used car buying guide

32
TM Summer 2004

Upload: dealer-solutions

Post on 07-Mar-2016

232 views

Category:

Documents


0 download

DESCRIPTION

Used Car Buying Guide Revised 12/09

TRANSCRIPT

Page 1: Used Car Buying Guide

TM

Summer 2004

Page 2: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 2 2007

This publication is

sponsored by

PRODUCED BY

INDEPENDENT DEALER

SOLUTIONS

DISCLAIMER: This publication is recommended as adequate for those who want to know how to buy a used car. It is intended as a

guide for general information. You may wish to consult other information resources or legal counsel for any professional advice you

may need. All parties hereto provide no guarantees or advice as to the accuracy of the information provided. All information may be

subject to change.

©2007. THIS MAGAZINE IS DESIGNED AND PUBLISHED BY NEWSLETTERS INK CORP. 1.800.639.0465

This publication is

sponsored by

PRODUCED BY

INDEPENDENT DEALER

SOLUTIONS

&

DISCLAIMER: This publication is recommended as adequate for those who want to know how to buy a used car. It is intended as a

guide for general information. You may wish to consult other information resources or legal counsel for any professional advice you

may need. All parties hereto provide no guarantees or advice as to the accuracy of the information provided. All information may be

subject to change.

©2007. THIS MAGAZINE IS DESIGNED AND PUBLISHED BY NEWSLETTERS INK CORP. 1.800.639.0465

Kevin R. Gallagher

801.796.7700www.utahautosales.com

Page 3: Used Car Buying Guide

“For those who want to make the BEST buy!”

3 USEDCARBUYINGGUIDE2007

What can this

Used CarBuying Guide

It will take the fear and

risk out of buying a used

car.

The goal of this publication is to

ELIMINATE your FEARS, and

put the FUN back into buying a

vehicle.

We will show you what TO

do and what NOT to do when

buying a used car.

do for you?

Let us assist you:1. Avoid getting into a vehicle that is NOT right for you.

2. Become informed so you can make the BEST buying decision possible.

3. Become an educated buyer - and reduce the risk for banks, credit unions and Þ nance companies.

4. Evaluate value and security of buying from an independent dealer vs. a new car dealer or private party.

Page 4: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 4 2007

BUYING RIGHT

How many times will you make

these two buying decisions in

the course of your lifetime?

is something to be

HOMES:Investing in a home is just that...an investment. You want to buy right and the property usually

appreciates while you own it.

VEHICLES:Most people will purchase 20-40 vehicles in a lifetime. Because they are depreciating necessities, they

can gobble-up lots of money in a lifetime.

You don’t want to pay more than you should for your vehicles because each vehicle purchase will

depreciate every month that you own it.

LEARNED

Your Your

VEHICLESHOMEAPPRECIATING

ASSET:

Homes: You

may buy (1-3) in

a lifetime.

DEPRECIATING

NECESSITY:

Vehicle: You

may buy (20-40)

in a lifetime.

Every consumer makes 2 major buying decisions

Homes: You may buy (1-3) in a lifetime

Vehicle: You may buy (20-40) in a lifetime

Appreciating Asset

Depreciating Necessity

Your Vehicles

Your Home

Page 5: Used Car Buying Guide

“For those who want to make the BEST buy!”

5 USEDCARBUYINGGUIDE2007

� Why is the YEAR of the vehicle a critical buying factor?

� What is the MILEAGE and CONDITION of the vehicle? They affect depreciation.

� Is the PRICE in alignment with the condition of the miles of thevehicle?

� What FINANCING options are available to you?

� Where should you BUY your vehicle? Whatare the RISKS andREWARDS?

Buying the RIGHT vehicle

means buying...

1. At the right TIME

2. With the right MILEAGE

3. At the right PRICE

4. With the right FINANCING

5. At the right SOURCE

Page 6: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 6 2007

4. Buy with the right 4. Buy with the right

1. Buy at the right1. Buy at the right 2. Buy with the right 2. Buy with the right

FINANCING3. Buy at the right

PRICE

5. Buy at the right

SOURCE

TIME MILEAGE

5. Buy at the right

SOURCE

3. Buy at the right

PRICE

TIME

We will take each of these

puzzle pieces ...

and

discuss them

in the pages that follow.

MILEAGE

FINANCING

Page 7: Used Car Buying Guide

“For those who want to make the BEST buy!”

7 USEDCARBUYINGGUIDE2007

Since the YEAR of the vehicle remains constant, knowing

the right years to buy and sell your vehicle can be your

Biggest Savings factor.

It is especially the case with

buying vehicles.

Have you ever heard of the saying,

“Timing is Everything?”

Buy at the RIGHT TIME.

Page 8: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 8 2007

Buy at the

RIGHT TIME.

This graph shows TWO factors affecting the best time to buy!

The Window of Opportunity is the shaded area representing the optimum time to

purchase a newer-model used vehicle.

When most Lease/Fleet/Rental vehicles are 1-3 years old they are sold at dealers-

only auctions all across the country.

When this happens in mass volume, the supply increases causing prices to drop.

- This is the best time to buy that vehicle.

Later, as fewer of those particular types of vehicles are available on the market,

the VALUE of that vehicle will stay relatively LEVEL for the next 3-5 years.

Page 9: Used Car Buying Guide

“For those who want to make the BEST buy!”

9 USEDCARBUYINGGUIDE2007

Buy with the RIGHT MILEAGE.

Condition and mileage affects depreciation.

The Auto Industry Standard for yearly average mileage is 15,000 miles per year.

15,000 miles x 2 = 30,000 miles, which is exactly when most Leases/Fleet/

Rental cars are sold at dealer auctions.

Most of these vehicles are still under Factory Warranty, thus increasing their

value. Some powertrain warranties are as high as 10 years/100,000 miles.

Question: Do Time and Miles remaining on a factory warranty increase the

value of the vehicle?

Answer: YES! There is less risk to the buyer when they are purchasing a

vehicle with some factory coverage left.

You can expect to pay $2,000-$4,000 more for a vehicle for ANY factory coverage

remaining. This is WHY most Lease/Fleet/Rental companies dispose of their vehicles

JUST BEFORE the factory warranties expire because they get more money.

MILEAGE DISCLOSURE: Mileage disclosures are required for every vehicle up to 10 years old. The mileage must be disclosed in writing on the title document or attached documents. A vehicle cannot be sold by anyone without a working odometer.

Here are ways that mileage affects depreciation:

Page 10: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 10 2007

The following chart

shows 3 major drops

in a vehicle’s

value - ALL are based upon mileage.

Just like the Stock Market, the best time to buy a vehicle is just AFTER the

price DROPS!

Take advantage of this knowledge by:

BUYING: Just after a dramatic DROP in value, and

SELLING: JUST BEFORE THE NEXT drop.

Buy with the

RIGHT MILEAGE.

* These drops in price are in addition to the normal depreciation.

Page 11: Used Car Buying Guide

“For those who want to make the BEST buy!”

11 USEDCARBUYINGGUIDE2007

Buy at the RIGHT PRICE.

Fair Value is greatly affected

by the vehicle’s condition!

“The bitterness

of poor quality

lingers long

after the

sweetness of a

cheap price is

forgotten.”

— Anonymous

To understand the market value, you need to understand the book value.

Start with the book value, such as NADA, Kelley Blue Book,

Black Book or a book that is used in your state.

+/- Add-ons

+/- Mileage

- condition of vehicle

= TRUE FAIR VALUE

Page 12: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 12 2007

Buy at the

RIGHT PRICE.

You can determine the condition of a vehicle by using our

Vehicle Condition checklist at the back of this book (page 29).

The condition of the vehicle can be your

Biggest Negotiating Factor.

Compare PRICE,

against overall CONDITION,

&

against the BOOK VALUE,

...Then NEGOTIATE!

Page 13: Used Car Buying Guide

“For those who want to make the BEST buy!”

13 USEDCARBUYINGGUIDE2007

“Price is what

you pay. Value

is what you get.”

— Warren BufettBuy at the

RIGHT PRICE.

If you purchase a vehicle “As Is” you accept it in the condition that it is in. This

typically means that you are responsible for all repairs and maintenance.

If a customer experiences a mechanical breakdown many times, dealers will

provide a goodwill service. Because they value you as a customer, they may help

you with some repairs. The vehicle will still be “As Is.”

The FTC Buyers Guide will disclose any warranty offered by the dealer. A

warranty will cover certain components of the vehicle for a specific time and

mileage, (i.e. 12 month 12,000 miles).

Service contracts are available for an additional cost and are similar to a

warranty covering certain components for a specific time and mileage. Read

carefully any exclusions and limitations. Know what your responsibilities are for

service and maintenance.

“As Is”

vs.

Warranty

Page 14: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 14 2007

There are 7 factors to consider when

financing a vehicle:! Price

" Taxes, license, registration,

and document fees

# Interest rate

$ Term of the loan

% Credit worthiness

& Trade in

' Add-ons

! Price: The price is the actual cost of the vehicle that you have negotiated with the dealer. Price

can vary greatly. An industry guidebook can give you an idea of price but may not be accurate

due to many variables.

" Tax, license, registration, and document fees: These are the fees added to the cost of the

vehicle to get the vehicle registered and licensed in your name with the State. All license and

registration fees are standard and should be the same for every dealer with the exception of

Dealer Document fees, which can vary from dealer to dealer. The document fees cover the costs

of processing all documents and title delivery requirements.

Buy with the RIGHT FINANCING.

Page 15: Used Car Buying Guide

“For those who want to make the BEST buy!”

15 USEDCARBUYINGGUIDE2007

Buy with the

RIGHT FINANCING.

# Interest rate: This is the percentage rate that banks, credit unions or Þ nance companies charge

you to borrow the money you need to purchase the vehicle. This rate is determined by two things:

a. The year of the vehicle: The newer the vehicle, the lower the rate.

b. Your credit: The better your credit, the lower your interest rate.

When negotiating with the dealer, understand your credit, and be sure you are getting the best rate.

Most dealers have an arrangement with their lending institutions to receive a small percentage of

the total rate as a commission to process the loan document.

This is also another place to negotiate with the dealer! Be sure you pay the rate your credit deserves.

$ Term of the loan: This is the total number of months that the bank, credit union, or Þ nance

company will be willing to lend you the money, generally 60-72 months.

This is the biggest factor affecting your monthly payment. The longer the term, the lower your

monthly payment will be. Conversely, the shorter the term of your loan, the more you will have to

pay each month.

The lending institution determines the monthly payment you will qualify for once they see your debt-to-

income ratio — All your Þ xed monthly payments divided into your total gross income.

“Capital can do

nothing without

the brains to

direct it.”

— J. Ogden Armour

Page 16: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 16 2007

Buy with the

RIGHT FINANCING.

% Credit worthiness: What does a bank, credit union, or Þ nance company

generally look for as an average minimum credit history?

• One year job experience or same line of work for more

than one year.

• 3 credit references (minimum 6 months old with no late payments)

• Your debt-to-income ratio should not exceed 40 percent.

Most common credit report problems that prevent buyers from getting approval are:

!(No credit is established - see Appendix A: Establishing Credit. (page 27)

" 30-day late payments - Don’t be late on loans! All delinquencies will

stay on your credit for 7 years. Just one derogatory report can greatly affect

your credit score.

# Collections - All collections must be paid before new loans will be

granted. Avoid these problems like the plague.

Once you have established credit DON’T LOSE IT!

It will haunt you for many years. Buy on credit ONLY if you

can comfortably make your payments - this is one case where

bigger is NOT better.

Page 17: Used Car Buying Guide

“For those who want to make the BEST buy!”

17 USEDCARBUYINGGUIDE2007

& Trade in: This is the amount of money that the dealer is willing to allow for the vehicle you

are trading in. It is important to remember that the dealer is buying your vehicle to resell to

someone else. You should not expect them to buy your trade in for any more than whatever they

could sell it for.

Reasons to trade a vehicle:

a. You will receive a tax savings on your new purchase.

b. You will not have to try and sell it on your own.

Tips for trading-in a vehicle:

a. First, negotiate the price of the vehicle you want to purchase before telling the dealer you have

a trade-in.

b. Be sure your trade-in is clean - remember you are trying to sell your vehicle.

c. Know what your car’s loan payoff is before going to the dealer.

d. Know what the “market price” is on your trade-in, and what you could sell it for.

e. Some dealers may offer you a trade/consignment program. This allows you the tax savings of

your trade-in that goes towards your new vehicle while possibly getting more money on the

sale of your vehicle when the dealer sells it.

f. Remember a vehicle’s value has a lot to do with its ability to be Þ nanced, keep that in mind on

your trade in. Vehicles older than 6 years old have a tougher time getting Þ nanced.

Buy with the

RIGHT FINANCING.

Page 18: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 18 2007

' Add-ons:

A. GAP Insurance: GAP Insurance is important to consider. In the event that you “total” your

vehicle, or it gets stolen and not recovered, your full-coverage insurance will only pay you

a percentage of the full value of the vehicle - leaving you with a loan balance to pay off. This

balance can range from $1-$7,000. GAP Insurance pays the loan off (up to 150 percent of retail

book value) and may provide you $1,000 towards the purchase of another vehicle.

B. After Factory Service Contracts: Many 3rd party service contracts are available. Be sure

to Þ nd one that covers as much of the major mechanical components as possible. You also want

to do some homework and Þ nd out if they are insured and how well they pay their claims. Read

the contract carefully and ask questions.

C. Credit, Disability, and Life Insurance: This insurance will pay off your car if you become

disabled or if you die. This is important to consider if your car payment would create a Þ nancial

burden to your loved ones.

“Whatever you

have, spend

less.”

— Samuel JohnsonBuy with the

RIGHT FINANCING.

Page 19: Used Car Buying Guide

“For those who want to make the BEST buy!”

19 USEDCARBUYINGGUIDE2007

What happens if your vehicle is repossessed?

• The late payments will show on your credit report.

• The collection will show on your credit report.

• The judgement will show on your credit report.

• The garnishment of your wages will show on your credit report.

• The repossession will show on your credit report.

AND you’ll still owe the remainder of the loan. IT’S NOT WORTH IT!

REPO - Repercussions!“The Repo-cycle”

Many say, “I

wouldn’t have

done it, if only

I would have

known.”

Your credit is shot30,60, 90-day late

Repossession

Judgement

Garnish Wages

Still Owe Debt

No Car

Buy with the

RIGHT FINANCING.

Owe The Balance 30 Days Late

Sell Car - Auction 90 Days Repo

Page 20: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 20 2007

Buy at the RIGHT SOURCE.

WHERE TO BUY:You have two options - to buy from an individual or a dealer.

Buying from an INDIVIDUAL:

ADVANTAGES:

A desperate seller may offer a better price.

An individual may not know the market value of their car.

A friend or relative may offer you a better deal.

You may learn the history if you are buying from the original owner.

DISADVANTAGES:

No assistance with Þ nancing.

Risky - no recourse if you have problems.

The vehicle emissions and inspection have to be done yourself.

You’ll have to wait in line at the DMV to get the vehicle registered.

No warranties or guarantees.

No trade-ins accepted.

May be stolen, rebuilt, or have odometer tampering.

No way to trace owner on open title.

If you purchase from an individual be sure to verify the owner is the person selling the vehicle. Check the title to be sure the seller’s name appears on the title. If their name is not on the title, it could be stolen, rebuilt or have other problems.

Page 21: Used Car Buying Guide

“For those who want to make the BEST buy!”

21 USEDCARBUYINGGUIDE2007

Buy at the

RIGHT SOURCE.

WHERE TO PURCHASE YOUR NEXT CAR:You can get a very different value for the same car!

Buying from a DEALER:

ADVANTAGES:

Larger selection.

Accepts trade-ins.

Licensed and bonded.

Warranties offered.

Vehicle emissions and inspections completed.

Licensing, registration, and plating done for you.

Offers many options to assist with Þ nancing.

Saves tax dollars.

DISADVANTAGES:

May still be risky. If you go to the RIGHT PLACE, and you know how to BUY RIGHT,

you can take ALL the risks out of buying from a dealer.

Page 22: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 22 2007

TO TRADE:How to get TOP DOLLAR from your trade-in:

Negotiate the new vehicle, THEN talk about your trade-in.

Do your homework - check papers and Internet for current market pricing.

Watch Out - Some dealers will offer you the “moon” for your trade, but be sure to check

how much more you are paying for your newly purchased vehicle.

OR NOT TO TRADE:Should you choose not to trade in your vehicle, here are some ideas that can help you market the

vehicle yourself:

Place an ad in the newspaper.

List your vehicle on a few websites. Generally it is quite inexpensive.

Clean and detail your car prior to showing it.

Make a list of the “best features.”

Establish a price that you will not go below and stick to it.

Put your car on a dealership’s lot on consignment.

Buy at the

RIGHT SOURCE.

Page 23: Used Car Buying Guide

“For those who want to make the BEST buy!”

23 USEDCARBUYINGGUIDE2007

Saving Time & MoneyUsing The Internet - Where to look

LOOKING FOR VEHICLES: KSLCARS.COM

Largest selection of dealers. AUTOTRADER.COM

Largest selection of individuals’ vehicles. EBAY

Very easy to use.

Links available to most dealers’ websites.

Updated daily.

LOOKING FOR INFORMATION: CARFAX

Most accurate & up-to-date vehicle history info. AUTOCHECK.COM

Easy to use.

Updated daily.

This site is used by many dealers and auctions.

LOOKING FOR BOOK VALUES: NADA.COM

Up-to-date book values on any vehicle. KBB.COM

Updated regularly.

There is a difference between NADA and Kelley Blue Book on vehicles!

This site is used by many dealers and auctions.

Buy at the

RIGHT SOURCE.

Page 24: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 24 2007

If the dealer does ALL of the above, only then have they EARNED “a shot” at your business.

You should know that dealers:

Are not alike.

Have different costs.

Have different overhead.

Have different philosophies.

Ask yourself: “Do they take the risks, or do YOU?”

� DO THEY have enough selection to get what you’re looking for?

� DO THEY attempt to Þ nd you the vehicle that you are looking for?

� DO THEY accept trade-ins? Reasonably priced?

� DO THEY sell their vehicles in relation to “Book” prices?

� DO THEY Certify their vehicles & guarantee their certiÞ cations?

� DO THEY Guarantee the vehicle after the purchase? How long?

� DO THEY offer an Extended Warranty? Reasonably priced?

� DO THEY offer you any Special Financing Options?

� DO THEY have any customers that you know, who are satisÞ ed?

� DO THEY allow you to return or trade the vehicle back in if you are not

satisÞ ed or Þ nd one cheaper somewhere else?

A Dealer should EARNyour businessThe Top 10 -Dealer QuestionsYou should know these answers BEFORE selecting a Dealer

Page 25: Used Car Buying Guide

“For those who want to make the BEST buy!”

25 USEDCARBUYINGGUIDE2007

MILEAGE2. Buy with the right

4. Buy with the right

1. Buy at the right

TIME

5. Buy at the right

SOURCE

FINANCING3. Buy at the right

PRICE

1. Buy at the right

TIME

5. Buy at the right

SOURCE

FINANCING3. Buy at the right

PRICE

Congratulations!You are now equipped

with knowledge that most

customers don’t have!

You are now prepared to purchase your next vehicle. If

you put together and implement ALL the puzzle pieces,

you will have a great-car buying experience - and you deserve it!

Be sure to use the Dealer Checklist on the previous page, and use the Vehicle

Condition Checklist that follows (page 29) - these are useful tools.

2. Buy with the right

4. Buy with the right

MILEAGE

Page 26: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 26 2007

Typical documents when purchasing

a vehicle.MOTOR VEHICLE CONTRACT OF SALE - Outlines the information about you, the vehicle,

and the purchase price. It should itemize all charges for the vehicle. It also declares who is

responsible for financing. You always have the option to finance or pay cash or the dealer

can assist you. Be sure to read all the terms on the front and back.

ODOMETER DISCLOSURE - You are entitled to see the mileage on the vehicle you are

purchasing. It will be on a title, reassignment of title, secure power of attorney or an

odometer statement.

PRIVACY NOTICE - This allows a dealer to collect non public personal information. This

can only be shared with those authorized businesses to complete the sale and service of

vehicles.

AUTHORIZATION FOR PAYOFF - Allows a dealer to receive information about your trade-in

and be able to pay it off.

APPLICATION FOR TITLE - This designates new ownership and how the vehicle is to be

registered. Always check for accuracy.

BUYER GUIDE - Declares any warranty offered or sold. As-is vehicles sold DO NOT have a 3

day right of return unless the dealer offers something different.

IMPLIED WARRANTY DISCLOSURE - All promises of performance or fit for use must be put

in writing. Any offers or declarations must be in writing. Any offers or declarations are not

enforceable unless put in writing Carefully review all paperwork and ask questions if you

don’t understand, take your time and do it right.

Page 27: Used Car Buying Guide

“For those who want to make the BEST buy!”

27 USEDCARBUYINGGUIDE2007

APPENDIX: AHow to Establish Credit

1. You need to get a loan or credit card

2. You need to make your monthly payments on time

It’s that simple…or is it?

THE BIG QUESTION: WHO WILL GIVE YOU CREDIT IF YOU

DON’T HAVE ANY CREDIT HISTORY?

Generally, you have a few options:

1. Most large furniture and appliance stores will extend credit to first time buyers with 50 percent down. An easy way to get

started is to buy something very inexpensive - $100 - $300. Give the 50 percent down and finance the balance. Your monthly

payment will be $10 - $15 per month. Be sure not to pay it off for at least 6 months to one year. This will give you a monthly

payment history on your credit report.

2. Go to your local bank or credit union and ask them for a secured credit card. Generally, most banks or credit unions will

issue a card against a savings deposit. This can be $300 - $1000 credit line on your card. Once you have the card, use it to

buy something. Then make minimum monthly payments for at least 6 months to a year. This will give you another monthly

credit history on your credit report.

3. Ask a parent or relative to add you to their next loan as a cosigner to them. This will not affect them in any way. However, it

will greatly help in establishing your credit, without you having to buy anything. CAUTION: Be sure they are making pay-

ments on time, or it will negatively affect your credit.

4. The only other option is to get a cosigner. Ask them to cosign for a limited time. They need to cosign long enough for you

to establish a payment history of 6 months to a year. Then refinance in your name only.

Remember, banks and credit unions are looking for a credit history of 3 or more accounts with a track record of payments

being made 6 months to one year. To get started establishing credit, use as many of the listed options at one time and then make

the payments on time.

CAUTION: Avoid first-time buyer high interest loans from companies that will finance anyone. These loans will generally be

set up so you will be paying 100 percent of the interest FIRST before you begin paying down any of the principle of the loan.

Page 28: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 28 2007

It takes some work, but it can be cleaned!

1. You need to get a copy of your credit report from all three credit agencies. Be sure ALL corrections and changes are made to

all three agencies at the same time.

2. Once you have your credit reports, review them to see what is showing up on your credit. If you dispute anything that is

either not correct or if something is listed that should not be on your credit report, contact each agency in writing. Follow up

every two weeks until you get a response from them. Generally, credit agencies will respond within 30 days. Once a credit

agency has confirmed that your dispute has been corrected in writing, take that copy and mail it to the other agencies so they

will remove the dispute from their records too.

3. If you have collection, charge offs, or judgments, they cannot be removed until they are paid. In most cases these are small

bills affecting your credit in a large, negative way. To have these removed, pay them off with a cashier’s check or money order.

Take a copy of your payoff and mail it to ALL three agencies with a copy of a letter you mailed with your payment to the

creditor. This letter should be a very kind letter explaining why you got behind and asking them to accept payment and have

it removed from your credit. Some will just list it as paid, while others will actually remove it totally from your credit report.

Be kind and persistent and they will remove it.

4. If you have a repossession or bankruptcy, these will generally remain on your credit for 7 – 10 years. The only thing you can

do is to write a letter of explanation as to the reason for the repossession or bankruptcy and mail it to all three agencies. They

will keep this letter in your file and will give it to future creditors upon request. You should also copy this letter and give it to

anyone you are asking to extend you credit.

YOUR CREDIT IS AN ASSET TO YOU! CLEAN IT UP AND KEEP IT CLEAN!

APPENDIX: CUnderstanding Your Credit Report

APPENDIX: BHow to Clean up Your Credit Report

Where does it come from? How does it work?

There are 3 national agencies:

1. Experian (formerly TRW) – P.O. Box 2002, Allen, TX 75013, 1-888-397-3742

2. Equifax, PO Box 740241, Atlanta, GA 30374-0241, 1-800-685-1111

3. Trans Union, PO BOX 100, Chester, PA 19022, 1-800-916-8800

Note: If you have something removed from your credit report with one agency, be sure to request the change of that same

correction with ALL 3 agencies.

Page 29: Used Car Buying Guide

“For those who want to make the BEST buy!”

29 USEDCARBUYINGGUIDE2007

APPENDIX: DVehicle Condition Checklist

Use the vehicle condition checklist to evaluate any used car you are considering to buy.

Remember, you are buying a used vehicle, NOT NEW. So don’t expect it to be perfect, or if you do – expect to pay full price.

However, use the checklist to find things you can use to better negotiate the price in relationship to the book value.

BASIC TIPS: � Always try to inspect the vehicle during the day when you can see more clearly. Never buy in the rain.

� Take time to perform an inspection to your satisfaction. Don’t hurry yourself or be rushed.

� Compare the price against the overall condition and book values.

� Test drive with the radio off and listen.

EXTERIOR: � Check all the seams where doors and fenders meet to be sure they are even and straight.

� Check all the seams where the hood and trunk meet the fenders to be sure they are even and straight.

� Check to see if the car has recently been repainted by looking for signs of “over-spray” on the moldings. Also, check

the edges of the trunk to be sure they are the same color. Fresh paint may cover rust that will continue to erode.

� Check all the windows for cracks or chips.

� Check all the doors and locks to be sure they are all working properly.

INTERIOR: � Check the upholstery to be sure it is in good condition. Look for tears, stains, and burns.

� Check the dashboard and headliners for rips and tears.

� Be sure the seats adjust easily.

� Check all the window cranks, door locks, handles, dash controls, and similar items for missing knobs and buttons.

� Check all interior lights and dash bulbs to be sure they all work.

� Check the carpet condition to see if it matches the age of the vehicle.

� Check under the dash at the top of the carpet. Are there stains suggesting heater core or air conditioning leaks?

� Check in glove box for any previous owner information or service receipts.

� Check pedals, visors, and mirrors.

� Check all safety restraints to be sure they are working properly.

� Check all accessories, such as heater, air conditioner, audio systems, and alarm system to ensure each is working properly.

UNDER THE VEHICLE: � Check for fluid on the underside of the engine and transmission, at axle ends, at brake line connections, and on the

ground beneath the vehicle. Green fluid is usually antifreeze and reddish fluid is usually transmission, engine oil, or brake fluid.

� Check for any loose parts with the exception of exhaust pipes hung from flexible rubber “donuts.”

� Check to see if anything appears to be missing, such as bolts, clamps, brackets, or cables.

� Check to see if exhaust system parts are rusted.

� Check for marks from scrapes – this is an indication that the car has bottomed-out on rocks or pavement.

� Examine exhaust when the car is operating at normal temperature. Do you see white or blue smoke? A small amount

of steam or condensation is normal.

Page 30: Used Car Buying Guide

“For those who want to make the BEST buy!”

USEDCARBUYINGGUIDE 30 2007

PERFORMANCE: ASK YOURSELF THESE QUESTIONS

ENGINE: � Does the engine start easily?

� Does the engine stall at any time?

� Does the engine idle smoothly?

� Does the engine run smoothly during operation?

� Does the engine seem to lack power?

� If the vehicle has cruise control, do all the features work correctly?

� Do engine and other system warning lights appear?

� Does the engine diesel (continue running and sputtering) when shut off ?

� While driving, check odometer and speedometer to be sure they are both working properly.

� Drive the vehicle at freeway speeds to check for pulling and/or vibrations and wind noises.

TRANSMISSION AND CLUTCH: � Is the transmission shifting smoothly?

� On a manual shift vehicle, is the takeoff smooth – without grabbing or jerking?

� On a manual shift vehicle, accelerate hard in a higher gear (third or fourth) or while going uphill. If engine RPMs rise

without corresponding increase in vehicle speed, the clutch could be slipping. It may need to be adjusted or replaced.

� On a manual shift vehicle, try shifting to a lower gear when going slowly. Does the transmission shift easily without grinding?

4-WHEEL DRIVE: � Engage 4-wheel drive only on soft surfaces unless owner’s manual specifically says the feature can be used on hard surfaced

roads. On suitable surface, test-drive the vehicle forward and backward with the 4-wheel drive engaged.

� Does the vehicle shift smoothly in both directions?

� Turn tight corners to the right and left. Are there clunking sounds or other noises?

� Do the wheels bind or pull whether turning or going straight? A normal 4x4 will bind when turning.

BRAKES: � Apply the brakes several times at different speeds. Also try a sudden stop. Does the vehicle pull to one side or the other

when brakes are applied?

� Do the brakes stop the vehicle adequately?

� If the vehicle has antilock brakes (ABS), try stopping suddenly. Do the wheels lock? A pulsing brake pedal is normal.

� Does the parking brake hold firmly and release completely?

STEERING: � Does the vehicle pull to one side during normal operation?

� Is steering difficult at any speed?

� Turn sharply in both directions. Do you hear clunking or other noises, or feel rubbing or binding?

� Does the vehicle shake or vibrate while moving? Take the vehicle up to freeway speed for this test.

OTHER CONCERNS: � Are the miles “actual”, in excess of mechanical limits or odometer discrepancy?

� Does the vehicle have a clean title?

Knowing this information on any vehicle will help you negotiate your best price!

Page 31: Used Car Buying Guide

“For those who want to make the BEST buy!”

31 USEDCARBUYINGGUIDE2007

NOTES:

Page 32: Used Car Buying Guide

10 North State, Lindon, Utah 84042

801.796.7700www.utahautosales.com

A Division of Wayne Jones Co Inc. Since 1978

“Quality Solutions Dealers Trust”

www.idsinfo.com