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Tuesday, July 22, 2014         

AKAMAI MONEY


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Buying a car requires research and negotiation


POSTED:



Question: What are the advantages and disadvantages of buying a car from a dealer versus a private party?

Answer: Licensed dealers are governed by the state's motor vehicle industry licensing law; private sellers are not. The licensing law sets forth requirements relating to advertisements, mandatory disclosures, time limits for providing vehicle titles and dealer bonding, to name a few, and provides for remedies in the event the dealer operates in violation of the licensing law.

PROFILE

JO ANN UCHIDA

» Age: 54
» Job: Complaints and enforcement officer
» Company: Regulated Industries Complaints Office, Department of Commerce and Consumer Affairs
» Education: Pearl City High School, University of Hawaii (B.A., English; B.A., political science); William S. Richardson School of Law (J.D.)
On the other hand, some purchasers may prefer buying from private sellers instead of through a dealership to avoid "hard-sell" techniques or to deal directly with the prior owner of the vehicle and perhaps buy at a lower cost.

Q: What is negotiable when buying a car?

A: You should walk into the showroom assuming everything is negotiable. Go over each line item and discuss each line item with the dealer to see if you can eliminate the line item or bring the price down.

Q: Is it worthwhile to buy an extended warranty?

A: Extended warranties can be a major expense, and purchasing one is a matter of personal preference. The Federal Trade Commission offers a brochure called Facts for Consumers -- Auto Service Contracts that includes a number of questions to ask and consider before buying an extended warranty.

Q: What are the rules if I buy a car then later change my mind?

A: In Hawaii there is no three-day right of cancellation once the contract is signed unless the purchase falls within the definition of a door-to-door sale. There may be a written reference to a three-day rescission period noted in your contract, but this applies only to door-to-door sales and not to the average vehicle transaction. The door-to-door sales law may apply if you were, for example, sent a flier offering you a gift or prize for going to the dealership to test-drive a car.

Q: What is the best way of comparing prices of cars?

A: You shouldn't fall in love with one car. If you're going to negotiate, you have to be able to walk away.

Buyers have many resources available at the library or online that explain and discuss new- and used-car features, prices and ratings. There are also many resources available that explain price terms and help a prospective buyer evaluate sales offers. Once you have narrowed down the category or type of vehicle you are interested in, track and compare local dealer ads to familiarize yourself with the types of offers that are being made by each dealer. Go to the dealership and test-drive a number of different vehicles. You may be surprised that a vehicle that appealed to you on paper is less desirable up close, or that a vehicle that you rejected earlier is actually to your liking. You will likely need to conduct more research at this point to fine-tune your price comparisons.

Q: What type of refinancing deals can I expect from an auto dealer?

A: Most dealers will be able to offer some type of vehicle purchase financing. In Hawaii, regardless of whether the buyer has taken possession of the vehicle, a new or used vehicle purchase or lease is void if the agreement is contingent on financing and, based on the financing or credit application signed at the time of purchase, the buyer is unable to qualify.

Q: What's the best way to shop around for financing?

A: Buyers should consider contacting lenders directly and discussing the financing options available for a particular vehicle make and model, and some financial institutions may pre-qualify a borrower for an auto loan which could make it easier when looking to buy a car. Lenders will be able to tell the buyer what the vehicle is worth for purposes of a vehicle loan, and the amount and terms of a loan agreement. A good place to start is at the buyer's own bank, credit union or other financial institution. Buyers can then compare the financing offered by outside lenders with the financing offered by the dealer.

Q: What are some car amenities I should consider when purchasing a car?

A: One of the most intriguing parts of shopping for a car is evaluating all the optional amenities and accessories that are offered by the dealer or by other retailers. You can usually find a discussion of these options as you do your research on a particular vehicle, as well as reviews and comments from current and former owners. Research these options, and their associated costs, so that you can negotiate a price that includes the options you want.

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Interviewed by Kristen Consillio, kconsillio@staradvertiser.com

Editor's note: "Akamai Money" seeks out local experts to answer questions about business in Hawaii. If you have an issue you'd like us to tackle, please e-mail it to business@staradvertiser.com and put "Akamai Money" in the subject line.






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