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Why You Don't Need to Buy a New Car You only think you need a new car. Find out why you don't! From "Home Made Easy" episode DHME-138

Guest Matt Heimer, senior editor of Smart Money Magazine, joins host Stephanie Lydecker and outlines why buying a used car is the way to go these days.

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Matt Heimer shares useful information on purchasing a used car versus a new one.

Why You Don't Need to Buy A New Car

• It used to be that buying a new car was a status symbol, and some people thought buying new meant a big difference in safety, but things have changed recently. Buying a used car is the practical choice for a number of reasons. Gone are the days where buying used meant a lack of reliability and expensive repairs. Often, but not always you save money on car insurance by buying used, and by buying used you can now move up and buy the kind of prestige car that you can’t afford to get new. And because so many cars are coming off of lease, old cars are back on the market faster and in better shape than ever before.

• Shop for a certified used car. This is a car that has passed through inspection and is backed by a manufacturer's warranty. Keep in mind though that certified used cars are estimated to be $500- $1000 more expensive than a normal used car. You should also look for cars that are still under their original manufacturer's warranty. If you buy a car that is three years old with less than 36,000 miles, you can usually rely on the original warranty. If you are really worried, take the car to a mechanic for a quick check up before you buy it—that should cost around $100.00. Also take the car for a test drive to check it out

• There are certain things you need to look out for when you test drive a car. Some things are going to be really obvious to you like—Is the car making strange sounds? Make sure you have the radio turned off so you can hear the car. Check the audio system out (when you're done driving) Listen to the engine. Listen for rattles and squeaks. Ask yourself if the car fits right and feels comfortable. Evaluate things like the brakes and the interior controls like the windows. How's the visibility? Acceleration from a stop? How does it ride? How's the hill climbing power? After the test drive, ask the owner if you can see the service records and receipts if available. If there is paperwork available, note whether the car had oil changes at regular intervals and be cautious of cars that had major repairs such as transmission rebuilds, valve jobs or engine overhauls. The more information you have on the history of the car, the more comfortable you'll feel.

• The three most common places from which you can buy used cars are private parties, new car dealerships and used car lots. Private parties—ordinary everyday people—tend to have the most reasonable prices. Thanks to the internet, you can skip a lot of the running around from lot to lot. There are great websites out there that list used cars. Another source for used cars is used car lots run by rental car agencies. These cars are usually only one year old and usually still have the factory warranty in effect. You can even buy used cars on internet auction sites, they rack up billions of dollars in car sales every year.

• While leasing can intimidate a lot of people, there are advantages. The number one advantage being that you get to drive a new car for less than it would have cost you to buy it. The downside is that you have nothing to show for it at the end. If you are going to go the lease route, it's much better to get a close ended lease which means you turn the car in at the end of the lease without making any further payments. Another advantage to leasing is that you get to change cars often and contrary to what you hear, you can still negotiate the finances of your lease.

GUESTS :

Matt Heimer
Senior Editor, Smart Money Magazine
Website: www.smartmoney.com