With President’s Day fast approaching and car dealerships advertising their holiday sales, the Office of Consumer Affairs and Business Regulation offers tips and advice to consumers looking to purchase a new or used vehicle.
Many buyers of new and used cars from dealerships want the same thing: to pay a fair price for a vehicle that meets their needs. There is no way to definitively ensure a problem-free experience, but there are some factors you can consider to give yourself the best chance of being a satisfied customer.
- Budget: Start by determining your total budget for the purchase. Dealers will sometimes ask you how much you can pay per month. You may wish to avoid this question and instead discuss the full purchase price of the vehicle. Be aware that luxury or performance vehicles not only cost more to purchase but also usually cost more to insure, repair, and maintain.
- Research: Do you know the make and model of the vehicle you want? You can use comparison websites to read vehicle reviews and see how much other people have paid for that vehicle in your area. You may want to consult other trusted sources – like your mechanic, or friends or family members who have recently purchased a vehicle – for their recommendations on dealerships and car makes and models.
- Finance: You may want to seek financing from another source – like your local bank or credit union – before visiting the dealership, then ask the dealership’s finance office if they can offer you a better interest rate. As interest rates are often directly linked to your credit, it’s a good idea to inform yourself of your credit history. You are entitled to one free credit report per year from each of the three major credit reporting agencies at www.annualcreditreport.com. You can also use this opportunity to verify your information and correct any errors in your credit report.
- Insurance: Have you selected an insurance company prior to the sale? Do you know how much coverage you need or want? The state Division of Insurance website contains a great deal of information to help guide you through purchasing the appropriate insurance for your vehicle.
- Trade-in vehicle: If you have a trade-in vehicle, independently figure out its estimated value through a comparison website, mechanic estimate, or otherwise. Bring hard copies of any pricing estimates if you plan to do a trade-in at the dealership where you buy your new vehicle. It is important to note that the trade-in vehicle’s value may not significantly change the purchase price of your new vehicle. Consumers often focus on the price of the newer vehicle and simply accept the dealer’s proposed trade-in value, which can result in you getting a lower value for your old vehicle. It might help to think of your trade-in as a completely separate transaction from the new vehicle purchase – it could even mean the difference of thousands of dollars.
- Fees: Some dealers may add a “documentation fee” or “doc fee” to the price of the vehicle. It is not illegal to charge this fee, as long as the dealer charges it equally to all purchasers. The fee may also be negotiable. If the dealership refuses to waive or reduce the fee, consider asking them to reduce the purchase price of the vehicle itself.
- Know your Lemon Law rights: New and used cars with fewer than 125,000 miles that are purchased from Massachusetts dealers for personal use are protected by warranty under the Massachusetts Lemon Laws. These protections are in addition to any manufacturer’s warranty that may be included with your purchase (such as 3 year/36,000 mile “bumper-to-bumper” warranty, or a 5 year/60,000 mile powertrain warranty). Look for the bright yellow Lemon Law sticker affixed to the window or dashboard of the vehicle for sale to see a summary of your rights. You can also find more information about the Massachusetts Lemon Laws at www.mass.gov/consumer or by calling (617) 973-8787.
It is important to note that it is illegal for a Massachusetts auto dealer to sell a vehicle AS IS, WITH ALL FAULTS, or with a 50/50 WARRANTY.
Once you have determined which vehicle is best for you, read vehicle reviews and see how much other people have paid for that vehicle in your area. Make sure to compare the same make and model vehicles so you have an apples-to-apples evaluation of the price. It may help you to bring printed materials that highlight this information to use as a negotiating tactic.
Used cars from a New/Used car dealership:
A used car often costs significantly less than its brand-new counterpart, but it is still a large purchase. Remember that used cars can vary greatly in condition, even across identical makes and models. If you have found a vehicle that you are seriously interested in buying, consider paying for an independent, thorough inspection of the vehicle. During the inspection, ask when you will likely need to replace parts such as the tires and brakes. Remember that scheduled maintenance can be as expensive as unexpected repairs, so it is important to determine if the used vehicle is nearing maintenance mileage intervals. You can also ask the dealer for service records to determine what work has already been done and to possibly determine if the vehicle has been in an accident.
Used cars from independent dealerships:
Independent dealerships are not associated with a particular manufacturer and may have any number of makes and models of vehicles available. You may wish to start your search at a dealership that you know has a good reputation. Note that independent dealers are likely to have procured their vehicles at auction. If the dealer claims the vehicle was bought from an individual, ask to see service records and if you can contact the previous owner. Independent dealerships may not have repair facilities onsite, which may make it more difficult to complete any warranty repairs. Consider paying for an independent, thorough inspection of the vehicle before agreeing to sign any purchase documents. If the dealer refuses to let you have the car thoroughly inspected before purchase, consider it a red flag.
It is extremely important to have all the necessary information before agreeing to a purchase. Do not feel pressured by the seller, and take the time to ask questions. Once you have selected and discussed the sale of your vehicle, be sure to read all the paperwork before signing anything. Make sure you understand the contract, its warranty, and any payments for which you are responsible. It may be better to walk away from a potential sale rather than end up with a vehicle you don’t really want and/or can’t afford.