Sound too good to be true? Well you can, indeed, prestigious classic cars for about $5,000 (a car that's also destined to appreciate in value with time) and, easily, obtain full insurance for about $350 per year.
The first thing you need to do is
spend some time and just a little money becoming familiar with the world of car collecting - one of the fastest growing sectors of the collecting industry. Just a few minutes spent reading about collecting classics will painlessly make you aware of the investment potential of old classic cars.
Even a quick read of a few e-zines will also teach you that it's possible to buy an antique car ("antique") meaning 25 years old or older) in the $4,000 to $8,000 range.
The purchase of a car more than 25 years old makes it possible, for you to join one of the many antique car clubs, many of which advertise in the pages of your local newspaper, membership in one of these clubs makes it possible for you to buy auto insurance, at a steep discount, from the club at low group rates.
Bear in mind that you won't be able to buy for $5,000 or $8,000 a corvette, 55 T-Bird. an Austin Healy 3000 or one of the other cars whose value already has started soaring. You may , however find a late 50's or early 60's Chevy, Ford, Chrysler or Caddie - restored or partially restored - that'll let you drive in style at a total cost that'll make you smile.
A good place to find collectible cars, in many parts of the country, is in the pages of "Auto Trader" - Auctions. Even the classified pages of your local paper, often contain some gems.
Mail order auto insurance companies, for some reason, have an unwarranted bad reputation with the consuming public.
The fact of the matter is that most of these mail-order auto insurance sellers can, and do, provide the same full service you'd expect from the big name company in an office ... they just provide it at substantial savings.
These mail order dealers, do a huge volume of business; this enable them to use large underwriters able to obtain the very best bargains for their customers.
If you have any questions about the mail order company's legitimacy, contact the insurance commissioner in your State or the State in which the company itself is located and ask if any complaints have been lodged against the firm.
Make no mistake, buying a new car is a battle. Car salesmen - at least many car salesmen - attack likely prospects with all the fervor of a platoon of Nazis. Salesmen thrive on confusing their prey with questions and with numbers and claims that seldom have anything to do with the car being sold.
Spend a few dollars on one of the several guides to new car prices published in the United States. "Edmund's New Car Prices" lists the base cost for each car and the base cost of common accessories.
Decide before you enter a showroom what car or cars you are interested in, exactly what accessories you want and exactly how much you are willing to spend. Use Consumer Reports magazine to get a firm idea of what car will give you the most bang, and the best service, for your bucks.
Let the salesman know - up front - what you want. Remember, you're in the showroom to buy a car, not to find a friend for life. If you ask a question and don't get an answer you understand, ask again and keep asking until you get an answer you can live with. (you'll know the right answers, you already read the book)
When you find a car you're really interested in, compare sticker prices with the base costs from "Edmund's" to determine the dealer's profits. Those profits are the margin you can use to wheel and deal.
Act uncertain about the deal offered ... don't jump at it. The dealer is likely to think you're not going to buy and may revamp his offer.
Don't exceed the "top dollar" amount you decided on before leaving home. Two things determine the affordability of any car you like: the amount of your down payment or trade-in and the amount of your monthly payments. Don't exceed your budget)
Be wary of "special" sales - these often are "come-ons" at which dealers make some of their best profits and advertised specials often turn out to be non-existent (already sold) "bait and switch" tools to get buyers in showrooms.
If you can, shop on the last business day of the month when dealers are getting ready to close out their books, and very late in the day when salespeople are likely to be tired and hungry for a sale.
Rather than use your old car for a trade in, consider selling it, privately, for cash. You'll get more from a private buyer than you'll find available in trade-in dollars.
Carrying these goodies won't make you completely immune to expensive car repairs but having them on hand during roadside emergencies can save you lots of dollars in towing charges and mechanic's fees.
Parts:
top and bottom radiator hoses
a set of spark plugs
a set of V-belts
extra fuses
an inflated spare tire and a jack
a battery jumper cable
Tools:
a lug wrench
plain and Phillips screwdriver
locking pliers (vise grips)
an adjustable wrench
a penknife
open-end wrenches or sockets in all commonly used sizes
Plus miscellaneous goodies, including duct tape, electrical tape, plenty of rags, a good flashlight, a cigarette lighter, epoxy glue, a blanket or large towel, roadside flares, an owner's manual, and bandaids for the inevitable knuckle scrapes.
Take the base sticker price (the base price for the auto without any options) and subtract the markup; then subtract the markups for any options. Unless you're a mathematical genius, you'll need a calculator for this, but knowing the true dealer cost puts you in an enviable bargaining position.
Typical markups (American cars):
economy cars: 10%
subcompact cars: 12%
sporty cars: 18%
small luxury models: 20%
full-size models: 22%
luxury cars: 25%
vans and pickups: 25%
Typical option markups:
The goodies that make a car or truck look better (and add creature comforts) like body striping, power mirrors, air conditioning, moon roofs usually carry a markup of 30 percent.
The high-tech goodies that add performance punch (five-speed gearbox, heavy-duty shocks, performance tires, etc.) typically have markups of 20 percent.
A fair price:
A fair price would be equal to the base sticker price minus markup, the cost of all options minus their markups, $150 dealer overhead, and $100 profit for the dealer. This figure is close to what any dealer should take for the car you want - plus or minus $100.
Buying a new car, any new car, can be an expensive proposition. There are times, however, when a new car purchase can be put off, at least for a few years, if you own a used car that's worth fixing.
First, the car in your possession must be "sound." That means its body must be rust-free and its chassis unbent. On that foundation it is possible to rebuild a car that can last you an additional five years.
To be considered under any financial problems.
The best way to
determine whether or not a car is worth saving is to take it to a trusted mechanic for a complete inspection and an estimate of exactly how much it would cost to make the car close to "like new." In many cases, you can have a car completely refurbished. Including an engine rebuilt, new upholstery and a paint job, for an amount about equal to what your interest costs would be if you were to purchase a new automobile.
Many new car buyers justify purchasing economy cars on the basis of gas savings and even say the money saved on gas will pay for the new car, given time. Bear in mind that, while older American cars do get only about half the gas milage of the new foreign-built models, the typical driver would save just $716 per year by replacing his gas guzzler with an economy model.
Assume, then you have a choice between fixing your old car for $2,000 or buying a new Japanese economy job for $15,000 minus a $2,000 trade in for your old car. At a gas savings of $770 per year, it would take more than 16 years for the gas savings to pay for the new car.
If your older car has rust damage or an accident-damaged frame so that the car appears to be turning a corner even when it's on a straightaway, it makes no sense to spend money on fix ups. At the same time, there are "lemons" (a car that never run trouble free) the best thing you can do is get rid of it, quickly.
If there's any time when a buyer is at risk, it's when he or she goes used-car shopping. There are only three reasons why anybody sells a used car: one, the seller simply wants to buy a new car and is willing to get rid of the old one even though it runs fine and looks perfect; two, the original buyer couldn't keep up with payments and the car was repossed; three, the car is a piece of junk that isn't worth keeping. You have to determine which category applies to the car you're looking at.
In this regard, you're much better off buying a used car from an individual rather than a dealer. To be sure, you won't get a no-money down, $10 per week financing package; but you will be able to ask the former owner questions, judge his honesty by the way he responds and even get some clue to the kind of driver he is by judging his lifestyle. The more answers you get, the better your chances of not getting a lemon.
Before you begin looking for a used car, it's important that you decide (as though you were buying a new car) the exact car you're interested in. This determination will depend, in large part on the use you intend for your purchase. If, for example, you need a work car to haul paints and tools to and from your job, you'd probably be satisfied with a station wagon from about 7 to 10 years old. If, however, you want something classy for weekend trips and maybe a summer vacation, you might look for a 5 or 6 year old convertible or sports model.
It's a good idea to choose a popular make and model that has been around for a while. These cars have "track records" and afford easy parts availability. It's not wise to buy a car in its first model year, since, often, all the so called "bugs" are not worked out.
Look for the deluxe model of the popular make you decide upon. These cars may cost a bit more, but they usually are better cared for.
Check your local paper to determine the average price for the car and model you've chosen, then decide to pay a bit above the average price. The best cars, obviously, will bring the best money.
Consider buying your car from a private individual, since the price you'll pay will probably be markedly less than what you'd have to pay a dealer.
There are some ways to make sure - as much as possible in buying a used car, you're not buying someone else's problems. In addition, you should have a mechanic check any used car before you put your money down.
Here are key points to check:
If you're buying from a dealer, ask for the name and telephone number of the prior owner. If the dealer won't give you this info, pass on the deal.
Call the former owner and ask if there were any problems, just what the biggest problems were? Also ask what the car's mileage was when it was given to the dealer ... if it's less now, the car's been tampered with. Don't buy!
Perform an exterior inspection yourself. Kneeling at the front of the car, sight along the length of it. If the metal looks wavy or if you see any signs of paint patches, the car may have been in a wreck ...
Check carefully for any signs of rust. At the first sign of rust, head to a different dealer, or at least a different car.
Run your finger around the inside of the tail pipe. If it comes out oily, the car is burning oil and that needs to be checked by a mechanic.
Check the tires - not by kicking. Make sure they are wearing evenly, since uneven wear can be a sign the car needs aligning. It's a good sign if all tires are the same type and brand, including the spare.
Open and close all the doors, the trunk and the hood. If forcing is necessary, it's likely the car has been in an accident.
Test drive the car.
If it's equipped with a standard transmission, take the car up to about 30 mph in second gear; then quickly depress the clutch and release it. The rear wheels should screech it protest if clutch is in good shape.
Listen for engine knocks (bumping sounds) and for grinding and humming in the gearbox. Give the brakes a hard test -- breaking quickly while at speed to make sure the car doesn't pull or swerve. Drive over some bumps to make sure the car doesn't sway. With the engine running, but the car at rest, depress the brake pedal and hold for about 30 seconds, if the pedal moves to the floor, the car needs brake work. Test the air- conditioner, radio, windshield wipers, lights, etc.
If the car passes this muster, and you like it, it's worth taking to a mechanic for a more professional, through inspection.
When looking in the newspaper for a used car, you should be wary of advertisements that shout about "no money down," one year or 50,000 mile warranties" and other unbelievable deals. As most crooks will tell you, "If a deal sounds too good to be true, it usually is".
Advertisements reading "no money down," for example, are true, but only if your credit is gilt edged, good as gold, up there with Donald Trump's. Otherwise, you better believe you'll have to put up some kind of collateral.
Many warranties on used cars make no sense. Consider, for example, a one year or 50,000 mile warranty. Nobody, other than a rural mailman or a long haul truck driver, 50,000 miles in a year. In any case, what's important is the extent of the warranty. Are all parts fully covered? No.
How about "your trade accepted, paid for or not. push it in , tow it in , makes no difference." Not so, people who trade in cars that haven't been paid for are not the best credit risks in the world. It's not very likely any dealer of repute will give a car to a customer with questionable credit without some kind of down payment.
Many advertisements for repossed cars also can mislead since quoted prices ("pay $100 down and take over payments") do not even mention the total price and in any case do not include such items as storage charges, dealer preparation, sales tax and title transfer.
If you deal with a dealer, your best bet is to do business with a new car dealer who sells used cars. Better yet, generally, is the purchase of a used car from a private individual.
It's no secret that lots of money has been made in recent years by car buyers savvy enough to get their hands on autos - both American and foreign - that grow into collector's cars. A 1957 Chevy convertible, for example, that cost just a couple of thousand dollars can be worth 10 to 15 times that amount today, and a 55 T-Bird in good shape is worth about as much as a two-berroom house.
If you're in the market for a used car and have enough money to be choosy, you might want to buy a relatively new car, in good shape, that has at least the potential to become a valuable collector's goody in the years to come. The trick, of course, is to somehow know in advance what collectors will be looking for five, 10 or 20 years from now. While there are no guarantees in this business, there is one car that appears likely to increase in value as time passes.
1984 Toyota Celica GTS Convertible: This sporty model, equipped with such extras as a Recaro-style driver's seat, quad stereo, power exterior mirrors and a trend-setting body style, was the first convertible brought to market after automakers around the world decided to quit making rag tops. A good used model can be found for about $7,000.
If you're interested only in around town transportation, there's a little used car buying strategy that can save you tons of money in the long run. You buy a car that runs, not concerning yourself with styleor looks orwhether or not the radio works; you drive it for as long as it keeps running; then you junk it and buy another one.
Just think for a moment. You can buy a car for $200 or $300 at any auction and drive it until. When and if the car dies, you call a junkyard and they'll pay you $25 or more for the privilage of hauling the junker away.
You'll save big bucks if all you're looking for is a nice vehicle that starts, stop and goes from here to there.
You've owned your car for a few years now, and you're ready to move up to a newer model. Thee are quite valid, moneymaking reasons why you should sell your car privately rather than use it as a trade-in.
In thinking about selling your car, remember that a used car in reasonable condition can be sold quite easily if the selling price is realistic.
The main reason not to sell to a dealer is that dealers are too busy to spend time necessary to properly sell this vehicle, dealers usually steal used cars.
As a general rule, car dealers will give you about 25 percent less for your car than you'd get from a private individual. In other words, a used car that is worth $3,000 to a private buyer will get only about $2,200 from a dealer. Most dealers justify this lower price by saying they have to spend money on recondititioning before they can re-sell the car, not a lot of money is spent on reconditioning.
In any case, selling your car privately rather than giving it to a dealer not only makes you more money but also removes your trade in as a tool the dealer can use to confuse you about the actual cost of your new car. Dealers often will give you much more than your car is worth but then will turn around and charge you more for your new car than it's worth.
If you want to sell your car, you must price it right. To do so, look at dealer and private ads in the paper and consult one of the "Red" or "Blue" books printed by dealers federations
Remember that "rust" is a dirty word. Once your car rusts through so that the body is perforated, the problem is inoperable. Unless you're willing to be honest with a prospective buyer and discount your price sharply because of the rust, do the car-buying public a favor and just let your car rust in peace. Don't sell it!
Don't be too concerned with mileage. Everybody old enough to drive knows that most cars are driven between 12,000 and 15,000 miles each year. If your car's mileage is higher, drop the price a bit.
A clean car sells faster and gets more money than does a dirty one. Spend about $25 having the car's engine and exterior cleaned and a few hours cleaning and polishing the interior.
Make sure all four tires have plenty of tread. Take the spare out of the trunk and put it on the car if it has good tread ... most buyers expect to see a raggedy spare. SURPRIZE!
Match tires so all are the same brand
Show a prospective buyer all maintenence bills and work orders you have, without being asked. Buyers will appreciate your open approach.
Finally, insist on a test drive. This protects your rights should the buyer ever claim he/she was misled and demand a refund.
