Main Street Motors Interview With Personal Finance Expert Andrew Schrage of Money Crashers

Should a customer put the full purchase price of the vehicle they’re buying on there credit card?
Actually, I do not believe this is an option at most dealerships. The processing fees a dealership must pay are significant for large purchases, and I was also told that consumers in the past paid for a car with a credit card, then disputed the purchase in an attempt to defraud the dealership.

Should a person run there credit report before they apply for a car loan?
You should absolutely run your credit report before applying for a car loan. The higher your credit score, the better the interest rate you’ll get on your loan. And if your credit report is inaccurate because it includes accounts that don’t belong to you, that can lower your score and result in a higher interest rate. You can run your report for free by visiting the website AnnualCreditReport.

What questions should the consumer ask a finance and insurance expert at a car dealership?
I’m not so sure you should ask a lot of finance questions at the dealership – you might not get objective and unbiased advice. And they may not be able to provide you with much guidance on insurance. Check out your financing options through your current bank or a local credit union and compare the terms to what the dealership is offering. You might find a better deal by going with outside financing. For any insurance questions, get with your current agent or if buying a car for the first time, go with an independent agent who is not associated with any particular company, but is only seeking to get you the best deal on coverage and premiums.

Should the consumer ask the dealer where they purchased the vehicle?
Yes. If the car was purchased via auction, there could be damage or needed repairs that even the dealer may not know of. If this is the case, make sure you have a mechanic inspect the car. Reviewing the CARFAX report is not always a surefire solution – not all accidents or damages are reported to that company.

Should the consumer purchase the extended warranty the dealership is selling?
This is really a matter of personal choice, but in a lot of cases, the extended warranty isn’t worth it. The price you pay for it normally outweighs any costs from any potential repairs that may pop up before it expires. However, some folks do prefer to buy it for peace of mind purposes.

How will the consumer know if the vehicle is a “lemon”?
Carefully review the CARFAX report and have the vehicle inspected by a mechanic. But before you pay for an inspection, there are some things you can do on your own to know if the vehicle is a lemon. Any car that is being sold “as is” could very well be a lemon. You can find that information on the sticker located usually on one of the car windows. Check the engine – it should be generally clean and free from a lot of grease and rust. The tires should have solid and even tread on them. Worn seat belts could be a sign of a serious accident.

Should a consumer have there mechanic look at the vehicle before purchasing from the dealer?
Yes. It’s never a bad idea to have a mechanic inspect the car for problems and issues. If the dealer will not allow you to have this done, you may want to think twice. A full inspection of an automobile by a mechanic will normally cost you between $100 and $200.

Tell my customers about the latest and greatest with MoneyCrashers.com
Things are going quite well over at MoneyCrashers.com. We continue to strive to provide fresh and original content, with a focus on accuracy and factuality. The main topics we cover involve ways to better manage your finances including how to save for retirement, avoiding credit card debt, and basic tips for investing. We also feature articles on small business and lifestyle from time to time as well.

Andrew Schrage of Money Crashers

Leave a Reply