.

If you have a television set, then you've undoubtedly seen car ads and infomercials directed at the credit challenged consumer. We've all seen auto dealers make this statement:

"We guarantee financing to anyone the law allows"

The only law I'm aware of deals with the age of consent. (You have to be 18 or legally emancipated to finance an auto) These ads promise low down payments, low monthly payments and approvals for all. You see testimonials from happy customers, telling you that they have the worst credit ever (almost always paid actors) and showing off their dream car. You hear stupid statements like, "no credit application refused". Why would anyone "refuse" a credit application? The truth is, they wouldn't and don't.

Lenders DO NOT advertise this way! What you're really seeing, in most cases, is produced and paid for by a local auto dealer or group. The rest are paid for by companies whose only intent is to sell the "lead"
(you and your information) to dealers in your market area. These ads aren't meant to get you approved, they're meant to get you into a dealership. There's very little likelihood that responding to one of these ads will result in anything more than a phone call from a local dealers sales staff.

Once at the dealership, you'll be treated just as if you had never seen the ad and had just walked into the dealership. Most salespeople will tell you whatever you want to hear to get you into the dealership. Lenders won't consider, or approve, unsigned applications and dealers aren't allowed to check your credit without signed consent. Ignore this type of advertising and trust your better judgment. My book, "The Insider's Secrets" will educate and prepare you to buy and finance a vehicle without having to put up with any of these deceptive tactics.