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Buying a Car  Checkbook logo with link to checkbook.org

We all love the thrill of owning a new car and smelling that new car smell every time you open the door. But do you know what it takes to get a good deal on a new car? If you are looking for a used car, do you know how to avoid getting a clunker?

All of these resources have great information on their websites. Be sure to find out the price the vehicle cost the dealer.

  • Check Out the Dealer:  Find out about the dealership before you go  shopping:
    • Check OCP's Online Merchant Disclosure System for a complaint history.
    • Call the local BBB  to check the dealer's complaint record.

Once you have identified the car you want and a reputable dealer, go take a test drive and be sure this is the car you want. When discussing price with the salesperson, be sure to ask if there are any rebates or incentives in effect.

  • Financing:  If you decide to finance your car, be aware that the financing obtained by the dealer, even if the dealer contacts lenders on your behalf, may not be the best deal you can get. Contact lenders directly. Compare the financing they offer you with the financing the dealer offers you. Because offers vary, shop around for the best deal, comparing the annual percentage rate (APR) and the length of the loan. When negotiating to finance a car, be wary of focusing only on the monthly payment. The total amount you will pay depends on the price of the car you negotiate, the interest rate and the length of the loan.

    Be aware that you may be taking delivery of the vehicle before financing is complete.  This is called a spot delivery or a “yo-yo sale.”  Maryland law does address this practice by requiring certain disclosures.  Before you take delivery of a vehicle, dealers must notify you in writing of the following:
    • The financing or lease agreement you signed is not final until it is approved by a third-party lender.
    • If the financing terms are approved, the sale cannot be cancelled.  If the financing terms are not approved, both you and the dealer have the right to cancel the sale.
    • The dealer must notify you of the rejection of the credit terms in writing within four days of the date you took delivery of the vehicle.
    • Within two days of your receipt of the dealer’s notice, you must return the vehicle to the dealer.  The vehicle must be in the same condition as when it was given to you, except for normal wear and tear.
    • Unless you and the dealer agree to different terms, the dealer must immediately return the down payment, taxes, and any fees you paid.  The dealer must also return your trade-in vehicle immediately and in the same condition as when you gave it to the dealer.
    • You may not be charged a fee for the use of the vehicle.
  • Leasing:  If you are thinking of leasing a new car, be sure to understand all the terms and conditions. How many miles are covered under the lease? What is the price per mile if you go over that amount? Is there any amount due at the end of the lease? What are the early termination costs?
  • Inspect:  Be sure to inspect the car carefully before leaving the lot, looking for signs of any damage or excessive wear/tear. It is generally not a good idea to pick up a car at night when the light is limited.
  • Review:  Before you sign a contract to purchase or finance the car, consider the terms of the financing and evaluate whether it is affordable. Before you drive off the lot, be sure to have a copy of the contract that both you and the dealer have signed and be sure that all blanks are filled in.
  • No Three Day Right of Cancellation:  Remember, there is no cooling off period for a car purchase. If you place a deposit on a new car and then change your mind about buying it, some dealers may be willing to refund a deposit if the purchase is cancelled promptly. If the dealer was to arrange for financing, and the financing agreement has not been signed, you have a right to cancel the purchase. However, before agreeing to the purchase, you should discuss this with the dealer. If they agree you can cancel, you need to get such agreement in writing.

For information on buying a used car, see OCP's webpage on " Curbstoners"

For more information on buying a new or used car, see the Federal Trade Commission's  website.
   

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