Car Handbook

Driven to Buy a Car?

So you want wheels. And you want the best deal on wheels. You’ve come to the right place. This handbook contains the latest research and tips on buying cars, with crucial information concerning your legal rights as a consumer. We hope we’ve provided the information you’ll need to make a deal that you’ll be happy with.

For most of us, buying a car is the largest purchase we’ll ever make besides buying a home. Today a new car will likely cost over $20,000, and, because it is legally binding, the purchase should be very well-considered.

The Minnesota Attorney General’s Office hears from many consumers every Monday morning who assume they can still return the car they bought Friday night. Again and again our phones ring with the question, “Can I return the car I just bought this weekend?” Our answer is almost always, “No.” There is no three-day cooling-off period in which to reconsider a car purchase as there is with some other purchases. Once you sign on the dotted line, the car is yours.

Avoid being one of our Monday callers by doing your homework before you buy a car. In this handbook, we provide guidelines and references to help you decide what kind of car to buy, what you can comfortably afford, whether to buy a new or used car—or lease one instead, what options and extra protections to purchase, car rental practices to be aware of, and how to maintain your vehicle without getting run over in the process.

Car buying is intimidating to many people. For instance, how many of us know the difference between three and four cylinders? If air bags are fail-safe? Or whether an extended warranty makes sense? If you aren’t car savvy, or are a little rusty on car mechanics and the latest dealer practices, you may appreciate a few tips and pointers.

We’ve written this book to be comprehensive enough to give you the tools you need to make a good car buy. But if you need more information about auto buying, don’t hesitate to pick up the phone and call us at (651) 296-3353 (Twin Cities Calling Area) or (800) 657-3787 (Outside the Twin Cities). We’d rather hear from you now than “the Monday morning after!”

Buying New vs. Used

Do you see yourself tooling around town in a gleaming vehicle with the latest options? Were you on the crest of the wave with your bright-red hot rod at age 20? Would you feel inferior today without an impeccable interior to show your business clients? Then you probably won’t be fulfilled without a new car.

Buying new isn’t only about image. New cars have safety features that are constantly being improved. They may be less likely to rust because of better rust protection. And they’re virtually problem free. With a new car there’s less risk of being stuck on the highway at 20 below zero with a transmission that just went out. If something does go wrong, it’s usually under warranty for several years, so you won’t have to pay to fix it unless you have a deductible written into your warranty.

On the other hand, buying a new car is a financial risk. You can’t know how much your car will be worth several years down the road. It will lose hundreds or thousands of dollars in value over the first two years, but you may still be paying off a loan based on its negotiated showroom price.

Many car experts say you’ll come out best financially if you buy a car that’s a couple of years old, after the major depreciation has occurred. Even with the cost of repairs, used cars cost less to drive. With these savings, you can save some cash for repairs and still come out ahead.

When deciding whether to buy a new or used car, ask yourself if you have the temperament to drive a car that needs periodic maintenance, or if you’d rather spend more money up front for a car that is warranted to deliver a reliable ride.

Buying vs. Leasing

Buying is more traditional. But bold headlines keep telling you that you can lease a brand new sedan for $259 a month, or a four-wheel-drive truck for $299 per month! However, you won’t own the vehicle if you lease. You’re really just renting a car for the long term.

So is buying more practical? There isn’t an easy answer. No matter how you look at it, leasing and buying aren’t easy to compare. Take some time to read the chapter entitled Get a Lease on Leasing in which we’ve identified some ways to compare leasing and buying by calculating your monthly payments and looking at the long-term costs of each.

This is only an overview of the issues you’ll face in determining whether to buy a new or used car, or choose instead to lease. Read the chapters concerning each of these choices before you make your decision. Learn the rules of the road before you hit the streets, lots, and showrooms!