Should I buy a new car or a used one?  This is an age-old car buying dilemma for most consumers.  Most financial experts say that it’s always smarter to buy used.  Let someone else pay that initial depreciation!  Seems like a pretty easy decision, huh?  Unfortunately, like most things in life (and the car business), it’s more complicated than that.  Here are six factors to consider when deciding between new vs. used:

1.  Your Budget – Your budget may make the decision for you.  If you can only afford a $10,000 car, you will most likely have to buy used.  While you can occasionally find new cars in this price range, you will end up with a base model econo-box with poor quality ratings and minimal convenience options and safety features.  You are better off buying a used model that was a safe, reliable vehicle to begin with.  Don’t be tempted to buy new and use a long loan term to fit the monthly payment into your budget – that can get you in financial trouble and cost you much more in the long run.

2.  Depreciation – The average vehicle depreciates at least 20% in the first year of its life.  Some vehicles depreciate as much as 40% or more (i.e. Range Rovers, Escalades, and pretty much anything wearing a GM or Chrysler badge these days).  Other vehicles, like Hondas and Minis, hold their values very well.  If your desired vehicle has a high depreciation rate, then it makes sense to buy “slightly used” and save yourself a good chunk of change.  However, if your dream car holds its value exceptionally well, then you might want to pay just a couple thousand more for a new one with a full warranty.

3.  Availability - If you want a model that just came out, then you will obviously have to buy new.  But, if you are considering one that has been out for at least a year, then check the availability of used models in the secondary market.  In today’s economy, people are holding on to their vehicles, which is reducing the supply of used cars on the market and increasing used car prices.  Some models are hard to find and priced so high, that it makes more sense to buy new.  However, if you are looking for a model that is popular with the rental car companies, then you should have plenty used ones to choose from.

4.  Interest Rates – Finance rates for used car loans are typically 2 points higher than for rates for new cars.  Why?  Because banks consider used cars to be a higher risk.  If you are considering a “slightly” used car that holds its value well, do the math to calculate the total cost of financing the car over time and see if buying used will really save you money. 

5.  Risk – No matter what, buying a used car comes with some degree of risk.  A used car, by definition, has been subjected to a certain amount of wear and tear, not to mention someone else’s driving and maintenance habits.  Some vehicles have spent most of their life on the highways, others in more strenuous stop-and-go city traffic.  Some vehicles have been garaged and maintained religiously according to the owner’s manual.  Others have been left out in the elements and have never tasted fresh oil.   While a Carfax report may reveal obvious signs of abuse such as accidents, theft and flood damage, it may not show everything - especially if the “accident” was between the car and its owner’s mailbox. 

6.  Maintenance Costs - The maintenance required during the first year or so of a vehicle’s life is usually limited to oil changes, tire rotations and other relatively inexpensive items.  Some manufacturers even cover the cost of these routine maintenance items for the first few years.  A used vehicle, on the other hand, may require the replacement of more expensive parts such as tires, brakes, a battery or worse.   When you purchase a new vehicle, those expensive repairs often don’t come along until you have already paid off the vehicle loan (assuming you financed it properly).  On a used vehicle, expensive repairs can pile up on top of your monthly loan payment, straining your budget.  And, by the way, most repairs are “routine maintenance” and are NOT covered by an extended warranty.

Ultimately, the decision to buy new or used comes down to what you car love, what car you can afford, and what will give you peace of mind.

Still not sure which way to go?   Call Women’s Automotive Solutions for a complimentary consultation.  We’ll look at your unique situation as well as the current car market to help you decide which option is right for you.  And, no matter which way you decide, Women’s Automotive Solutions will get you the best deal!

The government released the final and official rules for the Cash for Clunkers (CARS) program today, and they included some much-need clarifications!  The good news is that the $45,000 price tag limit for the new vehicle to be purchased (or leased) applies to the base MSRP, not including optional equipment, dealer accessories, destination charge, taxes, tag fees, or doc fees! 

To learn more about the program and to see if you are eligible to take advantage of it, contact Women’s Automotive Solutions or visit the official government website, www.CARS.gov. 

My business partner, Michelle Lundy, spent over 20 years running car dealerships before she started Women’s Automotive Solutions.  She watched hundreds of smart, successful women walk into her dealerships to buy cars.  These women were doctors, lawyers, bankers, and business owners.  They owned homes, managed their family finances, and negotiated business deals.  Yet, most of them felt like they needed to bring a man with them to buy a $30,000 car.  But why?

If you ask a random sampling of women how they feel about car shopping, most would rank it right up there with a root canal.  Many women say that the dealers “take advantage” of them or don’t treat them with respect.  Others are uncomfortable with the high-pressure negotiating process.

Research shows that women pay $500 - $1,000 more for cars then men.  In fact, women pay 46% more for goods and services in general than men.  (Similar statistics are true for Blacks and Hispanics.)  Think about it.  We pay more for hair cuts.  We pay more for clothes.  We pay more for dry cleaning.  And, we pay more for cars.  Why?  Because we allow it!  We DON’T ASK for a better deal. 

In her book, “Women Don’t Ask”, author and economist, Linda Babcock, reveals some interesting statistics:

• 2.5 times more women than men said they feel “a great deal of apprehension” about negotiating
• Men initiate negotiations about four times as often as women
• When asked to pick metaphors for the process of negotiating, men picked “winning a ballgame”, while women picked “going to the dentist”
• Women will pay as much as $1,353 to avoid negotiating the price of a car

So, why don’t women like to negotiate?  Are we just wired differently than men, or is negotiating an acquired skill?  According to experts, it’s a little of both.  Women are more relationship-based than men.  When we spend time with someone, even a car dealer, we think that a relationship has been established.  We feel guilty if we don’t give them our business.  Men are better able to separate the relationship from the negotiation.  A male customer and a salesman may get to know each other during the negotiations, but if the numbers don’t work out, the male customer walks away from the deal - guilt-free.  

Babcock believes that society is to blame for teaching women that it is not appropriate or “lady like” to be assertive.  We are supposed to put the needs of others before our own.  Young girls are encouraged to play “house” and other cooperative, compliant games while boys are encouraged to compete and to “win”.    When a man displays initiative, he is considered a “go-getter”.  A woman displaying the same behavior is considered “pushy” and “aggressive”. 

Does this mean that women are less capable negotiators than men?  Hardly.  Women simply take a different approach, one that is more “collaborative” than “competitive”.   Women are more likely than men to listen to the needs and concerns of all parties involved and look for a win-win scenario.  This approach allows women to develop long-term relationships without burning as many bridges as men, who tend to focus on short-term gains.  

Unfortunately, this collaborative approach does not always serve us well in the car buying process, which is short-term and adversarial by design.  What can we do to be better car negotiators?  Stay tuned for our next article, “5 Tips for Tough Negotiating”.

Of course, we must be careful not to make too many generalizations.  Not all women are intimidated by the negotiation process.  (We car chicks obviously don’t mind it!)  Nor do all men enjoy haggling.  After all, 60% of Women’s Automotive Solutions clients are men!

If you don’t like to negotiate, that’s ok!!!  You don’t have to.  You have “people” to do these unpleasant things for you.  Just call Women’s Automotive Solutions, and we’ll do all the haggling and get you the best deal.   We make car buying easy!

If you think the new “Cash for Clunkers” program is going to help you buy a new car, think again.  Our government’s latest, misguided attempt at saving the environment and boosting the economy isn’t all it’s cracked up to be.

What is the “Cash for Clunkers” Program?
 
Cash for Clunkers, officially known as the Car Allowance Rebate System (CARS), is a federal program passed by Congress and signed into law by President Obama will provide a voucher worth up to $4,500 to consumers trading in an old gas guzzler for new, more fuel efficient vehicle.  The program is effective beginning July 1, 2009 and ending on November 1, 2009 (or when the funding runs out, whichever comes first).

Sounds pretty good, huh?  Well… maybe not.  The government vouchers for $3,500 or $4,500 are in replacement of — not in addition to — the ordinary trade-in value of the vehicle.  If your trade is worth more than $4,500, forget it.  If your trade is worth less than the voucher, then the program might benefit you.  But, it’s only good for purchasing a new car, not a used one.  Purchasing a good, used car will likely save you more money overall than buying a new car with the voucher.

What’s the Catch?

Your trade must also be drivable, must have been made in 1984 or later, owned, insured and operated by you for one year, and must get 18 mpg or less city/highway combined.  The trade vehicle must be crushed, not resold.  (The idea is to get them off the road) If that’s not enough restrictions for you, there’s more!  You must purchase a new vehicle with a sticker price of $45,000 or less.  If you buy a new passenger car, it must get at least 4 mpg MORE than your trade vehicle.  If you buy a new SUV, minivan or small truck, it must get at least 2 mpg more than your trade.  (Larger trucks have different requirements and restrictions.)  Only one voucher is allowed per person.  Confused yet?  Visit the government’s website (www.cars.gov) or call a Women’s Automotive Solutions consultant for more information.

Who could benefit from this program?

Critics of this program (myself included) argue that this program won’t benefit most consumers. It doesn’t apply to used car purchases, and most people who drive “clunkers” do so because they can’t afford a brand new car in the first place.  However, there are a few folks who could take advantage of it:

1.  People who buy a new vehicle once in a blue moon, drive it until it almost dies, and then buy a new one again.
2.  Students or young professionals driving an old, college clunker who now have a good job and are ready to buy their first, new car.
3.  Parents who bought their teenager a piece of junk and now want a shiny new car for themselves.

The good news is that the voucher is in addition to (not in lieu of) any dealer incentives and rebates available on the new vehicle.   If you are thinking about taking advantage of this program, contact a Women’s Automotive Solutions consultant to see if you qualify and if the program is right for you.  Even if it’s not, Women’s Automotive Solutions will get you the best possible deal no matter what vehicle you buy – or what you trade in.

Let’s face it – the minivan is so passé!   Here is a list of 10 Car Chick approved vehicles for today’s cool moms.  (I realize that Mother’s Day is not until May, but this gives you a couple of months to start dropping hints!)

1.   Audi A3 - A hot, luxury mini-wagon that will make the other moms drool!

2.   Mazda 5 - The convenience of a minivan (sliding doors), but with the cooler styling of a hatchback.  (It’s a minivan in disguise!)

3.   Honda Accord - Reliable, comfortable, great gas mileage - it’s popular for a reason! 

4.   Ford Taurus X - Has the roomy 3rd row seating of a larger SUV, but with a lower ride height and easier handling.

5.   Lexus ES350 - For the business mom who wants to travel in style! 

6.   Pontiac Vibe - A slightly funky hatchback that is inexpensive but reliable.

7.   Subaru Forester - 2009 Motortrend SUV of the Year.  Need I say more?

8.   Volvo XC90 - Safety, safety, safety!

9.   Toyota Venza - Part sedan, part hatchback, entirely new and cool.

10. Maxda CX9 - For moms who want to have a little fun while hauling the kids.  Zoom Zoom!

“May you live in interesting times.”  With automobile sales down nearly 40%, tighter credit markets, and the Big Three American automakers on the verge of bankruptcy, this old Chinese proverb has never been more true.  (Even the almighty Toyota reported its first full-year loss in more than 70 years!)  The challenges facing the automotive industry today are unprecedented, and that can mean both challenges and advantages for the consumer.  Here are five things you need to know in order to successfully navigate today’s uncharted market:

 1.  Deals, deals and more deals!  For perhaps the first time in history, the supply of new automobiles far exceeds the demand.   Even after production cutbacks, there are still more cars than can fit onto already the overstocked dealer lots.  So, what do businesses do when they have too much inventory?  They have a REALLY BIG SALE!  The level of incentives, including rebates, financing specials and manufacturer-to-dealer bonuses, is astounding -  which is good news for you!  Even small, fuel efficient cars, which rarely need incentives to move, are being discounted.  Be sure to negotiate hard on the price of the car even before the incentives are applied.  The car dealers are hungry for your business, and they know they must compete to earn it.

2.  Beware of creative advertising!  When car dealers are desperate to make sales, they often get very creative with their advertising campaigns in order to entice you into their showrooms.  Offers such as “buy one, get one free” and “$12,000 minimum for your trade” may technically be valid, but they usually come with a stack of fine print that would make an attorney faint.  Be sure to weed through that fine print before signing on the dotted line.  And, remember the old adage, “if it sounds too good to be true, it usually is”.

3.  Credit is tighter, but still available.  Just six months ago, you could get a no-money-down auto loan with a credit score of just 650.  You will likely need at least a 720 credit score to get that same deal today.  The credit crunch has hit the automotive industry, with banks and manufacturer finance companies alike tightening the strings on subprime lending.  Rates on subprime car loans are higher and may require a 10-20% down payment.  You may have a hard time finding those longer 72 and 83 month loan terms, or you may pay a one to two point premium to get one.  However, if you have excellent credit, then you can take advantage of incredibly low rates for 36 to 60 month loans - under 5% at some credit unions!

4.  Fewer lease deals.  Over the past decade, insanely cheap lease deals have allowed Americans to drive far more expensive cars than they could otherwise afford.  Those days are over - at least for the foreseeable future.  The leasing companies are being killed by the number of vehicles coming off lease that have depreciated much more than expected.  Most manufacturers are raising lease rates or even suspending lease programs entirely.  Luxury car makers, like BMW, whose business depends heavily on leasing, will still have good lease programs – but probably not as good as they used to be.

5.  Watch what you buy.  Many cash-starved automakers are looking to cut costs by downsizing their lineups.  Manufacturers are canning poor selling vehicles, consolidating twinned models and even axing entire brands in order to stop the bleeding.  (See side bar for vehicles “on the chopping block”.)  So, is it still safe to buy American, even if it’s a steal?  Yes, it is.  Even in the event of a bankruptcy, the manufacturers will still do everything possible to honor your warranty, and mechanics will still be able to service and repair your vehicle.  (Heck, they still make parts for the Model-T!)  While there are no guarantees, vehicle makes and models always come and go.  It’s just part of the business.  However, the biggest risk is depreciation – orphaned vehicles typically lose their value faster than normal.

Truly, there has never been a better time to buy a car.  With great deals everywhere you turn, purchasing a new car can save you a ton of cash.  And, more importantly, it will also help revive our economy.

Women’s Automotive Solutions needs your help to grow in 2009!   Did you know that car dealerships often spend as much as $250,000 or more PER MONTH on advertising?!?  Yikes!  We would rather spend our precious marketing dollars rewarding YOU for spreading the word about our valuable services. 

Anyone who refers a client to Women’s Automotive Solutions will receive a $25 gas card!  The person who refers the most clients to Women’s Automotive Solutions in 2009 will win the GRAND PRIZE - a $500 VISA gift card!

(Click here for Terms & Conditions.)

The internet can be a wonderful tool for buying and selling automobiles.  You can shop for thousands of new and pre-owned vehicles, 24 hours a day, from the comfort and convenience of your own home – even in your pajamas.  Online marketplaces like AutoTrader, eBay, AutoConsign and Craigslist connect buyers and sellers across the world, but not all of those buyers and sellers are honest.  Thousands of people each year still fall victim to fraud when buying and selling vehicles online.

The most common scam that people encounter when selling a vehicle online is the “419 Nigerian Scam”, also known as the “Advance Fee Scam”.   A prospective buyer emails you (often in very poor English) and says that he is interested in your vehicle and agrees to your selling price.  He claims that he a previous deal fell through, and he has a cashier’s check in an amount that is several thousand dollars more than your selling price.  He says that he will FedEx you the cashier’s check and asks that you wire the difference back to him via Western Union, once the funds have posted to your account.  How trusting of him, right?  Not so much.

It is a common misconception that cashier’s checks are as good as cash, and that they clear the bank within 48 hours.  In reality, your bank is required to make the funds available in your account within 48 hours.  However, it may take up to two weeks for the check to actually clear.  The counterfeit cashier’s check will eventually bounce, and then you are in real trouble.  Not only will you have lost the thousands of dollars that you wired to the scammer, but depositing or cashing a counterfeit check, even unknowingly, is a felony. 

Sellers of automobiles are not the only ones at risk online.  Scammers target eager buyers by posting popular vehicles for sale at enticing prices.  The post looks perfectly legitimate, complete with pictures, VIN and even a free Carfax report.  The seller claims that the vehicle is being stored in the warehouse of a transportation company that will ship the vehicle and handle all DMV paperwork.  To appear even more genuine, the seller says that he will process the transaction through the “eBay Safe Trade”, or similar, department.  No such department exists, nor does the vehicle!  The pictures, VIN and Carfax report have been expertly fabricated or stolen from another seller’s post.  Some scammers even create elaborate, professional websites to make you think that the transportation company, escrow company and “safe trade department” are real.

The online market places work hard to try to protect buyers and sellers from these scams, but there is only so much they (and the authorities) can do.  Most of the scammers live in foreign countries (as evidenced by their abysmal English) and use “spoofed” email addresses.  Even if the authorities could track them down, they are almost always outside US jurisdiction.  So, it is up to you to protect yourself!  Here are five tips to help you avoid falling victim to an internet automobile scam:

1.  Never sell your vehicle to someone in a foreign country.  Think about it – they have cars in Nigeria and other countries, so why would someone want to buy yours and incur the shipping costs and import fees?  Why would someone in the UK, where they drive on the left side of the road, want to buy an American car with the steering wheel on the wrong side? 
 
2.  Never trust someone who offers to pay you more than you are asking for your car.  If an honest person had a certified check for the wrong amount, he or she would simply return to the bank and get a new one.

3.  Be wary of a buyer who insists on using an escrow service to “safeguard” the transaction.  Scammers often setup fake escrow services that claim an affiliation with AutoTrader, eBay, or eTRUST.  None of these companies operates or partners with an escrow service. 

4.  Never ship your car to the buyer or allow a seller to ship a car to you (unless the seller is a legitimate car dealership).   The buyer and seller should arrange to meet and complete the transaction in person.
 
5.  Secure payment for a vehicle before transferring the title to the buyer.  Insist on certified funds, and verify the check with the issuing bank before you release the vehicle. 

Buying or selling a vehicle online can be a fun and financially rewarding experience, but it is not without risk.  Before you buy or sell, review the fraud awareness information provided by the various online marketplaces.  And, above all, trust your instincts.  If something feels hinky, it probably is.

Want to avoid online car scams altogether?  Women’s Automotive Solutions can help you buy OR sell a vehicle!  We’ll make sure you get the best possible price without having to worry about online scams, fraudulent deals, and unscrupulous characters with bad grammar.

My “Pick of the Show” for the 2008 Charlotte International Auto Show is the 2009 Mazda CX-9.  Believe me, I was as surprised as you are.  The CX-9 hasn’t changed much since its introduction in 2007, so don’t ask me how I missed it last year.  Mazdas, in general, have always been solid cars (with a few exceptions), but they have never held my attention for more than a few seconds.   Yet, this year, I found myself enthralled with their sleek, sporty designs and impressive interior styling. 

The CX-9 is a large, 7-passenger crossover SUV that looks like it wants to be a luxury sports car when it grows up, and it is truly fun to drive.  As nimble as a vehicle this size can be, the CX-9 is powered by a 3.7-liter V6 with 273 hp, 270 lb-ft  of torque, and a respectable zero to 60 time of 7.4 seconds. A six-speed automatic transmission is standard, and all trim levels are available in either front- or all-wheel drive.   A stiff suspension system makes for tight handling, which is considered sporty by some, but can be construed as uncomfortable by others.  Estimated fuel economy is 16 mpg city/22 mpg highway, which is average for the class.

All 2009 CX-9s come standard with antilock disc brakes with brake assist, stability control with a rollover sensor, front-seat side airbags and full-length side curtain airbags. (A blind-spot warning system is standard on the Grand Touring model.) The CX-9 aced the front and side crash tests administered by the National Highway Traffic Safety Administration testing, scoring five out of five stars.

The CX-9 also boasts excellent build quality inside and out.  Available with beautiful two-tone leather, red and blue instrument lighting, brushed nickel-look accents and elegant piano black or wood trim, the CX-9’s interior boasts a sporty style that easily competes with many luxury SUVs.  The cockpit hugs the driver, lending to the sports-car feel, and most of the controls are ergonomically friendly and easy to use. My only complaint is that the CX-9 doesn’t have many useful cubby holes for storage.  At least there is a decent amount of storage space (about 17 square feet) behind the third row.

Speaking of the third-row, it’s one of the roomiest you’ll find, and is quite suitable for two, normal-sized adults.  This third row is easily assessable for those two adults, thanks to large rear-door openings and fold-and-slide second row seats.  (The long rear doors can be hard to open in tight parking spaces, but I wouldn’t want to park this beauty anywhere near door-dingers and shopping carts anyway!) 

The 2009 Mazda CX-9 is available in three trim levels. The entry-level Sport starts around $30,000 and comes standard with 18-inch alloy wheels, air-conditioning, full power accessories, a tilt/telescoping steering wheel with audio and cruise controls, a trip computer, Bluetooth phone connectivity, a CD player and an auxiliary audio jack. The more upscale Touring model adds heated mirrors, two-tone leather seating and heated, powered front seats for around $32,000. The $34,000 Grand Touring boasts 20-inch wheels, xenon headlights, rain-sensing wipers, keyless ignition/entry, memory driver seats, interior wood accents, an auto-dimming rearview mirror, funky blue cabin illumination, and a blind spot warning system.   Available options (on most trim levels) include a surround-sound Bose audio system with a six-CD changer, a sunroof, a power rear liftgate, a navigation system with a rearview camera, a stand-alone rearview camera (with rearview mirror display), satellite radio, remote engine start, video game docking station and a rear-seat DVD entertainment system. 

For all you moms (and dads) who need to haul around kids but still want to have fun and look good doing it (without breaking the bank) – this is the one to buy!  Zoom Zoom, indeed.

Safety is a high priority for most drivers when they set out to purchase a new vehicle.  Each year the Insurance Institute for Highway Safety puts the model year’s newest vehicles through a list of rigorous testing and then selects its Top Safety Picks, recognizing vehicles that do the best job of protecting people in front, side, and rear crashes.  Safety Pick winners also have to be equipped with electronic stability control, which research shows can significantly reduce the risk of crashing. 

Thirty-four vehicles received the top pick designation for 2008, as compared with only 13 in 2007:

Large Cars
Audi A6
Cadillac CTS
Ford Taurus
Mercury Sable
Volvo S80

Midsize Cars
Audi A3
Audi A4
Honda Accord
Saab 9-3
Subaru Legacy

Midsize Convertibles
Saab 9-3
Volvo C70

Small Cars
Subaru Impreza

Minivans
Honda Odyssey
Hyundai Entourage
Kia Sedona

Midsize SUVs
Acura MDX
Acura RDX
BMW X3
BMW X5
Ford Taurus X
Honda Pilot
Hyundai Veracruz
Hyundai Santa Fe
Infiniti EX35
Lincoln MKX
Mercedes M Class
Saturn Vue
Subaru Tribeca
Toyota Highlander
Volvo XC90

Small SUVs
Honda CR-V
Honda Element
Subaru Forester

Large Trucks
Toyota Tundra

Ford and Honda boast the most vehicles on the list, and the 2008 Ford Taurus snagged the award for the number one safest vehicle on the market.  (Source: IIHS.org)