Seller Beware!

Long time away from the blogging scene. With the holidays and hunting season in full swing, it's been a busy December and January. Alas, my hunting seasons are mostly over and the corners of my mind are again filled with all things auto retail.

And with that, another disturbing online scam is surfacing as told to me by good friend David Ruggles of the Ruggles Report.

In short, DO NOT trust the validity of any bank cashier's check without first verifying the funds with the distributing bank. With current technology, even a cashier's check is easy to forge and it is YOUR responsibility to verify its validity prior to deposit.

The cashier's check scam can occur with any online sale. However, the inherently high price of a vehicle lends this to remarkable exposure for those wishing to sell cars online.

In the case told to me by Ruggles, members of his Mercedes owners club in Las Vegas, who have posted cars for sale online (i.e. Craig's List, eBay, etc...) have received emails from foreign buyer's saying they saw the car online and it is exactly what they've been looking for. They are willing to pay full price and arrange for transportation.

They state they will send a cashier's check for the amount of purchase plus shipping. All the buyer needs to do is pay the shipping agent upon pick up and deposit the cashier's check in their bank account.

This all seems easy and quite reasonable.

DON'T DO IT! At least without dotting your I's and crossing your T's.

Be very suspicious of someone willing to pay your price in full without ever seeing the vehicle. Be aware of complicated stories about why they are willing to buy the vehicle sight unseen or if they don't make any effort to confirm the car's condition.

Otherwise, you may find yourself without your car and out the money you paid to the shipping company.

The Single Best Way To Save Cash On A New Car: Stir the Competition

We all know competition breeds lower prices but how can you use the internet to get the most out of your next new car purchase?

First you need to be aware of what is out there. Cars.com, AutoTrader, KBB, Edmunds, Manufacturer sites, Dealer sites - it can all be a little overwhelming.

When it comes to getting a great deal, kick out the Manufacturer sites. They provide a great starting point but do little for negotiation other than pointing you to your local dealer.

The Dealer sites are a hodge-podge collection of designs whose goal is to get you on the lot. After all, Dealers excel at selling face-to-face and there are very valid reasons why the buying public has such negative connotations of their local car dealer.

And then there are the "Informational" sites. Some of these provide actual inventory, some contain dealer advertisements. Yet they all provide access to pricing and allow you to "Get a Quote."

But there is a very real drawback to these sites - they are working an angle that is not necessarily in the consumer’s best interest. In addition to advertising revenue, they make their money selling consumer contact information to large numbers of dealers.

Under this model, the dealers can then contact you to “Give" you a quote.

Sounds good, right? Not when you really think about it.

Many of these dealers begin to send you voluminous emails and repeatedly call you (even when you indicate email is your preference). The goal of their online strategy is exactly the same as their more traditional radio & television advertising - THEY WANT TO GET YOU ON THE LOT!

And while there are some dealers who will actually give you a quote via email, these are far more the exception than the rule.

BUT EVEN THEN, you can still bet that the quote they give you is not their best offer.

Does this strategy sound good now?

Enter the newest way to shop for your next new car - AutoBidsOnline.com. AutoBids simplifies the negotiation process and works in the best interest of both the consumer and the dealer.

“How can they do that?”, you might ask.

First you have to look at it from the dealers’ perspective. For the last several years, dealers’ internet departments have been flooded with the online quote requests described above. Yet many of these requests are from nothing more than online tire-kickers or even 10 year old kids fooling around on the net. At best, dealers can only expect to make a deal with 8-9% of all online quote requests. Most are in the 2-3% range.

Imagine you are a car salesman whose livlihood depends on closing these type of leads. It's pretty troubling. And none of this is setting well with dealers who are struggling just to stay afloat. In fact, there is a growing trend of dealers dropping third-party internet leads altogether.

Now take a look at the AutoBids model from the consumer’s perspective. Unlike the other "Informational" sites, AutoBidsOnline charges its members a nominal one-time fee to keep their data private. Instead of "Getting a Quote," AutoBids members can "Set Their Price."

Dealers can then either accept the bid as-is, make a counter-offer or suggest another vehicle that may better fit the consumer’s needs. Either way, the dealer knows the consumer is a serious buyer and can be confident he stands a good chance of making a deal.

As you can now see, AutoBidsOnline greatly simplifies the car buying process. It creates a competitive environment that leads to a great deal for the consumer. And while the dealer may lose a slight amount of margin, his people are more productive, he has a much happier customer and he is free to turn his attention to the more profitable aspects of his business.

Lease Your Way Out Of Debt

It amazes me how so-called educated and informed writers still cannot see the forest for the trees.

I read yet another article in today's Dallas Morning News talking about how "many auto finance companies stopped offering (leasing)."

While this is true, you can still lease almost every new vehicle on the market and most pre-owneds three years old or less. That's right. You can lease pre-owned vehicles too!

In today's tightening economy, many are looking to free up cash to keep up with monthly bills. And while shunning your car payment completely makes sense for some, it is simply not practical for many.

So if you are going to have a car payment, why not look at a lease? Here is just one example:

A $30,000 new Altima with a 2.9% APR will cost you $662.70 per month. Compared to a similarly priced used car at 7.0% and its $718.38 payment, this is seemingly a no-brainer.

However, when you look at a 3 year lease, your payment of $513.32 is 23% less.

If you are the kind of driver who is always trading your car before you pay it off, you should really look at a lease.

Use the savings to pay down your higher-interest debt and enjoy a new car every three years to boot.

Now THAT is a no-brainer!

NOTES: For more information on great lease deals, look to our friends at D&M Leasing (www.dmautoleasing.com). Based in Texas, they lease hundreds of vehicles a month to customers throughout the US.

Is This a Good Time To Buy a Car?

In the current economic climate, there is a lot of speculation about the logic of buying a new car. After all, the economy is considered to be so unstable it is doubtful whether there are any good deals out there. It’s also questionable whether anyone but the seriously wealthy can afford to sign off on a major purchase at this time.

The interesting truth, however, is that we are not being entirely honest about the real issue. We are all asking whether we can get a good deal on a new car when in fact we are mostly wondering whether we can find the means to purchase a car in an affordable way. If you cannot get approved for a good car loan, it can be extremely costly to buy a new car. That is, unless you are well prepared.

The best outcome for a new car purchase is of course approval for a car loan with favorable terms.

This is easier said than done because of the uncertain economic climate. Auto repossessions have increased by ten percent along with car loan delinquencies, which are also on the rise.

The good news is that the problems of the housing market, setting the trend for economic troubles, do not necessarily translate directly to car loans. The collapsing of the housing market has definitely caused problems in the automotive sector but several significant differences between home mortgages and automotive financing mean that the problems do not exactly correlate.

Perfect credit is still perfect credit when it comes to auto financing. Anyone with stellar credit should have little trouble getting approval.

Those with less than perfect credit may not be rejected entirely, but they will find themselves receiving a response that they will need to come up with more of a down payment.

It is particularly important to have a budget and know what you can afford. You also need to know your credit score, scrutinizing the details to ensure that everything is accurate.

One of the best ways to combat the changes to the market is to get pre-approved for a car loan through a bank or credit union even if dealership financing is something that you want to consider. Anything you can do to put yourself in a stronger negotiating position as a "cash buyer" will help you.

Although the credit market is reasonably tight and car sales are low, waned consumer confidence is not going to last. The economy is always cyclical and just like anything else, defined by ups and downs. Consumers are going to need to borrow more responsibly and live within their means but there are still some great car deals out there!

Navigating the Trade-In Process

When planning your next car purchase, take some extra time to evaluate the trade-in process. This is the Achilles’ Heel for many buyers as they neglect to take into account everything involved in the trade.

One key is staying focused. Do not be dazzled by your new car, or your dream of getting that new car. Think about your trade-in and do not let its significance disappear as you negotiate with the dealer. They are in business to make money – just make sure they don’t make it all on you!

First you should consider selling it yourself. This will most always yield a higher return. However, many of today’s new car buyers just don’t have the time, energy or desire to do this effectively.

If selling it outright is not for you, spend an hour to get an actual appraisal for your trade. If you have a local CarMax, take it in and get a guaranteed appraisal from them. It’s painless. In fact, their prices are often higher than BlackBook trade values or what your dealer may be willing to pay.

If you don’t have a CarMax nearby, check with your local bank or credit union. Many of these institutions will offer an appraisal if you ask.

Take these appraisals with you and use them in your dealer negotiation. Also be sure to spend the roughly $100 necessary to fully detail your vehicle. A clean car will always bring more money.

The next thing is to keep in mind that many trade-ins offer a high source of profit for a dealership – but certainly not all of them. Keep this in mind as you shop your trade-in. Not every dealer will offer the same price for a particular car. Some won’t give you the top dollar because they have other similar cars or no demand for the make and model in your local market.

Nevertheless, emphasize you expect full credit for your trade-in. Write down the figure before you begin negotiations and stick to it.

Lastly, you need to be realistic throughout the trade-in process. Be firm about the value for your trade but keep in mind the dealer costs of accepting your trade. They incur very real expenses as a result of this process. They will need to insure, inspect, repair, service and detail your car to make it ready for resale.

In addition, they are not only accepting the resale risk of your car, they are also risking a no-sale. If the dealer cannot sell your vehicle in roughly 45 days, he will incur transportation, additional detailing, and auction fees. All of these weigh heavily on the actual profit a dealer will make on your trade.

Knowing what your vehicle is worth going into the negotiation is certainly important. However, recognizing the dealer’s risk in the transaction will help ensure you get the best deal possible.

Leasing Versus Buying: What Should You Do About Your Next New Car?

When you’re looking for your next new car, consider your lease versus buy options.

Leasing is often thought of in negative terms but for many, it is far from it!

Do you frequently trade in your car every three or four years? Are you interested in driving more car for less money? Do you neglect to service your car as it gets older, or worse, find yourself cash-strapped and not able to afford the increased maintenance required by older cars?

If you answered yes to any of the above, you should consider leasing!

After all, unless you pay cash for your car, you never really own it until you pay it off. The bank does. And with car prices rising, installment loans are being written for longer terms - often times as many as 72 or even 84 months.

Study the amortization schedules on these lengthy loans and you will see that it can be as much as five years or more before you are no longer “upside-down.”

“But I can’t lease, I drive too many miles,” is something I often hear from friends. Yet the fact of the matter is the impact of how many miles you drive per year is the same whether you lease, pay cash or use traditional finance. You will still be upside-down for approximately 60 months. If you choose to trade out of your car before then, you will take a hit on your trade-in value – regardless of your method of finance.

Lease Assumption is another option to consider. Sites like SwapALease.com put potential buyers with lease “sellers.” You can often pick up a near-new, previously leased vehicle with 8-36 months remaining on the original lease for pennies on the dollar.

Not interested in driving someone else’s car? Try an independent leasing company like D&M Leasing in Texas (www.dmautoleasing.com). D&M specializes in finding any make, any model and any style car for thousands of customers across the country. They leverage their buying power to provide customers with affordable leases without ever setting foot on a dealer’s lot. They can even arrange multiple test drives on the same day so you can compare similar vehicles at the same time!

Next to “buying” and trading a new vehicle every three to four years, leasing is often the more cost-effective option. In many cases, you can save as much as 40-50% off of a comparable installment loan.

When you are considering the “purchase” of your next new car, check out D&M and SwapALease. You’ll be glad you did!

Why You Should Hunt for Your Auto Loan Online…And Have It Ready Before You Start Shopping!

The advantages of getting your next auto loan online are pretty impressive. First of all, it can save you a lot of time. You can research your purchase and the interest rates for car loans online, which takes a lot less time than traveling from car dealer to car dealer to get the same information.

Another advantage is you can generally get the lowest auto loan rates from online lenders. Many online loan companies offer a means of comparing automobile loan rates from many loan company's websites.

With online auto loans, you generally do not have to pay any sort of processing or application.

Online auto loans also give you the chance to research what type of car you want to buy. You can find a good price for your chosen make and model, and review interest rates before you even consider approaching a dealer. You can almost always get a better deal when you have the facts and figures relevant to your situation.

Keep in mind another time saving tip: you should only have to fill out one loan application to apply for your auto loan online. You can send a single loan application to multiple dealers in no time at all and receive responses in no time.

You should, of course, take your time to review every response you receive, no matter how appealing it looks at first glance. Do not let anyone rush you at any stage of the car buying process, particularly at this crucial point.

Your auto loan (or lease) is absolutely crucial to whether or not you secure a good deal. Lose focus here and you will regret it. At least, your pocket book will.

By getting an auto loan online, you not only minimize the amount of time and effort required to get through the details, you also dramatically increase your chances of securing the best deal.

The College Grad’s Guide to Car Buying

Deals and incentives are available for many car buyers. Although there are many problems when you’re trying to buy your first car as a recent college graduate (i.e. you’ve only just got a job and you’ve got tons of student loans), it can be difficult to find a good deal unless you know where to look.

Fortunately, there are tons of special incentives for recent college graduates. Most automakers offer incentive programs for college grads. The little known specials are rarely advertised. Nevertheless, applied properly, they can lead to big savings on new cars.

Since most incentives aimed at college graduates can usually be combined with other incentives, they can be particularly beneficial.

Among the top deals for college graduates start with one or two packages for which full-time college students are also eligible.

In the past, Ford has offered a discount of $500 on select models of Ford, Lincoln and Mercury models. Toyota/Scion has offered a similar discount of $400 against the purchase of select Toyotas and Scions. The Toyota/Scion package even included one year of free roadside assistance.

Generally, students or recent graduates are eligible for these deals. It is necessary to provide proof of graduation or student status to qualify for the discounts.

Although the top vehicles and the best incentives vary from year to year, the top deals from 2007 to 2008 are quite representative.

The top ten deals for 2007 and 2008 were as follows:

1. 2007 Suzuki SX4 priced at $14,999.
2. 2006 Mitsubishi Lancer Evolution priced a t $28,679.
3. 2008 Scion xB priced at $15,650.
4. 2007 Kia Rio priced at $10,770.
5. 2007 Ford Escape Hybrid priced at $25,075.
6. 2007 Nissan Versa priced at $12,550.
7. 2007 Mitsubishi Outlander priced at $21,370.
8. 2008 Scion tC priced at $15,300.
9. 2007 Ford Mustang priced at $19,250.
10. 2007 Suzuki Grand Vitara priced at $19,379

Anyone who is still in college or who has recently graduated should specifically research deals for college graduates and students when it comes to auto loans. Since college is particularly expensive, it is definitely advantageous to be able to save any money you can on the purchase of a car. With student debts, the last thing you want is to increase what you owe. That said, college graduates and even many students need cars. Most college graduates need to have an attractive car to fit with a new job.

Searching for a car online at AutoBidsOnline, you should be sure to specify that you are interested in receiving information about any incentives for which you qualify based on your status as a recent college graduate or your status as a student.

You should also ask about financing in relation to any such incentives since many packages require you to use a particular organization for financing any auto loan if you want to qualify for any related discount.

Do's and Don'ts of Auto Finance

Paying for Your New Car: The Do’s and Don’ts of Auto Financing

It’s a sad truth but auto loans can go wrong. When it happens, it’s often the result of a problem during contract preparation in the finance and insurance (F&I) office.

Car buyers need to know what typically goes wrong with auto financing and how these problems can be avoided.

Many consumers have a lot of information about the cars that they want to buy. The problem is that they don’t necessarily have the right information. The F&I element is absolutely crucial.

Typically, a dealer’s first basis for negotiation is ascertain your monthly payment. “So, about how much a month can you afford?” Or, “How much can you spend a month?” Once a dealer knows your payment ceiling, he can often pad a deal in rate. After all, a dealership is a for-profit entity.

To move through the F&I part of a deal, you can cut out the principle problem by going to the dealership with financing in hand. You can proceed as a "cash buyer" if you have the financing in place. When you are a “cash buyer”, all you need to negotiate is the total price of the car. When you’re negotiating for the price of the car only, salesmen are at a disadvantage because they can only really obscure the total cost of a vehicle if you are a "monthly payment" buyer.

You can get independent car financing from banks, credit unions, online lenders or independent leasing companies.

One of the big mistakes of prospective car buyers, most do not know their credit rating when they apply for an auto loan. Because credit is so important, it is crucial to make sure that your credit report is in the best shape possible before shopping for a car.

Another big mistake made by buyers involves the budget. Far too many people overlook their budget. You should set a sensible price range for the car you want to buy and stick with it. Monthly car payments and related expenses generally should not exceed about 20 percent of your monthly net income.

Research the current interest rates in the marketplace. Compare rates online. Look at leasing! Particularly if you are the kind of driver who gets a new car every 3-4 years.

Most consumers approach dealers without their financing organized. When they finally reach the finance department, they are worn out and in no position to stay on track, scrutinizing the details of the contract they are about to sign. It’s very common for people to agree to buy things they didn't plan to, simply because they are worn out.
To manage the sudden appearance of extra fees, question everything. Dealers are known to add extra fees.

The way to manage dealers and avoid financial mistakes is to be prepared. Do your research and be ready to stand your ground when the dealers come to you.

At AutoBidsOnline you can overcome a great deal of these issues. You can gather all of the information you need and submit a buy bid to our dealer network anonymously. Dealers are incented to accept your offer – quickly! Because if they do not, there is a good chance another dealer will.

Only when your buy bid has been accepted will a dealer know who you are. You can then stroll into the dealership, with financing already in place a get your new car – quickly, efficiently and cost effectively!