May 24, 2009

  • Shopping for a used vehicle from a dealership is a complicated endeavor. Not only are there many different makes, models, features, classes, and specifications, people's credit scores, available cash, and current state of the economy get involved as well.

    Some basic things that I realized today as I went from dealership to dealership was to be specific about desired features. I decided that I needed a reliable car with power locks, a power passenger mirror, air conditioning, and a cup holder. Everything else would be icing.

    I found out that my bank would not issue an auto loan on a vehicle any more than five years old. Older than that, I would have to get a personal loan, which would have different interest rates.

    Also, in determining my total payment, I confirmed that financed vehicles must have full coverage car insurance. This is a far cry from the liability insurance with a $1,000 deductible on my 1991 Nissan Pathfinder.

    From all the talking that I did, I was able to surmise a couple guidelines: (1) An ideal down payment is one-third of the cost of the vehicle, (2) Monthly payments are about $250 for every $10,000 financed over five years. Whenever I mentioned that my goals were less than that, many sales representatives indicated how hard it would be.