heart_and_
repairs but also for the dimunition in value of the car (e.g., it's no longer a car that's never been in an accident, for which a buyer might pay a bit more). My Calif ins agent says, on behalf of the major national insurer for which he is a captive agent, 'no'. Who's right?
Answer
First of all, this is going to vary by state.
MOST policies have rewritten COLLISION coverage to EXCLUDE dimunition of value. I'm not saying there's not a policy out there that still has it, I'm just saying, if there is, I don't know about it.
On the other hand, the PROPERTY DAMAGE part of your policy - if the accident is YOUR fault, and you damaged someone elses car, well, that WILL cover dimunition of value, in MOST STATES.
So you can't get first party dimunition of value, but you can get third party dimunition of value. Collision is a first party coverage only - so I'm siding with your agent. You could only collect it under someone ELSE'S policy, if they were at fault for the accident. Not your own.
First of all, this is going to vary by state.
MOST policies have rewritten COLLISION coverage to EXCLUDE dimunition of value. I'm not saying there's not a policy out there that still has it, I'm just saying, if there is, I don't know about it.
On the other hand, the PROPERTY DAMAGE part of your policy - if the accident is YOUR fault, and you damaged someone elses car, well, that WILL cover dimunition of value, in MOST STATES.
So you can't get first party dimunition of value, but you can get third party dimunition of value. Collision is a first party coverage only - so I'm siding with your agent. You could only collect it under someone ELSE'S policy, if they were at fault for the accident. Not your own.
Tips on buying a new car?
Lexi
I'm about to start shopping for my first brand new car. I've never had to deal with car salespeople before though. My first car was given to me and my 2nd car I bought from my mom. How should I go about this? How do I make sure I get a good deal and not get screwed over?
Answer
Do ALL your research online first!
I remember my first new car ... I had never 'haggled' for a purchase before, did not know how the whole system worked. I basically got talked into screwing myself ... paid way more than the car was worth, got a lousy loan. All because I did not know what I was doing (although it's worth noting this was before everything was online, and there weren't useful resources like this to learn from).
My last new car (4th in about 15 years), I did everything online. I researched the various vehicles that I was interested in (I highly recommend these websites for research: http://www.kbb.com [Kelly Blue Book] and http://www.edmunds.com ... they are both excellent sources), then contacted a couple local dealers online (using the tools available from Edmunds if I recall correctly) and basically made a deal via email to get the car at or below MSRP. I did go to the dealership in order to test drive the vehicle and finalize the deal, and they kept trying to switch me away from their "internet sales manager" to a regular sales guy, so watch out for that trick! If you make a deal with a sales guy online, then he has to be the guy you sign with!
I think (it's been a while since I checked) that sites like KBB and Edmunds have buyer's guides that will help explain how dealers work ... how they do the whole 'haggle' process.
If for some reason you can't make the deal online, and need to go into a dealer to do the old-fashioned 'haggle' process, here are a few tips:
Before you go into the dealer, you need to know exactly how much you are willing to pay.
You need to determine if you want a loan, and if so, what kind of loan would you be eligible for.
Will you be trading in a vehicle? If so, be aware that dealers usually use the NADA guide and not Kelly Blue Book to determine trade in value ... NADA gives way way way lower values than KBB or other rating guides. You can estimate your trade-in value with NADA here: http://www.nadaguides.com/
Consider going to your bank/credit union/favorite lender (have you looked at LendingTree.com? I like them) to apply for a new auto loan before you go to the dealer. Many lenders have online tools that will help you calculate what you can afford, and you could even apply for the loan online. Most online car loan calculators can take into account the trade in value or cash down payment when estimating your loan details.
A cash down payment usually makes the dealer more willing to "deal" with you, and they don't actually like trade-ins because that just makes more work for them to try to re-sell the used car at a profit. It might make more sense to sell your old car yourself instead of trading it in.
If you know you have very good or better credit, you should not accept any loan rate higher than 8%, no term (length) longer than 5 years. If your credit rating is "less than perfect" as they say in the commercials, then you may not have a lot of choice in the types of loans you can get.
The sales guy will try to avoid telling you what the actual purchase price is (price is not set in stone, MSRP is only a recommendation and the dealer can ask for as much as they want ... that's known as "dealer markup" aka "asking price").
They try to make you focus on monthly payments ("you can afford this much, can't you?") ... that is a trick. Sure you might be able to afford XXX dollars a month, but they aren't showing you for how long, or at what interest rate. Making a deal based on that info could end up costing you thousands of dollars more than it should.
If they do that, just keep saying "let's talk about the cash price". Try to get them to settle on an actual purchase price before you discuss other details like loan or trade in.
Some dealers hate it if you walk in with paperwork (for example, print outs from Edmunds or KBB showing what you *should* be paying for a particular car). It's a Catch-22 situation ... you ought to do that to inform and protect yourself, but it might cause the sales guy to jerk you around for a while. Some sales guys are nice & straight-forward, and some are jerks.
You can't tell by appearance which is which. The core issue there is that the sales guy gets paid on commission ... he has an incentive to get you to pay as much as possible for a car in order to boost his own paycheck. The most flexible sales guy is often one who hasn't made quota and is desperate to make sales. He'll take less profit in order to make quota. Someone who has already made quota doesn't have that incentive to deal any more, and he'll be more willing to play you out.
Another sales trick is if you have a trade-in vehicle with you, the sales guy will tell you that they need to "check out" the car to figure out it's trade-in value, so they ask you to hand over the keys, but what they do is hide the keys and then make you wait ... and wait ... and wait. The longer they make you wait, the more impatient you become to fin
Do ALL your research online first!
I remember my first new car ... I had never 'haggled' for a purchase before, did not know how the whole system worked. I basically got talked into screwing myself ... paid way more than the car was worth, got a lousy loan. All because I did not know what I was doing (although it's worth noting this was before everything was online, and there weren't useful resources like this to learn from).
My last new car (4th in about 15 years), I did everything online. I researched the various vehicles that I was interested in (I highly recommend these websites for research: http://www.kbb.com [Kelly Blue Book] and http://www.edmunds.com ... they are both excellent sources), then contacted a couple local dealers online (using the tools available from Edmunds if I recall correctly) and basically made a deal via email to get the car at or below MSRP. I did go to the dealership in order to test drive the vehicle and finalize the deal, and they kept trying to switch me away from their "internet sales manager" to a regular sales guy, so watch out for that trick! If you make a deal with a sales guy online, then he has to be the guy you sign with!
I think (it's been a while since I checked) that sites like KBB and Edmunds have buyer's guides that will help explain how dealers work ... how they do the whole 'haggle' process.
If for some reason you can't make the deal online, and need to go into a dealer to do the old-fashioned 'haggle' process, here are a few tips:
Before you go into the dealer, you need to know exactly how much you are willing to pay.
You need to determine if you want a loan, and if so, what kind of loan would you be eligible for.
Will you be trading in a vehicle? If so, be aware that dealers usually use the NADA guide and not Kelly Blue Book to determine trade in value ... NADA gives way way way lower values than KBB or other rating guides. You can estimate your trade-in value with NADA here: http://www.nadaguides.com/
Consider going to your bank/credit union/favorite lender (have you looked at LendingTree.com? I like them) to apply for a new auto loan before you go to the dealer. Many lenders have online tools that will help you calculate what you can afford, and you could even apply for the loan online. Most online car loan calculators can take into account the trade in value or cash down payment when estimating your loan details.
A cash down payment usually makes the dealer more willing to "deal" with you, and they don't actually like trade-ins because that just makes more work for them to try to re-sell the used car at a profit. It might make more sense to sell your old car yourself instead of trading it in.
If you know you have very good or better credit, you should not accept any loan rate higher than 8%, no term (length) longer than 5 years. If your credit rating is "less than perfect" as they say in the commercials, then you may not have a lot of choice in the types of loans you can get.
The sales guy will try to avoid telling you what the actual purchase price is (price is not set in stone, MSRP is only a recommendation and the dealer can ask for as much as they want ... that's known as "dealer markup" aka "asking price").
They try to make you focus on monthly payments ("you can afford this much, can't you?") ... that is a trick. Sure you might be able to afford XXX dollars a month, but they aren't showing you for how long, or at what interest rate. Making a deal based on that info could end up costing you thousands of dollars more than it should.
If they do that, just keep saying "let's talk about the cash price". Try to get them to settle on an actual purchase price before you discuss other details like loan or trade in.
Some dealers hate it if you walk in with paperwork (for example, print outs from Edmunds or KBB showing what you *should* be paying for a particular car). It's a Catch-22 situation ... you ought to do that to inform and protect yourself, but it might cause the sales guy to jerk you around for a while. Some sales guys are nice & straight-forward, and some are jerks.
You can't tell by appearance which is which. The core issue there is that the sales guy gets paid on commission ... he has an incentive to get you to pay as much as possible for a car in order to boost his own paycheck. The most flexible sales guy is often one who hasn't made quota and is desperate to make sales. He'll take less profit in order to make quota. Someone who has already made quota doesn't have that incentive to deal any more, and he'll be more willing to play you out.
Another sales trick is if you have a trade-in vehicle with you, the sales guy will tell you that they need to "check out" the car to figure out it's trade-in value, so they ask you to hand over the keys, but what they do is hide the keys and then make you wait ... and wait ... and wait. The longer they make you wait, the more impatient you become to fin
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