Questions to ask before buying a car:

Does it have what you need?

There are “wants” and there are “needs”. You NEED a car that runs trouble-free, has had all the maintenance done on schedule, hasn’t been abused, etc. You may WANT a car with leather, sunroof, navigation, heated seats, convertible, etc. Decide what are WANTS vs NEEDS first to narrow your search down even further to make you decision easier moving onto the next several questions.

Mileage?

Now, I will say this first: mileage is not always an indicator of wear and tear on a vehicle. You can walk away with a low mileage lemon, or conversely, a high mileage gem. However, generally you’ll find that lower mileage vehicles have been either taken care of better or, at least, abused less. Anything above 15k per year is considered high mileage. However, I generally drive 20k per year on my vehicles but I treat them like gold!

How many prior owners?

Again, your experience may vary, but cars with multiple owners can mean several things such as the car was a lemon and kept getting dumped on people, it was passed around a family until it was on its last leg, or it could just mean that it was a lease, and then the dealer bought it and the DMV would show 2 owners (maybe even 3 depending on the original transfer before the lease). Single owner vehicles that are sold quickly could also mean trouble. It could have been a lemon, but then again, the owner might not have been able to afford it and traded down for a lesser model (and took a major hit on depreciation!).

Does the owner have the title?

If you’re buying from a third-party (not a dealer), you want to make sure the vehicle is owned outright. Otherwise, you have to wait for your check to clear, the owner to pay off the car, the bank to send the title and then the owner to hand over the title (without any problems). This could take a very long time and causes a lot of stress and risk.

You do have the option of putting down a deposit (get it in writing, preferably with a witness’ signature) on the car, then go to the bank directly with the owner to buy the car if possible so they can issue the paperwork immediately.

Is it a “clean” or salvaged/branded title?

A vehicle that has suffered damage that was too expensive compared to the vehicle’s value may be salvaged. This can happen through theft, car accident, and other reasons. Some salvaged vehicles are fixed to near perfect fashion and are perfectly safe to buy, but unless you have some knowledge of mechanics and bodywork I wouldn’t make this your first choice. In some states like Nevada, it’s even illegal for a private party to sell a salvaged vehicle.

Has it been in any accidents? If so, how was it repaired?

Accidents do happen. Sometimes they happen more than once. A car accident can range from a small fix to a complete t-bone. The small fix is generally repaired and the owner sent on their way, while the larger incident may result in the aforementioned salvage title.

A rule of thumb is replacement is better than repair. During repair,stuff called “bondo” can be used. This is where a (hopefully) excellent body worker fills in a crush or dent that can’t be pulled out. The vehicle is sanded, painted and sent out the door. Unfortunately, if you don’t have a great body shop, the bondo can warp and looks like putty. It is also a cheap fix and may be indicative of the state of other repairs.

Does it have service records available?

It’s best if you can get dealer-issued receipts, but in cases like mine, where I perform routine maintenance, I write down everything in the owner’s manual and hold onto all receipts. You’ll want this so you can later peruse through the car’s history and find out when maintenance and repairs were performed. It’s best to do it beforehand though, so you aren’t surprised later.

Why are they selling it?

You’ll want to ask why are they selling the vehicle. Most people will answer with 1) we need the money or 2) we want something new. Dig deeper and find out its history, but you’ll have to be prepared with well-worded questions that lead the seller rather than blatantly asking “what’s wrong with it?”. Rarely will people be totally honest with everything they know is wrong, unless they know you might hunt them down when something breaks as you drive away!

Can you have your mechanic look at it?

While the large franchise dealerships generally have reputable mechanics on site, you should be able to request a mechanic look at a vehicle any other time, whether small dealership or private party. If you like the car, tell the salesman: “At the end of our test drive, if I like the vehicle, I’d like to take it to my mechanic for an inspection. You are, of course, welcome to come with me.” A salesman working on commission is very unlikely to deny your request.

Buying the Car

You can buy a car from a dealer or from a private party. Buying a car from a dealer simply means you are buying from someone whose business is selling cars; a dealer can be a major operation with an automotive franchise, or a single individual who sells cars from his driveway. Buying from a private party means you are purchasing the vehicle from an owner.

Dealership

If you are interested only in a brand new car, a large franchise dealership is where you’ll head. Since they order direct from the manufacturer, in some cases, you can even custom order the options you want. However, the depreciation when it rolls off the lot can be a hefty bill to foot. A dealer can always sell a used car for more than you can. Why? When you buy a used car from a large dealer, the assumption is made that the vehicle needs little or no “reconditioning.” All of the major systems are in good mechanical order, the interior has been detailed or replaced as necessary, and you shouldn’t have to take it to a mechanic any time soon. Some dealers go a step further with “Certified Pre-Owned” vehicles which must pass a specific set of inspections.

Used Car Lot

So where do the small dealerships get their cars from? Almost every town has a street lined with small scale dealerships, or that one guy who’s always selling cars. These are not connected to a manufacturer, and generally do not have a (legitimate) body shop or mechanic on site. When cars are traded into dealerships, the dealer will weigh what they paid for the vehicle against what they can sell it for and how much time and money it will take to recondition. Sometimes the decision to ship out a vehicle can be as simple as, “We’re a Chevy dealership, and don’t have a really good chance at selling a Ford Focus with our current lineup.”

These cars are sent to dealer or wholesale auctions. They are sold at a great price to other dealers who then sell them on their lots. The quality of the cars available on these smaller lots vary greatly based on the quality of the lot that is selling them. They are still bound by all of the laws that a franchise dealership is, but if after looking at the vehicle you wouldn’t buy it from a man on the street, don’t buy it from anyone else.

Private Party

You can also buy a vehicle through a private party sale. That means an individual who owns a car is selling it for any number of reasons. Individually owned vehicles sell for much less than a similar one at a dealership due to the reconditioning that a dealer vehicle undergoes (theoretically). The real benefit of buying a vehicle from an owner is a chance to know the vehicle’s history. The service records and accident history can tell you a lot about what you are getting into. Even walking up to the owner’s house: if they’re lawn is littered with trash, how do you gauge the upkeep of your potential new ride?

Negotiate

No matter what you do: NEGOTIATE. I have never walked into a dealership that won’t “haggle” and I refuse to accept a price labeled “firm.” (except for my first car, which was a Saturn and had a no-haggle price. But they’re not around anymore, are they?…) My second vehicle was a dealer demo car with 2500 miles on it, but still sold as new. It was a hot model, just out for its first year, and I got it for $1000 under invoice.

Paying for a Used Car

It should go without saying, but you are always better to pay with cash in hand. If the vehicle you’re looking at is too expensive to buy with cash, take the time to assess if there is a vehicle that you can pay for with cash that will meet your needs. If not, your next step is financing.

All of my purchases were with financing, and up until the last few years, I would pay for years before having the car paid off (if I didn’t trade it in for something else). However, now, I might not have all the cash in hand because I’m selling a car outright while buying something new (to me, so it’s really used), but when I get the cash, I pay off the loan. My credit score takes a hit, but then it goes up because I have a closed account and more history on my record.

Ultimately, if there is any way you can avoid monthly payments, please do so. I have never taken on an auto loan that hasn’t gone underwater for a portion of the vehicle’s life span. If you’re heart is set on a vehicle that requires payments, take three months and pull the payment out of your monthly budget. Make sure it doesn’t throw your debt-to-assets ratio off, because that can hurt you in the future for qualifying for home refinancing, credit cards and other loans (you never know when there’s going to be an emergency). If it’s not bad, then go ahead with the comfort of knowing you already have three months of “emergency” payments set aside.

Websites to Help Your Search

When you go to buy a vehicle, remember that your buying power is directly related to the information you possess.

• Kelly Blue Book is a nationally recognized vehicle valuation tool. It will help you to gauge the trade-in value of your own vehicle, and how much you should pay for you next one through both dealerships and private parties.
• Carfax reports on what has happened to your vehicle. Where has it been titled? Does it have any accident reports? All of these answers and more are available.
• Autotrader.com has detailed specifications, reviews, safety information and classified ads to help you.
• Edmunds.com has similar information to Autotrader, along with a True Market Value tool to help better gauge the immediate local value of some vehicles. TMV takes into account how even the color of your car may affect it’s sale.

1. Get a good estimate on your car is worth

There are a ton of sites out there that tell you what they think your car is worth, but you need to get an evaluation from many sources. I advise doing at least the following:

• Get the True Market Value (TMV) from Edmunds.com. Be honest with the condition of your car because very few cars will really sell for the “Excellent” price. Most cars are Good or Fair. Same goes for
• Kelly Blue Book (kbb.com). Keep in mind though, that these sites are often what vehicles are listing for, not always what they’re selling for. Look at the trade-in and private-party values and know you’ll probably have to settle somewhere in the middle (unless you have a hot car, which depends on the market).
• Take it to CarMax for a free estimate, if you have one around. They’ll even give you an offer on the spot, but in my experience, it’s often a very disappointing offer. But remember, they’re buying it to resell so they need to make a profit on it. If you’re in a pinch, this is a fast way to sell it, but you need to come up with the remainder to clear the lien on the car.
• Look at local listings on sites like AutoTrader.com, Cars.com and local classifieds to get an estimate of what other cars like yours (make, model, year) and even in the same category (SUV, midsize sedan, truck) are listed for. Remember again that even if something is LISTED for a price doesn’t mean it’s going to SELL for that price.

2. If you don’t have cash, get a loan to pay off the “remainder”

If you’re willing to take the hit on the car and just have to sell, then contact your local bank or credit union to get pre-qualified for a loan to pay off the difference when the sale is ready to happen. You may have collateral you can put up for the loan, or it may be an unsecured, higher rate personal loan, but it’s impossible to finalize a sale when you still owe money on the car. The bank just won’t release the title to you for you to transfer.

3. Make your car nice and shiny

No one wants to buy a dirty car, so pay the $100 or so to get it detailed inside and out. It won’t get rid of dents and big scratches, but it’s been proven that a detailed car will bring in the extra money to at least pay off what you spent on the detailing AND help sell it more quickly. If you’re good enough, you can save even more by doing it yourself.

4. Advertise, Advertise, Advertise!

When I sell my cars, I put it up on Cars.com and Craigslist. I put window stickers and have even created a webpage for one car (I already pay for the hosting, so the extra $10 for the catchy domain name was worth it). I referenced the cars.com ad and my website on craigslist, and vice-versa to make sure people cross-shopped (and I made sure all the sites stayed updated if I changed the price). Also, most important, include flattering photos of the car. Remove any junk or personal items, find a generic location where you won’t have people walking into the shot or other cars crowding in and shoot away. Look at some professional car reviews and how they take photos and try to emulate them.

Once your car is sold, consider buying a very cheap, used, reliable car ($2k or so), or use public transport and rental cars if you have the option. Take the money you’ve saved on that monthly payment and put it towards that loan. If you didn’t have to take out a loan, put it towards a “car fund” and try to pay cash or mostly cash for your next car!

1. Thinking only about monthly payments. I used to think like this, and some of my close family members and friends have done so in front of me recently, but it’s the wrong way to think! Think about a) how much the overall cost is, then b) if you can really afford it in the long run (especially if something happens physically or financially) and c) how much will you be spending extra in interest.
2. Buying more than you need. Heck, I bought a new car thinking we were going to start a family, but that family never came and we were stuck with a gas-guzzler.
3. Adding on extra features without realizing the real extra costs involved. It’s easy to think “I might need All Wheel Drive (AWD) sometime in the 5-10 years I’ll own this vehicle”. You’ll spend extra on the vehicle, extra on gas and extra on repairs since an AWD system is more complex.
4. Buying new versus used. Generally, used will save you money, if you get it properly inspected first and it’s a reliable brand/model to start with, because someone else has paid for the depreciation. However, it all depends on what you’re buying and how much you’re spending. Sometimes, factory and dealer incentives bring the price of a new car almost down to the cost of a used car, but don’t forget you can also haggle on used cars.
5. Zero Down. If you’re buying, you should have first built up a decent savings for a down payment. Why? Because it 1) brings down your payments, 2) brings down the interest you’ll pay overall and 3) help with financing. Banks feel better about giving you money if you’re putting in a chunk of your own too.
6. Test Drives. There’s so much to say about test drives, but not enough room. You’re spending a huge sum of money, but you’re only allowed a few minutes of driving around the car? I call BS! I understand dealers want to keep mileage low, but if you’re serious about buying, then make it known and the dealer will be more comfortable with you taking it out on longer drive. Also, pay attention to every single thing and pretend it’s your daily driver. Don’t get suckered in by the newness of it all. Lastly, make sure you’re driving the model with the specs that you’ll eventually buy. We test drove a Passat 4 cylinder but bought a 6-banger without test-driving it. We wished for the next 12 months of ownership that we had bought the 4 cylinder because that car drank glass like your Uncle Bob drinks eggnog at Christmas!
7. Negotiating. Again, so much to say, but basically do your research on sites like Edmunds.com and find out invoice price. Know the dealer spent less than that (called “dealer holdback”), but don’t haggle DOWN from MSRP, but start with the rock-bottom price and see how low you can keep them.
8. Shop Around. You’d be surprised with how far a dealer would discount to get your business. Our neighbors recently used the internet to cross-shop a Honda Pilot across a dozen local dealers and ended up getting $5000 off and it was from the best-rated dealer in the area. It took time and patience, but it worked for them and got the car they wanted down into their budget.
9. Research Financing Options. Don’t just go with dealer financing unless it’s an amazing rate. If you’re part of a credit union, or your bank is having a financing offer, get pre-approved so you save yourself the hassle of refinancing later (and taking another ding on your credit score).
10. Trade In Value. I’ve sold a half-dozen cars now, and I know that selling on your own, rather than trading in, can be a pain. However, you’ll almost always gets much more out of a private party than as a trade-in. Don’t be impatient and just take what the dealer is offering. If you have a Carmax around, get the free appraisal so you have a starting point.

Whew! Any other mistakes you can think of? What about your personal stories?

While many boomers will say that the golden age of motoring is long gone, I would beg to differ. Speed, gadgets and safety have never been cheaper, as are interest rates, and supplies are staying high on many new vehicles.

So why wouldn’t you buy a new car if you’re looking at one?

Well, I have a few arguments against buying a new car. Some are common sense, some not. And being a car geek myself, I know that many of you will just try to reason yourself out of many of them anyway, but here goes…

Money

The first obvious reason, although maybe it isn’t that obvious to some, is the instant depreciation of your vehicle when it’s signed over into your name and you drive it off the lot. Maybe you negotiated thousands off the price or got a 0% interest rate, but you’ll still lose money on the deal thanks to the taxes you paid and the value lost from the title transfer (you’re now owner #1 and each new owner makes the vehicle lose more value).

Now, if you’re looking at 1-2 year old vehicles right now, you might also want to compare against a new vehicle due to the high price of used cars now (at least fuel efficient ones), but older than 2 years, the better for you thanks again to, you guessed it, depreciation. Luxury models take an especially hard hit.

For instance I was looking at 4-5 year old Mercedes S-Class sedans. These retailed for $80-$120k and are now selling for $25k-35k with only 50k miles on the clock. Another example are Porsche 911′s. Once going for close to $100k, you can find a ton for a half or third of the price. You can look like a baller without dishing out like one.

But what about repair costs? Well, do your research to make sure you’re not buying into a junker and you’ll find that the huge wads of cash you saved buying used will stay in your pocket. While you might love the idea of a factory warranty, it rarely helps you in the first few years so you’re paying for something you won’t use. You can always buy an extended warranty with the money you’ve saved to get some peace of mind, and stash away the rest in a “car fund” to take care of the remaining worries. Again, though, just perform your due diligence when you first inspect the car for purchase and you’ll find that a second-hand car will almost always be a better financial decision.

That Green Stuff Outside

When you buy a new car, you’re destroying the planet!

Even if you’re buying a hybrid, a Volt or a Leaf, you’re buying something new that had to be produced with new and recycled resources. If you’re buying a used vehicle (or deciding to just keep your existing car), the damage has already been done. You can’t change the laws of science: if it’s made, it’s made and if it’s not, it’s not and you have to use up new stuff to make it.

Sure, if you’re driving around in a Hummer for 200,000 miles versus a tiny Ford Fiesta, the emissions and oil usage (and the impact to the roads over time) may actually outweigh the environmental cost of making the Fiesta, but in the end, it’s usually cheaper and better for the environment to just keep what you have or buy used (and downsize) as it’s not taking up new resources.

Safety

The newer the car, usually the safer it is. However, in the last decade, most of the big safety improvements have been made and now it’s up to “nanny technology” to improve more. Things like adaptive cruise control and blind spot warning systems will help avoid collisions, but they’re expensive additions, weigh down vehicles and may even end up being more of a distraction than a help to some (think of when “Cruise Control” first came out. People actually thought you could set it and let go of the wheel and let the car drive itself). This leads to…

Driving Pleasure

Having the latest gadgets and gear is only enjoyable (for most people) within the first few hours, days or weeks of ownership. After that, it’s the same old thing. A Lexus can feel like a Toyota and a Mercedes can feel like a Chevy (not saying Toyotas and Chevys are bad…they’re just not considered “luxury transport full of new toys”).

Also, I mentioned “nanny technology”. Features that are installed to improve your safety usually take away from your control of the car and the ultimate fun you can have. If you’ve ever watched Top Gear, think about how many times they complain about traction control when they’re at a track and how some cars won’t let you turn it off anymore. Sometimes the older cars are just more fun.

But…

I’ll admit I love new cars, new technology and just reading about what’s the next big thing in vehicles. Every day I’m conflicted whether my next car should be new or used, and how long I should keep my truck. I love the “new car smell” (even though it’s really just the smell of deadly chemicals from the manufacturing process ) and can’t resist driving through dealer lots once a month.

I myself can’t guarantee my next car won’t be new and I’ll have gone against all I just wrote, but at least I’m putting out there what you (and I) should be thinking about when we’re in the car market.

As with many charities there is a lot of money spent on acquiring donations. In fact, some charities spend the majority of their funds on acquiring more donations – leaving a lot less for the actual charity recipients themselves. This is why some people choose not to give to charities that solicit donations.

With the car donations, it is even worse. There are many For-Profit companies that advertise as a means of donating your car to charity and they leave very little left for the charity. They typically leave the charity 50% to as little as 10% of the value of the car – and keep the rest as their revenue.

The better way to find a place to donate your car

Since the charity car donation thing has gained so much interest, quite a few charities now have this as an option – even though you may never see them advertise it. So, next time I donate a car, I am going to call charities that I am already familiar with and trust and ask them if they accept car donations. Not every charity will accept them, but you might be surprised how many do.

To find great charities check out Charity Navigator or the BBB.

Drop the car off – if you can

While it may seem obvious, it is a better idea to drop the car off at the charity rather than having it picked up. Your car won’t be picked up for free – they will incur some kind of expenses picking up your car from your house – and these are dollars that won’t be going to the charity recipients. So, if you have the means, dropping it off would probably be a better move.

Transfer of Title

In order for the charity to become “legal” owners of the vehicle, they are going to need to title. It is a better idea to fill out the transfer of ownership section rather than leaving it blank. And it may be a good idea to let the DMV know the transfer as well. If the car has a license plate, you’ll need to return the plate to the DMV (depending on state), and may even need proof of the “method of disposal”.

Taking the tax deduction

According to MSNBC, “If your donation is worth more than $500, you’ll have to attach IRS Form 8283 to your tax return. If it’s worth more than $5,000, your documentation must include an outside appraisal. You’ll also need proof of the donation, such as a receipt from the charity and a copy of the title change.”

Edmunds.com, purportedly “where smart car buyers start,” has a giant database of cars, including reviews, pricing, and specs. The site provides information on new and used cars, as well as advice on how to shop for and how to finance cars. Best of all, it can offer your searches tailored to your location!

Consumer Reports is pretty much the gold standard when it comes to rating consumer goods. Its website has a solid section on cars. Unfortunately, the most helpful offering – expert ratings – is available to subscribers only. But this site is still worth a look; there are many informative articles freely available.

Car Talk is a radio show about cars, but if you can’t catch the show, I highly recommend checking out the wealth of resources on their site. Look specifically at their “Actual Car Info” section for tips on buying, selling and more.

Car and Driver offers car news and brief online reviews of many makes and models. Best of all – no subscription necessary. If you don’t want to shell out the bucks for a Consumer Reports subscription, check here for a starting point on your car search.

Kiplinger’s Personal Finance has it’s own Car Buyer’s Guide. The guide is actually an extensive resource covering:

• Kiplinger’s rankings of new and used cars
• Tips on test-driving, negotiating, and getting car loans
• Information on mileage and features

Some of the articles have previously been published in the magazine or on the website, but now they reside with new content in one convenient location.

Bankrate.com has a section dedicated to auto loans. You can search for low rates, learn how to shop for the best loan, and read articles on making car ownership more economic.

Any other tips for research cars? I can also add forums dedicated to that car model, Cars.com, Motor Trend and more, as well as fellow blogs about cars. Ultimately, pick a car that fits your needs, driving style and budget.

Brand perception – Top 5

1. Toyota – 193
2. Honda – 149
3. Ford – 109
4. Cadillac – 102
5. Mercedes-Benz – 100

Brand Perception – Bottom 5

5. Jeep – 21
4. Hummer – 19
3. Saab – 18
2. Mazda – 17
1. Suzuki – 7

Ok, I won’t disagree that I perceive most of those brands as high or low quality, but let’s see what their real reliability scores indicate as the best brands:

Real Brand Reliability – Top 10

As a note, these are results based on Consumer Report’s annual reader surveys and are not based on data directly from the service divisions of the automakers. That means these results are still a bit skewed, but at least are based on real data:

1. Scion
2. Acura
3. Honda
4. Toyota
5. Lexus
6. Infiniti
7. Subaru
8. Hyundai
9. Mitsubishi
10. Kia

Scion huh? Well, it’s run by Toyota, but many people still aren’t familiar enough with Scion products to rank them highly. Plus since they market to “budget shoppers”, people automatically think they’re lower quality.

The biggest surprises on the list are Hyundai and Kia. Apparently their public relations departments aren’t getting the word out to consumers. People still think of Hyundai as a cheap Honda knockoff, and most probably can’t spell the name correctly. Hopefully the new Hyundai Genesis will prove people wrong, as it continues to receive accolades for build quality and value.

Car Brands Offering Free Maintenance

BMW

BMW calls its maintenance plan “BMW Ultimate Service” which goes for the first 4 years of ownership, or the first 50,000 miles. Here is some info about the plan (from the BMW website):

• BMW Maintenance Program: One of the most comprehensive maintenance programs in its class covering all factory-recommended maintenance, oil service and fluid service, as well as items that need replacement due to normal wear and tear – such as brake pads, brake rotors and wiper blade inserts.
• Four years of the BMW Assist™ Safety Plan: Many 2007 and later models include a four-year, unlimited mileage subscription to the BMW Assist™ Safety Plan including TeleService, an exclusive BMW benefit which allows your vehicle to contact your BMW center directly when it needs service or maintenance.
• Unlimited-Mileage Roadside Assistance: Receive Roadside Assistance 24 hours a day, 365 days a year for the first four years of ownership, without any mileage limitation.
• New Vehicle Limited Warranty: Your warranty covers defects in materials or workmanship for the first four years or 50,000 miles, whichever comes first, so you can rest assured your BMW will perform as expected.

MINI

MINI is owned by BMW, and benefits from its parentage by also getting a free maintenance program. Unfortunately for MINI owners, the plan isn’t as generous as BMW’s, but it does cover  3 years or 36,000 miles. We have a MINI and can attest that the plan is transferable if you sell the car. We bought our MINI with 30,000 and were able to take it in for the regular checkups and oil change, etc.

You also have the option to extend the maintenance plan, but at an additional cost. Talk to a MINI service technician to find out how much it would cost. As a note, the cost does differ depending on whether the car is under or over the 36,000 miles when you buy the extended plan.

Land Rover (2008 Models Only)

While Land Rover was recently sold by Ford to an Indian automaker, they still offer the no-charge maintenance program for 2008 models for 4 years or 50,000 miles.

Land Rover says it’s not changing the prices for the 2009 models, but they are dropping free maintenance to save themselves some money. Personally, if there was any vehicle I would want free maintenance on, it would be a Land Rover, but at least you have their warranty coverage.

Saab

Surprise!  Saab provides free maintenance for 3 years or 36,000 miles. I bet you didn’t know that, did you? This goes for 2007-2009 models (so far), but it could change at any time in today’s economy.

Another perk for Saab owners is free OnStar for the first year. If those scary radio commercials that play real-life accident recordings don’t scare you into getting OnStar, then I don’t know what will.

Volvo (2009 Models Only)

New to the mix for 2009 is Volvo, which is providing free maintenance for 3 years or 36,000 miles.

Volkswagen (2009 Models Only)

Yep, VW has also recently added free maintenance to its 2009 models. The plan covers 3 years or 36,000 miles, and having owned a VW Passat myself, I know how expensive even the most minor maintenance items can be on a VW. They wanted $40 for a wiper blade! Just one wiper blade! And you can’t find many VW parts at your local auto supply shop either. That’s when we decided to sell the VW…over a measly wiper blade.

Who Doesn’t Offer Free Maintenance?

You’ll notice that a few major luxury makers don’t offer free maintenance. Some previously offered free maintenance, but have recently discontinued those plans. Also, you might run into some dealerships providing “free maintenance plans”, but it’s either just for that dealership, or they include the cost elsewhere on the bill of sale.

• Mercedes Benz – I’m very suprised that MB doesn’t offer free maintenance
• Acura – I’ve owned an Acura TL-S, and maintenance costs weren’t too bad, but having those costs paid by the manufacturer would be nice
• Audi – You can buy their Audi Care package for $650, which covers about 5 years or 45,000 miles. Why does VW get free maintenance, but not Audi?
• Jaguar – now owned by the same company as Land Rover (Tata, an Indian motor company)
• Lexus
• Infiniti
• Lincoln
• Cadillac

While automakers factor in costs like maintenance in their overall pricing plans, that little perk is enough to make many buyers choose a BMW over an Acura or Benz. The American automakers could make a believable attempt at stealing market share from the Japanese and Europeans by offering free maintenance too.

As a buyer, you need to also do the math on both the initial cost of the car as well as ownership costs such as maintenance and repairs. If you can get an Acura TSX for $5,000 less than a BMW 328i, then I think that’s a good deal. You won’t spend $5,000 on brakes and oil changes over 5 years. But buying is both mathematical and emotional, so choose wisely.

Although recently named one of the safest cars in the U.S., the Mercury Sable is on the chopping block at Ford, along with its stablemate, the Taurus X crossover. Both are pinned to the Ford Taurus (previously called the Ford FiveHundred), which is being redesigned.

Neither the X nor the Sable have had much success in the marketplace, even though the Sable has received pretty high accolades (for safety, pricing and comfort). However, the public just didn’t like the Sable’s bland styling, and Ford is introducing the next generation of the Taurus in the spring.

The Taurus X is being phased out in place of the new Ford Flex, which is admittedly a much better vehicle, even if its boxy styling is a bit controversial.

Personally, in my opinion the Sable was a slightly better-looking vehicle than the Taurus, but both are pretty boring to look at and drive. Ford didn’t advertise the Taurus/Sable/Taurus X nearly as much as the Fusion, and thus sales suffered.

CNN published an article today title “Pop goes the market: Detroit’s auto bubble woes” that chronicles the numerous mistakes Detroit made in offering 0% financing (among other creative financing options) plus huge rebates and cash back offers. Not only did the strong sales make the automakers think they were on the right track, it also caused them to make some risky deals with the UAW that they can no longer live up to thanks to the down economy:

The strong sales also allowed General Motors, Ford Motor and Chrysler LLC to generate healthy profits, which led them to agree to contracts with the United Auto Workers union that they ultimately couldn’t afford over the long-haul.

Plus, they all added factory capacity, thinking that the demand would last forever. But all good things must come to an end, and that’s what automakers (even Toyota) are realizing now. One shocking statistic is the number of cars compared to the number of consumers:

In 1998, there were about 12 million more vehicles than drivers in 1998. By 2006, the difference grew to 34 million.

Wow! No one thought that supply might outrun demand someday? But the auto companies thought they could continue the 16 million+ sales year-over-year. Now 12 million sales in a year might mean a good year for a single car company.

Why bring all this up? Well, because the automakers need to justify why they deserve the $25 billion bailout up for grabs from Congress. If they can’t prove relevancy even if they get the money (thanks to no demand), then why give it to a company about to go bankrupt anyway?

Even with the discussions of Ford shedding Volvo and GM potentially dropping Buick, Pontiac and Saturn (and of course Hummer), it may not be enough to save the companies. It’s no easy task to drop a product line. Oldsmobile cost GM millions to discontinue thanks to payoffs to dealers and employees. And who wants to buy a product line so tied into GM’s other products like Buick and Pontiac? These brands don’t have much of their own unique products (except the G8), so you would be buying the factory capacity, brand awareness and, uh, debt.

The auto industry is in for some serious growing (more like shrinking) pains, and it won’t see the light of day for at least another 4-5 years. By then, maybe we’ll see a Chinese Corvette on our shores