When making the decision between buying or leasing a car, some consumers find themselves in a state of confusion. There are factors to take into consideration and pros and cons that come with each option.

When making the decision to purchase a used car there are some pros and cons you should take into consideration. The benefits include a lower purchase price, the possibility of lower property taxes and an overall reduction in the cost of car insurance. The downside is that there are approimately over 2 million vehicles involved in accidents every year. The odds of you finding one of those cars damaged is high. Also, your used car will not include a new car warranty and there is a chance that the vehicle might be prone to problems a lot sooner obviously than if it was brand new.

Consider taking these steps before you even begin the process of looking for a used car. Most dealerships offer Certified, Pre-Owned Vehicles. This is your best bet in the used car market. CPO vehicles on average have less than 50,000 miles and have passed multi-point inspections. Any issues regarding service or repairs are handled before the car is put on the lot. Most automotive companies will include an extended warranty at no extra cost, towards extra parts (like transmission and engine). These will be the cleanest and most well-maintained used cars.

Look for used cars that have a considerable amount, or at least a portion of their manufacturer’s warranty left. Often with later model cars you run the risk of the three year/36,000 mile warranty having expired. If you limit your search to cars that haven't yet hit that mark, you will be searching for a better used car. Make sure to ask if the warranty is one that is completely transferable.

Ask the dealer to provide the vehicle’s service records. If the records are up to date and complete, that is usually a good sign. Now if you are told that the records are unavailable, that is a little suspicious. You want a used car that has been taken care of and is in excellent condition. If the dealer appears as though he is hiding something, even if it is service records, then he usually is. That is why it is in your best interest to have a third-party mechanic look over the vehicle. This might be the exact make/model you are looking for, yet just by looking at it, you have no idea what this car has been through. A mechanic can put the car up on a lift and spot any prior crash damage, corrosion, frame damage that might be hidden and any leaks. Be cautious of a dealer who refuses the opinion of an outside mechanic. That usually means he is aware of damage that you might not recognize on your own.

Your used car must pass the safety and emissions tests given by your state. This is a legal requirement, and will be your responsibilty. You want to avoid any extra costs and fees towards your used car. Make sure it is clear to pass these tests before purchasing. You will not be able to register or drive the car until it passes inspections. Be careful not to sign any “As Is” statements on a contract. By doing so, you are accepting that once the car leaves the lot, any problems are now your problems. About 30 days are necessary to make sure that there is nothing wrong with the used vehicle.

It is very important to conduct a background check on the used car of your interest. Inspecting it on your own and even with the assistance from the third party mechanic will not tell you the history on the vehicle. By searching the National Highway Traffic Safety Administrator’s website (www.nhtsa.dot.gov) you will find valuable information that has been collected by JD Power and Associates. There will be listings that pertain to recalls and safety-related defects. If there are any complaints about this vehicle, the Internet is the place to find them. Consumer Reports is also an excellent source of information.

Finally, take the Vehicle Identification Number of the used car and run a report through a reputable company such as CARFAX or Experian AutoCheck Vehicle History. You will learn about prior accidents, manufacturer buy backs and any fraud towards the vehicle. In the long run you will be thankful for running all of the extra checks before purchasing a used car. If you can’t get a new vehicle, make sure that you get the used one that comes close to being just that.

 There are two things car dealers would like for you not to know. The first is how they are evaluated and the second is how they are rewarded. The evaluation process is based upon their sales goals. The dealership is given annual sales goals to meet and they are on a monthly, quarterly and annual basis. The number of sales set forth in these goals will make a difference on the price you are quoted for a new car. At the end of each month there are some dealers still trying to meet their goals, while others have already reached or even gone past them. Research on reputable Internet sites like Edmunds.com and Automotive.com will give you a better perspective about which dealers are trying to meet their sales goals, and will most likely sell you at car at or below the invoice price.

The Customer Satisfaction Index is another factor involved in evaluations. The CSI ratings are taken from surveys sent out after a car has been purchased. One company that surveys customer’s opinions is J.D. Power and Associates. They typically send out a questionnaire or contact you over the phone, taking information that will help shape the direction of car dealer’s future business. The opinions towards the car buying experience and dealership overall are very important. Be aware when dealing with salespeople, some might try and influence your answers on this survey. Keep this in the back of your mind when you are negotiating your new auto purchase.

Dealers will be rewarded based up their performance on these surveys, their CSI ratings and if they reached their sales goals. The results of the CSI ratings can have a big impact on the car dealership. This will determine any incentives paid to the dealers, if the dealers are invited to car auctions and if the dealership is able to expand their business. If a dealership scores low in its evaluations it will be very costly in the long run.

A big source of income for dealerships is car auctions. By obtaining cars at cheap prices they are able to sell them for a profitable amount. It can work against them though, if they depend too much on auctions and shift their focus off selling new cars that will ultimately hurt their sales goals. Dealers will receive rewards from manufacturers when their sales goals are met. Through manufacturer-to-dealer incentives dealers might receive as much as $100,000. These incentives are not usually made known to the public, but through internet research you might be able to find out what some dealers receive. Dealers would like to keep this information to themselves as best as possible. 

There are a few things to consider before purchasing an extended or new car warranty. Car buyers often make the mistake of purchasing warranties that they know very little about. Before making that decision, it is important to understand the warranty and what value it has for you. An extended automobile warranty will give you protection past the dealership warranty. Aside from many benefits and features, an extended warranty will give you the flexibility and comfort of having your car repaired at the licensed center of your choice.

There are several benefits to an extended warranty. They include 24 Hour Roadside Assistance, repairs for any mechanical breakdowns, replacement of oil or any other fluids and towing to a repair shop in the event of an accident. There are car rental and trip interruption benefits with an extended warranty.

As with any contract, make sure to read the fine print and know exactly what your extended auto warranty service plan covers before purchasing. You might find there are many items not listed within your warranty. Ask yourself what it is you are looking for in an extended warranty, other than Roadside Assistance, car rentals and emergency towing, because sometimes those are the only perks being offered.

The internet can be an important tool in researching auto warranties. Be cautious while reading different websites, but take note of all of the tips on purchasing these extended auto warranties online. Many companies will offer warranties online, just make sure you have found the on that fits your needs. It’s never a good idea to go with the first company you come across. The best company to go with would be the one that keeps its balances high enough to cover any repair costs that might be accrued in the future. Warranty brokers, insurance groups and your car dealership all offer auto warranties.

It might be in your best interest to go with an outside company when purchasing your warranty. If your dealer is offering you an extended car warranty, it’s usually at your expense. This yields an increase in their profits by including the warranty in the financing for your total purchase cost of the vehicle. If you decide to shop around for different sources that can provide your auto warranty, consider a credit union or Internet sources. Buyers typically can negotiate within one-third of a margin of the auto warranty. Expect to pay less towards an extended warranty if your vehicle is low on mileage and age.

Finally, make sure to read the service contracts that are included with the manufacturer’s warranty. On average these will provide coverage for three years or 36,000 miles or whichever is first.  If you typically find yourself trading in your car just about every three years, then an extended auto warranty probably wouldn’t make much sense. Within those new years cars experience little to no trouble. Yet if you like to hang on to your purchase past the three year or 36,000 mile mark, really consider purchasing a new car warranty. It might be the best thing to help extend the life of your car.

There are several ways of saving money on your next car loan. The easiest research you can do is right from your own computer. By using the Internet, you might find that often times the best financing comes from non-franchise, independent financing companies. Usually they will offer the better deal to you, just so they can continue to compete with bigger companies. Dealer financing is usually more expensive because they are using your credit rating while working with banks. There is money to be made from the financing, sometimes even more than off the sale of the vehicle itself.

Did you know by using your home equity that might be the best way to lower interest payments? Typically, a home equity line of credit and a home equity loan will provide lower rates than traditional car loans. This is simply because they are secured against the value of your home. You can even itemize the interest on your federal tax return and it will be tax deductible. A HELOC usually has the lowest interest rate in the beginning, just be cautious since the rate is variable. This will leave you open to the possibility of payments increasing if the rates do as well. This is considered the better option if your loan is looking at 36 months or less in length. Anything over that, a fixed-home rate equity loan is ideal. This has a guaranteed rate for the entire term and would be the best financial choice. Always keep in mind that you are using your home for collateral, so make sure that you never miss a payment.

Watch out for zero interest loans. This might sound appealing, but not if you are giving up a substantial rebate. If you decide to finance and take even a 5% rebate that could add up the savings over a time period on your loan, better than taking the zero interest in the beginning. Consider increasing the down payment toward the vehicle. The idea of no money down sounds good, but usually you will make up for that within a year of car payments. It might be better to hold off on the purchase until you can save more for the down, which will help you to save a lot more money in the long run.

Take a look at your credit report and know your score before entering a dealership. There might be errors that could hurt your rating when the dealer runs a check. If you have time to work on your credit score, hold off on the purchase. Take care of unpaid credit card bills that might be negatively impacting your score. Lenders take into account your credit score and their rates are a direct result from them. If you improve your credit, you might be able to get a better rate.

Car payments have been made affordable for many people through leasing, where you are not paying the complete purchase price for the car. There are online calculators that can help you compare the best auto loans.  A monthly lease payment is usually less than monthly loan payments. Some new cars can be leased for as low as $200 a month, some for even less. Unfortunately, through leasing you lose any resale value once the lease is up. If leasing works for you, watch out for specials if you want the best deal. As with any contract, read the terms and conditions surrounding your lease before you sign. Make sure to completely read the terms of the lease and know whether the advertised monthly payment includes sales tax and fees. If you are paying a larger than average down payment to secure the lower lease rate, take that into consideration as well. A lease is the best choice for someone who is not fiscally sound. 

Know when it is considered the best time to buy a car.  Fall is the season when auto makers would like to get rid of their older models, to make way for the new. Auto financing rates can be reduced greatly if you purchase at the right time of year. Financing a car is sometimes the only way possible for the purchase to be made. Make sure you completely understand your loan and how much you are going to be responsible for. There are good deals to be found, just keep in mind the ins and outs of auto finance so you will get the best financing rate possible towards the purchase of your vehicle.