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Tips on Buying Cars/Inexpensive new car

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QUESTION: My family's current financial situation is not good, but our credit fair to good. My wife does a lot of driving on her job and desperately needs a new car. What is the cheapest, but reliable small to midsize new car she can buy. Also, what's the best way to make the purchase with no frills, etc? Thanks for your time.

ANSWER: Hi Ed ...believe me there are very few people cutting a fat hog these days which reminds me of Winston Churchill's famous quote about socialism and collectivism which we are all being pushed into kicking and screaming...  He said:

"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery"

I think we are all sharing the misery ...BUT politics aside you asked about a car...

For starters you have to buy a car you like looking at, being seen in and driving or you wont want to make the payments on it. That said...I would not buy a new car and unless you feel strongly about being the one and only owner of the car I would personally (as in if it were me) look around and find a current model year preowned 'certified' car or a CPO for certified pre owned ...the car I would buy would have 7000 miles on it or less and the dealer would have just done the 160 point inspection on it and certified it and along with the certification the car would have a better warranty than a new car because the power train part of the warranty gets extended to 7 years or 100k on CPO's. CPO's also qualify for a sub-vented factory supported interest rate of something like 2.9% for 60 months.  So you save money on the car ...don't have to buy an extended warranty (if you normally would) get cheap financing and a fully inspected car!! :) Sounds perfect right?

The financing goes through the captive lender so if its a certified Ford that means Ford Motor Credit Corp and if its a Honda then Honda Financial and for Toyotas; Toyota Financial. These rates will usually be given to Tier I and Tier II buyer with just a minor (a few extra points of interest for Tiers III and IV. My suggestion is to go to your credit union and if you don't have one then join one and get your financing handled there before you shop.

Now what automakers have THE BEST CPO programs? Well if you said Porsche then you were correct lol but the best CPO programs for what you are wanting would be Hyundai, Kia, Toyota, and Honda.

The best bang for the buck combined with the best fuel economy right now is probably the Hyundais. Just know that when this car gets to be 7 yrs old it will basically have no discernable value.

Check those out and get back to me with any and all follow ups I will stick with you until you are completely satisfied and ready to attack a car deal!

Roger
The Car Guy



---------- FOLLOW-UP ----------

QUESTION: Roger, I agree with you and Winston Churchill 100%. One question on CPOs. If I go that route and want to buy a Hyundai, are you saying I should go to a Hyundai dealer or will the CPO program be similar if I buy a Hyundai from Carmax or someplace similar? Thanks again.

Answer
Sorry for the late follow up but you can only buy a certified preowned from a dealer of the same automaker. Auto max can't offer you a true certified preowned experience nor can they extend the factory warranty except thru the use of add on coverage ... That said they do have a certified program that is better than nothing but lacks the rigorous inspection by factory trained technicians  

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Roger Alvey

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I can answer any question about the car buying process. I am a recognized industry expert on all issues regarding auto finance, including sub prime and buy here pay here financing, I can answer questions about car lock out systems, GPS monitoring by your bank, and about auto recovery methods and defenses. I am a 20 yr car industry expert and can tell you what to look for in a used car, how to negotiate the deal, help with how to market your own car, and how to negotiate with the internet department of any car store. I can tell you every single way the dealer is set up to beat you and how to avoid those traps, I can discuss all aftermarket and extended service contract products you will be offered in the finance process, I have lectured extensively on "The Best Way to Buy a Car" to civic groups and university students. I am a credit expert and can tell you what the dealer and banks are looking for and the rate you can expect to pay. HERE IS THE LINK TO MY OTHER ALLEXPERTS CATEGORIES WHERE I HAVE ANSWERED LOTS OF QUESTIONS http://www.allexperts.com/ep/3440-114948/Used-Cars/Roger-Alvey.htm HERE IS A LINK TO MY BLOG http://thecarguyz.wordpress.com/

Experience

20 years industry experience in top management of dealerships and dealer groups. Recognized industry expert since 2004 in the Top 10 industry experts for The Gerson Lehrman Groups Auto Industry Council. I also do consulting work for Atheneum Partners, Expert 360, Expert Connect and Coleman Research. I have been a franchise owner and understand all facets of the auto industry from the time the car leaves the factory until it leaves the lot with it's new owner. I have written training materials for both the prime and the subprime sales and finance process.

Organizations
NADA, OADA, NFIB, State Certified Used Car Appraiser

Publications
Special Finance Insider, Dealer, and Automotive News, Gerson Lehrman Group Auto Industry Council News (frequently)

Education/Credentials
Willamette University - Salem Oregon BA Economics Willamette University Graduate School of Business - Econometrics Statistics

Awards and Honors
GM's Award of (their most prestigious award) Given to Dealers who surpass their annual benchmark planning volume while also maintaining Top Box (top 5%) CSI

Past/Present Clients
Citadel Investment Group , Summit Partners US ,Broad Peak Investment Management, Nautic Partners, LLC, Hellman & Friedman Investors, L.P. and over 40 additional money managers, hedge funds and research groups

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