consumerism

Did I say “academic success”? Sorry, I meant “shoving consumerist lifestyles down the already-choked-by-debt throats of Americans.”

I was visiting a local Best Buy store to pick up some blank CDs, when I saw this “Back to School Tech List” displayed near the customer service desk. It starts with a nice Lifehacker-style title: “Top 15 must-haves for this year’s college students“, but the rest of it is essentially a big load of crap.

Here are the first eight essential tips for academic success:

And here are the remaining seven essentials for college life:

They probably missed #16 - apply for a Best Buy credit card with 32424531% APR, and then keep making minimum payments. Now, that’s also an essential aspect of academic success and college life.

A more appropriate title would be “Top 15 must-haves to start school with credit card debt“.

All these years I was under the impression that academic success depended on how hard you study, how well you understand, and how diligent you are with your homeworks and assignments. Things have probably changed now.

I am just picking on Best Buy because I happened to have their ridiculous list in my possession; however, these type of lists are fairly common in many retail shops around this time of the year. The back-to-school shopping business is really bloating up into a Thanksgiving/Christmas style shopping mania. Sharon @ The Frugal Duchess has some interesting thoughts and numbers on the subject. She also refers to an interesting report by National Retail Federation (NRF) which says that back-to-school spending will exceed $18 billion this year. It’s probably a coincidence, but this is what I found in the report:

“Electronics have evolved from luxuries to necessities, not only for college students but also for their younger siblings,” said NRF President and CEO Tracy Mullin. “While some students may be pleading with mom and dad for an iPod or a cell phone, parents are also investing in desktop or laptop computers, educational software and printers to support their children’s learning.”

I guess that’s where Best Buy picked up it’s *essential* tips from.

Many months ago, I wrote this post “Students, Laptops, Digital Cameras, Huge Cars, and Debt“. Some of you will find it interesting in light of the above discussion.

[Quick note: I mentioned "porn" near the Geek Squad logo in the first image above; read this article and this article on The Consumerist to know more about it.]

Think over this statement for a while:

The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments. - Mad Magazine

Probably, people don’t realize it, but one such elephant is already being sold to a great many American families through easy payment installment plans - it’s just that this elephant is packaged and labeled as the American dream.

By the end of the 1920s, installment plans had become the primary way for a middle-class family to attain a piece of the American dream. People who had formerly shied away from acquiring debt now accepted installment buying as a means to finance modern consumption. This transformation in consumer attitudes resulted from a gradual change in the depiction of installment buying in advertisements. Retailers increasingly utilized this medium in order to convince consumers to buy on installments, both influencing and reflecting popular perceptions of this practice. By the eve of the Great Depression, they had intimately linked installment buying to the attainment of the American dream, a legacy which remains with us even as the twentieth-century draws to a close. [source: The Advertising of Installment Plans]

Instinctively, fingers first start to point towards unscrupulous sellers who encourage and facilitate over-consumption; however, the way I look at it, companies/agents/retailers might just be exploiting our messed up consumer attitudes and our pursuit of unreasonable material *dreams* (read greed). It’s probably more about people who are trying to buy elephants on easy monthly payments than it is about unfair marketing by irresponsible sellers who are trying to sell elephants - to those who are looking for elephants (think subprime mortgage mess).

Sometimes, I wonder what exactly is the American dream. Is it the extraordinarily fancy house or the unnecessarily large luxury car or the mortgage or the credit card debt? or is it just the thrill of paying for elephants through easy installment plans?

Technically, this is not a “used car” topic, but I will still present it as a part of the series because it’s one of the common questions faced by people who are looking for a car - used or new. Even if they are in the market for used cars, they will spend a few hours toying with the idea of getting a car on a lease - because of the lure of low monthly payments.

In extremely simple terms, when you lease a car, you are simply paying for the depreciation, instead of paying to own the car. Obviously, it follows that, over a given period of time - say 36 months - it takes lower monthly payments to account for just the depreciation instead of accounting for the total cost of the car.

However, the “lower monthly payments” pitch that goes with all the lease advertisements is a bit deceptive … especially, if you anticipate yourself to be a long term car user [which is *generally* the case in the US].

To really understand the cost of leasing cars, one should look beyond just the monthly payments and calculate the total out of pocket cost over the entire term of the lease ~ and also extend some numbers to a longer time frame.

Towards that kind of understanding, let’s run a quick example (with some simplifying assumptions). A typical lease offer is quoted below (edited to retain only the relevant information):

2007 Accord 4-cylinder Sedan LX Automatic Transmission for $199.00 per month for 36 months with a $1,999.00 capitalized cost reduction available … $2,793.00 total due at lease signing (includes first month’s payment, security deposit, upfront acquisition fee and capitalized cost reduction; total net capitalized cost and base monthly payment does not include tax, license, title, registration, documentation fees, options, insurance and the like)

MSRP $21,520.00 less the capitalized cost reduction resulting in actual net capitalized cost $18,072.93. Taxes, license, title fees, options and insurance extra. Total monthly payments $7,164.00. Option to purchase at lease end $12,481.60.

In this example, the total out of pocket cost over the length of the lease is calculated as follows

• Total monthly payments = $7,164.00 (this is simply $199 multiplied by 36 months)

• Amount due at lease signing= $2,793.00 (down payment)

• Less refundable security deposit (approx) = $200.00 (included in the down payment)

• Less first month’s payment = $199.00 (included in the down payment)

• Total cost at the end of lease = $9,558

Now, you can compare this number with the anticipated depreciation (over the first 36 months) for this particular make/model:

[source: Edmunds.com]

From this image, you can see that the depreciation over the term of the lease (36 months) is = $3,716 + $2,178 + $1,917 = $7,881.

Apparently, with the lease payments, you are paying way more than just the depreciation. The extra cost over depreciation can be considered as the cost of the availing this leasing facility [analogous to the cost of interest in case of an auto loan].

If you are looking for a car for only 3 years, and have sufficient cash, you will be better off by paying for the car upfront and then selling it yourself after 3 years. That way you will (ideally) only lose the amount that goes with the depreciation (which is much less than the leasing costs).

Now, consider a much longer time span - say 12 years. In this period, you will have to avail four leases with each costing you approximately $9,558 (assuming that the make/model/price stays the same - this is a bad assumption, but it’s still on a conservative side) - this will lead to a total cost of $38,232 over 12 years just for the depreciation - and at the end of that many years, you still won’t be owning a car.

Instead, if you had purchased the same car by putting the same down payment (MSRP $21520, $2793 down, 6% APR for 60 months), you would have paid a total of $24,515 to own the car. And, that car would last you about 12 years (if you maintain it properly) without the need for a replacement - at that time it will also carry some residual value, even if it’s just a little more than peanuts. Obviously, leasing is not economical in the long term. And if you are like most Americans who will probably drive cars for more than half their lives, then you will need to look beyond leasing options (unless of course, you can afford to keep leasing).

Plus, you also need to consider that most lease offers come with additional headaches like mileage restrictions, penalty for getting out of lease earlier than the original lease span, disposition fees (these are fees to cover the cost that the leasing agency will incur in selling the vehicle after you return it), etc. Another (bigger) headache can be caused by the trouble you will face if you damage a leased vehicle. The leasing agency will want all the damaged parts to be replaced by OEM (original equipment manufacturer) parts and most insurance companies will provide compensation only for after-market parts - and you might have to shell the difference (OEM parts are, at times, more than twice as expensive as after-market parts).

In spite of all this, there are situations where you stand to gain from good lease offers.

In the above example, there is a clause that says:

Option to purchase at lease end $12,481.60

If you add this to the cost of lease ($9558), you end up with the total cost of the car as $22039.60. This is much less than what you would have paid for it if you had financed it over the 60 month loan ($24,515). Therefore, in cases where you are anticipating to save enough cash over the next couple of years to purchase the car at the end of the lease period, you might save some money by opting for the lease option.

So, give it some thought before you make up your mind in favor of (or against) a lease offer in future. Always compare the total cost of the leasing to the total cost of financing.

By the way, a reader “car girl” asked a question on the first post in this series about car buying tips:

Can you talk about leasing? I’m wondering about a 3 yr lease for my grad student son. Pluses and minuses?

Apart from the money aspects that I talked about, you should also consider the fact that leased cars require the users to follow the factory prescribed scheduled maintenance (to keep things in good shape). If that is not done properly, then you are looking at some penalties when the lease ends (plus there are penalties for excess mileage). Now, I mix and mingle with many fellow graduate students every day and I know how they use and maintain their cars. Based on that, personally, I won’t be very upbeat about letting them drive a leased car. So my advice to car girl is to go ahead with the leasing idea only if she thinks her son can take regular good care of the car.

Resources: The Federal Reserve Board has some excellent information for consumers interested in knowing more about leasing vehicles. The information appears as a part of a “comprehensive consumer guide” titled “Keys to Vehicle Leasing“. Below, I am highlighting two parts of this guide which every shopper, interested in leasing, must read:

• Shopping Tools - Lease Ads: all lease offers will use jargon like “capitalized cost reduction” and will throw a bunch of numbers at you. This page will give you details on how to understand such terms and costs mentioned in lease ads that are usually seen in print and digital media.

• Guide for Educators: there are some easy-to-understand presentations on leasing fundamentals on this page. Go ahead and download those for your reference in future.

Note: for the examples in the post, the differences in the costs (lease vs. buy) of tax, title, licenses, maintenance, insurance, and other small fees have been ignored in favor of simplification.

In response to part 3 of this guide (How to Inspect a Used Vehicle), a reader asked this question:

Is taking the car to a mechanic necessary when you’re buying a “Certified Used Vehicle?”

Let’s start this post by answering that question with a resounding YES. You must get a certified used (”pre-owned” is the preferred term) car inspected by an independent mechanic (after you have inspected it yourself). There is no reason to treat a certified pre-owned car any different than a normal used car.

An obvious question follows: Why is it necessary to have a *certified* car inspected; it comes with a factory warranty, doesn’t it?

We will try to answer that question as we go along.

First things first; what exactly are “certified pre-owned” vehicles?

These are used cars that satisfy all the conditions in a given manufacturer’s quality checklist. The checklist consists of various inspections (exterior, interior, engine, transmission, etc.) that need to be performed to deem a car *fit enough* to be sold as a certified vehicle [check out Honda's 150-point inspection list or Toyota's 160-point inspection list].

The vehicles that successfully pass such checklists are backed by the corresponding manufacturer’s warranty and then sold as “certified pre-owned”. So, the key words for any certified pre-owned car are: inspection and warranty. Sometimes, certified cars are also eligible for great financing rates (like new cars) so that’s an additional advantage.

Note that we are talking in terms of manufacturer-certified used vehicles here ~ which are only sold in branded dealerships that are associated with a particular manufacturer. For example, a Honda-certified car can only be sold in a Honda dealership. If you see *certified* cars being sold by a non-manufacturer-associated (non-branded) dealer, then those cars are essentially *bogus* in the sense that the certification is not manufacturer-backed (and hence the warranty won’t be backed by the manufacturer). Keep this in mind if you are looking for certified used vehicles.

Understanding the warranty that comes with certified pre-owned cars

There are two different types of limited warranty coverages offered on most certified pre-owned vehicles:

1. Non-powertrain equipment warranty (sometimes called as comprehensive warranty or bumper-to-bumper). This warranty is usually short-term: 3 months to 1 year with mileage restrictions from 3000 miles to about 12000 miles. Manufacturers cover different things under this warranty so make sure you check out the details. For example, Honda covers the following under it’s 12 month/12000 miles “non-powertrain warranty” :

- Steering
- Suspension
- Electrical
- Air Conditioning
- Heating and Cooling
- Fuel System
- Switches
- Audio Repairs (Honda audio systems only)
- Sensors

Toyota offers a 3 month/3000 miles “comprehensive warranty” and GM offers a 3 month/3000 miles “bumper-to-bumper” warranty on certified used vehicles. This warranty covers “any repair or replacement of components which fail under normal use due to a defect in materials or workmanship“. As far as I know, Ford does not offer such a separate coverage for Ford-certified vehicles. The only time that a used Ford will have a comprehensive warranty coverage is when it is within the original factory warranty period (3 year/36,000 miles).

2. Powertrain warranty coverage. This warranty usually covers the engine, drive system and transmission and generally, it’s a long-term warranty: 5 years to 10 years with a mileage restrictions from 60,000 miles to 100,000 miles. The most important thing to remember about this warranty is that the coverage starts from the car’s original date of sale, NOT from the time you buy the used vehicle.

It is important to understand the difference between the two types of warranties. Make sure you compare apples to apples when you compare warranty coverages. Don’t compare a 3 month comprehensive warranty to a 6 year powertrain warranty and then conclude that the 3 month deal is not as good as the 6 year warranty.

A good certification program should offer both warranties.

Look out for terms like “balance of original warranty” - this means the warranty coverage started from the date the car was first sold.

Check the resources at the bottom of this article for an extensive list of warranty details provided by different manufacturers on certified used cars.

So with all these goodies - warranty coverages and thorough inspections, why is there a question whether certified used cars make sense or not?

Well, here comes the juicy part. The question arises because of the following issues.

• Issues with inspection: it should be noted that inspections are done at the dealership level only, even if they are *supposedly* done according to manufacturer specifications. These cars are not like certain used electronic goods that are sent back to the factory to be “factory-refurbished”. Because of this dealer-level, there is a human element involved which makes the outcome of the certification process uncertain. It all depends on the honesty of the particular mechanic (or the vested interest of the dealership) who inspects your car.

Plus, it is not necessary that mechanics think alike and hence it is quite possible that one mechanic thinks that a car is good enough to be certified while the other doesn’t think it’s good enough. So, there is a very high chance that a given car, that has been an accident (which has not been reported in the CARFAX report), with some body work done on it, is given the go-ahead by a mechanic who thinks that it is worthy enough to be sold as certified. That’s why you must have certified cars inspected by an independent mechanic. In fact, independent inspection becomes even more crucial if you are not getting a comprehensive warranty coverage with the car.

Also, don’t get sold out on “160 point” (or whatever other number of points) inspection. Many of those points are trivial and it doesn’t require any amount of skill (or equipment) to have them checked.

• Issues with warranty: as explained above, coverages for certified used cars can be deceptive. For example, you could buy a certified 2003 Toyota with 84,000 miles on it. It will be advertised with a “7 year/100,000 miles” powertrain warranty. However, the warranty coverage started when the car was first sold as new. So, you should realize that although it has three more years of warranty, you have only 16,000 miles to go before the warranty expires (probably another year at max). So, if you are paying a very high premium for buying such a car, you are not getting a good deal in spite of the warranty. Also, keep in mind that most warranties (even the comprehensive ones) DO NOT cover normal wear and tear items (brake pads and shoes, belts, etc.) - so buying a certified car doesn’t mean you won’t have to worry about replacing all those items (think expensive maintenance) within a year of buying the car.

• Cost of certification: all that warranty and those inspections come at a premium, sometimes as high as $2000 (probably even more; it all depends on how much profit the dealer wants to make - there are no limitations on how high the dealer can set the price). At times, you can justify the extra premium with the cost of inspection, the replacement cost of certain wear and tear items, the cost of general servicing, etc., but generally the premium goes much beyond what can be normally attributed to the cost of reconditioning. Consumers should do their own research (just as described in these articles) and check out the fair price of a certified used vehicle before hitting a dealer’s lot (and of course you can haggle when you are there).

Sometimes, buying a certified car just doesn’t make any sense due to the cost factor. For example, here is how a 2006 Honda Civic (LX, 4 door, 15000 miles) evaluates according to Edmunds.com (check the price listed for the certified version at the very bottom of the image) - says $17,332!

Now, a 2007 brand new Civic with the same configuration comes to $17,577, a difference of just $245. There is no reason why you should buy a certified used vehicle in this case - just go for the new one. A non-certified Civic can be negotiated to almost near the private party value of $15,502, but the *certified* version won’t go much lower than $17,332.

Also, there is no reason why the certification premium should be so high for a one-year old vehicle ~ you can be pretty sure that the dealer didn’t have to do anything significant in reconditioning such a car (the original tires will be good enough and everything else should be in pretty much “as-new” condition). Plus, the original factory warranty of the car still has a long way to go before it expires and you certainly don’t need any additional warranty that comes after certification.

Another time when buying certified used vehicles don’t make much sense is when the vehicles are near the limits of their warranties. There is no wisdom in paying an extra couple of thousand dollars as premium for a certified car that’s run about 84,000 miles and whose powertrain warranty will expire within an year (after the next 16,000 miles). You could argue that you are getting a “comprehensive” warranty with the purchase, but if that’s just 3 month/3000 miles, then you are still paying way more than what that peace of mind is worth it.

So consider all these cost factors before you jump for a certified pre-owned car.

• Horror stories: Check this discussion on New York Times and see what readers had to say about their experiences with certified used vehicles. The photograph alongside is from another article in New York Times and shows a damaged Chevrolet Monte Carlo. Would you believe that parts of the damaged car in the photograph were used in a “GM certified vehicle”?

Here is an excerpt from the writeup that goes along with the image (here is a link to the article, but it requires subscription to NY Times):

After a mechanic put the car on a lift and saw the welds, Ms. Day learned that it included pieces from the front of one Monte Carlo and the rear of another, both seriously damaged in crashes.

This just goes to say that no matter how stringent the manufacturer’s certification requirements are, lemons can always be sold as certified vehicles.

Bottom line: “certified pre-owned” does not mean “no worry” and not all certified cars are worth the extra premium. Do your own research as you would have done with any other used car (follow these rough guidelines that I mentioned in part 2, part 3, and part 4 of this series) and then decide whether it’s worth the additional cost. Pay attention to the warranty when you are looking at old certified used cars and pay attention to the cost when you are looking at almost-new certified cars.

And, always remember - it is absolutely essential that you have a certified pre-owned vehicle thoroughly inspected by an experienced mechanic.

Resources:

• Manufacturers and Certified Cars: NY Times (read all the comments here)

• List of Manufacturers and the Features of their Certified-Preowned Warranty Programs: Cars.com

• What are Certified Used Programs: Cars.com

Continuing with our series on buying used cars, today let us discuss some basic tips on how to deal with car dealers. If you missed the earlier parts, here is what we have covered so far :

• Part 1: Classic Confusions

• Part 2: Understanding Vehicle History

• Part 3: How to Inspect a Used Car

Now, let us move on to the crucial phase in used car buying - how to deal with dealers. There is a lot to write, so I will present the information in the form of a list of tips, instead of a narrative. [In the following, I am using the terms 'salesman' and 'dealer' or 'dealership' in the same sense - they all desperately want to sell a car to you].

Tip 1 - Be very specific about your requirements: For the first few dealers we started our conversation with some lame statement like this: “We are looking for a used car - a Honda Civic or a Toyota Corolla within the price range of $9,000 to $12,000“. Although, some people might say that it’s pretty specific, it still has a lot of unproductive potential.

Here is why:

We were *prepared* with a few prices for specific cars. For example, we carried documents about the True Market Value (representing what others are paying for a similar vehicle around a given zip code), MSRP (usually the dealer sticker price), and invoice price (what the dealer pays for the car) as obtained from Edmunds.com. However, we carried these documents only for Honda Civic and Toyota Corolla models for the years 2003 and 2004 - which, by default, fell within our price range. However, when we mentioned the price range of $9,000 to $12,000, without being any more specific, the salesmen started throwing a lot of options (various model years and mileages) at us. That created a lot of confusion because we didn’t know how to evaluate the worth of each car based on it’s age and year on the spot. Basically, the generic *preparation* (deciding just the budget and the make/model) was pretty much useless and turned out to be a big waste of time.

That’s why you need to be very specific with your car requirements before you start talking to car salesmen. With “specific”, I mean specific to the exact car you want to see, not just the model, model year, and mileage. Find out what the dealer is offering through some online listings (Autotrader.com or the dealer’s own website), choose which of those vehicles fit your criteria. Then (after you verify a clean CARFAX history for those vehicles), call up the dealer and ask if those particular vehicles are still on the lot. At this point, don’t complicate matters by mentioning any price expectations. Just keep it simple, go to the dealer’s lot ONLY if the vehicles you want to check out are still available for sale. A few minutes on the internet and the phone will save you a lot of time and confusion when you physically visit the dealership.

Tip 2 - For each car you choose, decide your ideal price and margin before you head out: After you have confirmed that the car is still available for sale, go online and look up it’s True Market Value on Edmunds.com. Don’t just stop at the standard values ~ go ahead and appraise your car with respect to it’s with color, mileage, condition, etc.

Follow these steps to do it.

• Suppose this is the car you found through Autotrader.com:

• Next, go to Edmunds.com –> Click on “Used Cars” in the top menu –> Then click on “Research Prices and Specs” –> Then you will be asked to select the make/year/model - in that order. Once you do that, you will get a screen that will show these prices:

• Don’t stop here. The True Market Value (or TMV as Edmunds.com calls it) as seen in the above image is just the *typical* value based on normal-use assumptions. You need to click on the “Customized Appraisal” button to get the value for the specific vehicle that you are looking at. Once you click on the “Customized Appraisal” button, you will be asked to enter information like color, mileage, optional features (automatic transmission, power options, etc). After you do that, you will get a pricing report that looks like this:

• Now, check the dealer retail price in the above image and compare it with dealer’s listed price. In this particular case (surprisingly), the actual price offered by the dealer is slightly lower than what Edmunds.com predicts. However, you can see that the private party price is much lower than what the dealer’s list price. Your ideal price for any used vehicle should be near the private party value (may be even slightly lower). For this example, the ideal price is probably around $9,800. Keep a reasonable margin above this in such a way that it still makes this car worth it. In this case, say a margin of $500. So you should start your negotiation from $9800 onwards, and try to target about $10,000 as the final price. However, in the worst case, if the dealer doesn’t agree with your price, and gives you a final quote of $10,250 ~ that would still be in your margin and will turn out to be a good deal for you.

Walk out if the dealer is not ready to negotiate at all, you will find others who will gladly do it.

Tip 3 - Always wait for the salesman to make an offer first: Even if you are very confident about the prices, don’t blurt out your expectations before the salesman makes an offer. At times, you might lose a golden bargain by doing something like this. We, as consumers, do not know anything about the price wars between two salesmen in a given dealership or between two dealerships, etc. It is quite possible that the salesman who is attending you is trying to low-ball his competitor and hence may be ready to offer you an ultimate bargain ~ a chance you will blow away by opening your mouth first.

Again, consider the example in Tip #4; here don’t tell the salesman that you are ready to buy the car if he sells it for less than $10,300. Once you say that you are ready to pay $10,300 for that car, the salesman will start his pitch with something like $10,900. That puts him on top of the situation. Instead, you should force the salesman to offer his best quote first and then you should lead the negotiation by low-balling him quite a bit to start with. This will invariably end up in a better deal for you.

Tip 4 - Don’t even mention the words “monthly payments”: If you do that the salesman is going to catch you on this and raise the stakes by a few dollars every month. The pitch will be something like this: “Why are you buying this old Honda Civic when you can buy this new one for just $50 more per month .. in fact, if you put $50 more, you could upgrade you a bigger and safer Accord“. Believe me, they are really good at this game - so the best thing to do is avoid playing this game altogether. In fact your monthly payment should have been fixed in your mind when you chose your budget and type of car in the first step (see tip #1) and you should let anyone convince you otherwise.

Tip 5 - *Appear* knowledgeable and well-informed: This is a tricky one and I am going to have a hard time trying to explain this to you. If you show your ignorance, you WILL be taken for a ride ~ that’s guaranteed.

For example, we played this dirty trick on one of the dealers when we were tired (and angry) at how things were proceeding on our first day of used car hunting. The salesman was trying to sell us a 2003 Honda Civic (2 door) with 75K miles on it, but was reluctant to mention the price (even after we insisted a lot). Later, I casually lied to him that we test drove a 2002 model with 78K miles at a nearby dealership and it carried a price tag of $12,500. On hearing this, he excused himself for a moment and presently appeared with a $12,989 quote! (actual price should have been around $ 10,000). He was probably just waiting for judge our level of ignorance with the prices, and the moment he realized that someone else took us for a ride, he was ready rip us off.

Towards this tip, if you don’t know the prices well enough, it’s better to keep your mouth shut and let it be the salesman’s burden to judge your level of ignorance. Don’t make it easy for the salesman by saying something stupid.

Also, it helps to carry a file with some print-outs in it - something that shows that you are a *serious* customer and not some window-shopper who is just trying to entertain himself on a lazy day by wasting everybody’s time.

Tip 6 - Be skeptical, ask questions: Sometimes, it takes a few right questions to figure out if your salesman is hiding something from you. Here is an example.

This incident took place at a Honda dealership (our first stop - when we were still learning the tricks of the trade), where we went to test drive an Accord (2002, 69K miles). We drove the car and it felt nice (at first), and we had this feeling like the deal would work. However, things change after the following conversation, which happened right after the test drive:

Me: The car seems to work fine. I just have one more question - since you are a Honda dealership, why is this Honda Accord not being sold as *certified used*?

Salesman: Oh, it’s good enough to be certified, but Honda doesn’t allow certification of cars with more than 60K miles on them or more than 5 years old. Plus, you know this car is a 2002 model, so it was on the road in 2001 and that’s more than 5 years.

I later found out that Honda allows certification of cars with less than 80K miles which are less than 6 “model years” old. Apparently, that Accord was eligible for being sold as *certified* and yet it wasn’t. So this dude was lying to us.

When I brought this to the his notice, he gave me some crap about warranty transferability and such - all of which was invalid with respect to that particular car - and never really addressed the my question: “why is this car not being sold as a certified car“. Although, we never got an answer, the incident made us suspicious enough to drive us away from the deal.

The point in case, is that all salesmen are not epitomes of honesty. A car salesman’s job is to sell cars, and he will do all that is necessary to help his job. Sometimes, honesty doesn’t work in their best interest. Mostly, they may not lie blatantly to your face (although a few did that to us), but at times, they tend to withhold crucial information, which I consider to be dishonest. For example, if something is wrong with the car, they are not going to be open about it - unless you specifically ask them about that particular problem. So, be skeptical about the information (or the lack of it) that you get from a salesman.

Tip 7 - Be polite, but be firm: Dealers are people like you and me who are working hard to make a living. So, some politeness is in order. However, that does not mean you should be afraid of saying “NO” to nonsense. A friend of mine suggested that I practice the polite delivery of these statements before I speak to a salesman:

-”Please don’t waste our time by making multiple trips to your manager for negotiations. Let us settle it between ourselves first and then you can take the final number back to him“. [incredibly effective]

-”Please don’t waste our time by showing us cars that we didn’t ask for, we are not interested in looking for anything else than what is there in our list“.

-”I don’t think this is going to work for either of us. Thank you for your time, give us a call if you decide to offer us a better deal“. [use this when you get bored negotiating and just want to get out of that place]

These statements are mighty time savers for inexperienced used car shoppers.

Tip 8 - Do not hand over your driver’s license and phone number without any reason: At least 4 car salesmen, in different dealerships, asked for my driver’s license and phone number without even showing me a single car. If you face such a salesman, just ask him this: WHY? I bet he wouldn’t have a good answer. The only valid reason why they may need your driver’s license is if you asked for a test-drive. Other than that, they may want it to note down your address so that they can sell it to someone junk-mail sender for a fee. So it’s a good idea to keep your driver’s license to yourselves until you want to test drive a car. Same with the phone number; don’t give your phone number if you don’t want them to contact you later.

Tip 9 - Always ask for the “drive-out price”: This will make life much easier for you, because this is the exact amount (price after taxes, title, fees, etc.) that you will be writing the check for (or getting financed for).

At times, it’s better to negotiate with the drive-out price instead of the actual sale price. This is because people usually have a tendency to negotiate towards some lower *round* figure. For example, if the dealer list price is $11,785, it is very likely that it can be negotiated down to $11,500 (you will save $285). However, if the drive-out price in this case comes out to say $12,980, it is very likely that it can be negotiated down to $12,500 (you will save $480).

Tip 10 - Just say no to additional options: Honestly, with a used car, there is nothing that a dealer can offer that you cannot buy later. Extended warranties are generally offered by third-party warranty companies (and the dealer probably gets a commission by offering them to you), and different warranties have different coverages - just say no to them when they are offered by the dealer. Later do you own research to see if you really need such a warranty and if you do, take your own sweet time in getting something that suits your needs and wallet. If you follow the instructions in part #3 of this series (how to inspect a used car) properly, there won’t be any pressing need to buy an extended warranty coverage before you leave the dealer’s lot.

Tip 11 - Squeeze the most out of our salesman after you finalize the deal: If everything goes smoothly and you finalize your deal, the salesman will be as happy (to have sold a car) as you are (to have bought one). Strike when the iron is hot. Ask for free interior detailing, full tank of gas, free spare keys (for certain cars, this electronic transponder key stuff is really expensive), scratch and door-dings removal, new floor mats, etc. These are pretty minor things, but they can easily add up to more than a couple of hundred dollars or more. Your “happy” salesman will be more agreeable to these things immediately after you have finalized your deal.

Tip 12 - Delay mentioning your trade-in: I am picking this tip from an interesting article on the subject by my friend Jeremy @ Generation X Finance. Please take out some time to read his entire article.

If you are planning on trading in your old car to help with the purchase of this new vehicle make sure you don’t let the cat out of the bag until the end. The salesperson will certainly ask if you will be trading in but you don’t have to tell them yes or no, maybe you are considering it. Either way, if they know you will be trading in they will use this to their advantage in the negotiation which will undoubtedly become more confusing and potentially cost you some money in the process.

Also, according to the “Confessions of a Car Salesman“:

Buyers are so eager to get out of their old car and into a new one, they overlook the true value of the trade-in. The dealership is well aware of this weakness and exploits it.

So don’t be too eager to mention your trade early on or they will be on to you.

Tip 13 - Don’t be stupid: Ah ha … here comes the cliche. Know a scam when you see one. For example, many people must be knowing that specific dealerships sell only specific vehicles as “certified pre-owned” - Honda dealerships can sell Honda certified pre-owned vehicles, Toyota dealerships can sell Toyota certified vehicles, and so on. I haven’t heard (even if there are), of any dealerships that are not associated with a manufacturer, selling a certified pre-owned car from that manufacturer. For example, you will never find a Ford dealership selling a certified pre-owned Honda Civic. If someone is doing that, then something is obviously wrong with the deal (most likely the car won’t have Honda’s factory warranty on it). In the same breath, if a dealership is not associated with any manufacturer, then it cannot sell *certified* pre-owned vehicles. Stay away from such places.

Also, if cars from a dealership have been listed in your local classifieds and are being sold for a bargain as *private* party deals, then there is something wrong going on (the dealership probably doesn’t want to be associated with those cars). Again, stay away from such offers.

Tip 14 - If you want to avoid haggling, go visit CarMax: It is one self-declared, no-haggle, car *dealership*. Moreover, the salesmen are paid a flat commission per every car sold, so there is really no incentive for the sales staff to inflate prices (and hence the profits) on a given car. Just search for the car you want, and then drop by to their car lot to pick it up - it’s that simple. On the flip side, the prices are relatively high in spite of the flat commission. In some cases, the cars here are more expensive than the dealer list prices on certified pre-owned vehicles backed with manufacturer warranty. CarMax offers a warranty for every used car they sell, but it is a lame 30 day limited warranty [compare that to certified pre-owned cars that could be covered with up to a year of bumper-to-bumper; plus, a 100,000 mile powertrain warranty]

Bonus Tip 15 - For new cars, try the “Internet Sales” department first: Now-a-days this option is becoming really popular. It bypasses all the psychological pressure tactics that salesmen play when they physically meet you and it is definitely good for your wallet. Here is how you can make this more effective.

• First, choose the new car make/model/year you want to buy.
• Then go on Edmunds.com and check out the invoice price and the True Market Value of the car (usually, this will include any available incentives like cash back, etc). It’s always a good idea to check the manufacturer’s website to see if there are additional discounts.
• Apply for an auto loan through your credit union or a local bank (or wherever you are getting the best rates). For many new cars, there are financing options available through the dealer at ridiculously low rates (0%~2% APR), but they are usually available to people with FICO score around 750 (or above) and/or have a previous auto loan history.
• Once your loan is approved, send an email to the internet sales departments of all the relevant dealers near you (almost all dealerships have internet departments).
• In the first iteration, ask for their “best quotes” on the car you are looking for. Remember to also ask them to estimate the final “drive-out” price - this is important because dealers sometimes have some stupid documentation fees (or something similar) and you want to take that into account before comparing different quotes. Don’t give out your price yet.
• Once they come back with their quotes, compare it with Edmund’s True Market Value, start your negotiation from the invoice price (minus incentives), and aim towards a final price that falls between the invoice price and the True Market Value.
• The way I see it, True Market Value represents a “ripoff point“. Anything above that price is a ripoff. Anything below is reasonable. Basically, if you get your car within the price set by True Market Value, then it means that you paid less than what other people around you are paying on an average. Sometimes, if there are incentives available, it is quite possible that you can buy your car for less than the invoice price, so make sure you ask/know about all the incentives before you start negotiating.
• Once you are happy with the final drive-out price. Then send the dealer an email saying that you have an approved financing option at X.YY% APR (you don’t need to mention your real APR here - if you have been approved at 5.5%, feel free to tell the dealer that you got 5%). Ask what’s the best they can offer you. It is quite likely that the dealer may try to beat your bank’s offer. This is not guaranteed, but it’s worth a shot. By the way, it is better if you not mention financing anywhere before this final point in your negotiation.
• After this is done, all that remains is some final paperwork and picking up your car from the dealership.

This online-only method is fairly easy when you are looking for new cars. However, for used cars, it becomes a bit complicated -you cannot really negotiate a price through emails if you don’t know the condition of the car.

OK, so that’s all that comes to my mind for now. It was enough bashing for the salesmen in there. Although, some of them are pretty obnoxious at times, it looks like it’s not always their fault. Again, here is an excerpt from the “Confessions of a Car Salesman”

What the customer didn’t realize was that the poor car salesman or woman was not really the enemy. The real enemy was the manager sitting in the sales tower cracking the whip. Suppose for a moment a customer told us they were “only looking,” and we said, “fine, take your time,” and went back into the sales tower. Now we find ourselves looking up into the steely eyes of the sales manager.

“That’s your customer out there,” the manager would say.

“But they said they’re only looking,” I would answer.

“Only looking? You’re going to take that for an answer?” Foam was beginning to form at the corners of the sales manager’s mouth. “What the hell kind of salesman are you? Of course they’re looking! They’re all only looking until they buy. You want them to go across the street and buy a car over there? Because they have real salesmen over there. Now go back out there and sell those people a car. And don’t let them leave until they buy or until you turn them over to your closer.”

So that’s why the car salespeople stick like glue to customers. Their fear of their managers is greater than their fear of offending the customers.

So, finally, even with all their faults and undesirable characteristics, it is important to remember that car salesmen are just human beings like us - very much susceptible to the lure of extra money. Instead of snapping back at them in anger (for whatever reason), try to gracefully decline their offers (express your disappointments if you want) and walk away in hopes of finding a better salesman in the next dealership.

Feel free to share any other obvious or subtle tips that you think might help.

Today, let us assume that you are through with yesterday’s classic confusions and have come to a decision regarding the amount of money you can afford and the type of car you want. The next thing to do is to start looking for cars, and pull up the vehicle history records for the ones you like.

Here are some websites where you can start your used car search:

• AutoTrader.com (gives you a list of used vehicles at all the dealer locations around a given zip code)
• Cars.com (listings from dealers as well as from private sellers)
• Ebay Motors
• Your local Craigslist
• Your local newspaper classifieds
• If you are looking for a *certified used vehicle*, most manufacturers have some kind of a national database of such vehicles (for example, Honda and Toyota certified used databases). Be sure to check these out - sometimes they list cars that do not appear on any of the other websites mentioned above.

Once you have successfully searched for the car you want, it’s time to pull up it’s history to check if it has been through any “bad times“. Currently, in US, there are two websites that offer vehicle history reports for consumers:

1. CARFAX ($24.99 for a single report or $29.99 for unlimited reports over a period of 30 days)
2. Autocheck (provided by Experian Automotive - a part of Experian - the guys who compile your credit history; $19.99 for single report or $24.99 over a 60 day period)

Information from these two reports is similar, but not exactly same. For example, for the 2005 Toyota Corolla we bought, CARFAX shows 4 records listing various events whereas Autocheck shows 6 records and some additional data. Although essentially the same information was present in both the reports, it was obvious (from the details) that the reports were pulled up from different sources.

For the purpose of this post, let’s discuss the more popular CARFAX vehicle history report. Most arguments could be easily extended to the Autocheck vehicle history reports also.

What Does A CARFAX Report Tell You

According to it’s website, a vehicle history report can carry information on the following:

• Title information, including salvaged or junked titles
• Flood damage history
• Total loss accident history
• Odometer readings
• Lemon history
• State emissions inspection results
• Number of owners
• Service records
• Lien activity, and/or
• Vehicle use (taxi, rental, lease, etc.)

If there are discrepancies in the things listed above, there are clearly marked in every vehicle history record so you don’t really have to do any “guess work”. Click here to see an example vehicle history report of a damaged vehicle. Problem areas are marked in red and bold (in a movie-style user-friendliness).

Since vehicle records are arranged by date and the odometer readings are chronologically displayed, odometer discrepancies are easy to figure out. However, issues with title information, lemon history, flood damage will only appear if someone has reported these issues to CARFAX (read the section titled “A Clean CARFAX Report Does Not Mean A Clean Vehicle” below). The report also tells how many people owned the car after it hit the road for the first time. Too many owners (2+) probably means inconsistent handling history - something which you should avoid. For the same reason, you should avoid vehicles marked as rental. Leased vehicles are fine - as long as they don’t show too many miles/year. According to Cars.com:

People who lease are charged for all necessary repairs. This policy encourages people who lease vehicles to take care of them.

By the way, lack of “service records” on a CARFAX report does not necessarily mean that the vehicle was not maintained properly. There is always a possibility that the servicing was done by a shop that does not report data to CARFAX.

At times you can even read more into a “clean” CARFAX report. Here is an excerpt from one such clean report for a certified used Honda Civic that we actually test drove last week:

Hmm .. “vehicle reported stolen” .. that too in Louisiana (think abandoned vehicles in swamps). That sort of breaks your trust. There was no way we could have bought that vehicle in spite of it’s clean CARFAX record.

We spent about an hour examining the vehicle ourselves, and from things we could observe, there was some evidence of water damage to the interiors (we compared the carpet and the upholstery to other Honda Civics and it was obvious that this one had some problems). We brought this to the notice of the salesperson who was trying to give us a *good* deal on that particular car - and he just shrugged it off with “Don’t worry, it’s a certified vehicle“. We waved him goodbye within a few minutes after that.

A Clean CARFAX Report Does Not Mean A Clean Vehicle

I have met plenty of students in my town who have bought cars after checking up a CARFAX report - which appeared to be clean. They did not opt for a detailed mechanical inspection because of the *clean* vehicle history. This is not a very wise thing to do for the following reasons.

Somewhere on it’s website, CARFAX says this:

CARFAX compiles the CARFAX Vehicle History Report from information it receives from thousands of sources. As extensive as our database is there are still accidents that are not reported to CARFAX.

You should keep in mind that all accidents are not reported to a DMV (or other sources from which CARFAX gets it’s data). Accidents that are reported usually follow the *normal* course of actions, which includes: filing a police report and/or reporting it to an insurance company for the purpose of claims and/or having the vehicle repaired at a service center that reports data to CARFAX. However, a number of times, this normal course of actions is not followed and as a result the information does not appear on any official records and hence does not appear on the CARFAX report.

Similarly, not all repairs are reported to CARFAX (generally happens when repairs are done at an arbitrary, cheap body shop instead of a dealer-associated body shop) and hence do not appear on the CARFAX report.

A classic situation that we see often in our university town is a good example of how certain events/accidents never make it to the CARFAX report. Most students usually look for lower insurance premiums and end up with policies with high deductibles. When such students get into accidents, they usually try to settle the matter without involving the police (so there is no police report). Then, they take their cars to some cheap repair shops in town, pay for the costs of repairs from their own pockets rather use their insurance (this happens due to high deductibles and also because they don’t want their premiums to rise due to insurance claims - as it is, premiums are very high for unmarried males under age 25).

In such situations, the damaged cars are back on the road within a week and there is absolutely no record of the accidents at all. CARFAX reports for such cars are absolutely clean, although the cars may have suffered cumulative damages worth thousands of dollars over the years.

The Meaning of CARFAX Buyback Warranty

CARFAX offers a buyback warranty on certain eligible vehicles. Here are a couple of important clauses in it’s warranty coverage.

• Upon finding no severe problems (major accidents, fire, flood damage, odometer problems or lemon history) were reported by a DMV, the vehicle automatically qualifies for the Buyback Guarantee.
• If you later discover that a severe problem was reported by a DMV and not included in the Vehicle History Report, CARFAX will buy the vehicle back.

Don’t let this warranty clause fool you into blindly buying a vehicle that appears clean on CARFAX. The keywords in this warranty clause are again “… reported by DMV …”. The warranty simply gives you an assurance that all the information available through government agencies has been included in the CARFAX report. If you later find out that your driver-side door was replaced after a side-impact accident, which was never officially reported anywhere, that warranty is of no use to you.

The only time you can avail the buyback warranty is when an accident has been reported by a DMV and, in spite of that accident record, the CARFAX report for that particular car comes out to be clean (accident-free).

What Should You Do Before Buying A Used Vehicle

Even if the CARFAX report is clean, always make sure you get your vehicle checked thoroughly by an independent mechanic. If the dealer/seller will not allow you to take the vehicle to your mechanic - do your own inspection (if you are confident enough) or just let the deal pass, you will certainly find others who will allow you to do so.

In fact if you read the information on CARFAX website carefully, you will notice that they acknowledge this:

While we’ll never know everything about a particular car, a CARFAX Vehicle History Report combined with a test drive and an inspection by a qualified mechanic is a consumer’s best protection when buying a used car.

Now, thorough vehicle checkups don’t come cheap (usually between $45 ~ $90 per vehicle depending on where you have the vehicle checked), so make sure you get only *worthwhile* vehicles checked. I will define worthwhile vehicles as the ones which satisfy the following three conditions:

• It should have a clean CARFAX record.
• It should pass a cursory visual inspection that you should conduct yourself.
• It should pass a “test drive” run.

If there are problems with any one of these conditions, don’t waste your time and money in having that car inspected.

Tomorrow, we will discuss points #2 and #3 in detail - that is, how you can first visually inspect a vehicle with very minimal tools and how to test drive a vehicle before taking it for an expensive checkup.

Before you go, let me summarize this lengthy post in a few words - a vehicle history record and a thorough checkup by a good mechanic are complementary measures that you must implement before buying a used car; don’t skip one in favor of other.

As an aside, for Canadian citizens, CarProof.com runs a vehicle history report service in Canada, analogous to CARFAX in US.

I will be talking quite a bit about car buying in the following days. The posts will be generally derived from our experience during the past several days in this matter. I am hoping to cover all the material in my head in about 5 parts (probably even less). Although, this series of posts won’t be a *comprehensive guide* by any yardstick, I am hoping that it will be a handy reference for people who are in the market for used cars. All inputs and/or tips will be appreciated.

Let’s start the series by visiting a few common dilemmas faced by people who are looking for used cars.

Used Cars vs. New Cars

If your budget is between $4000 and $12000, you won’t really have any confusion here; there is only one option for you - used cars. Confusion starts taking shape when your budget goes beyond $12000. It usually strikes your heart when your good friend pops a question to this effect “Instead of spending $12500 for a used intermediate sized sedan, why don’t you spend a little bit more and buy a brand new compact sedan?“. For example, instead of buying a used 2002 Toyota Camry (50K miles) for $12500, why not buy a brand new 2007 Toyota Yaris (equally reliable) for about $14500 drive-out price? The argument makes sense IF - you really don’t *need* a larger car, AND if you can afford the extra couple of thousand dollars.

To avoid this confusion, first decide your budget before you start looking for a car - and stick to it. Then, decide what type of car (small, large, loaded, base version, etc) you *need*. Believe me, in the long run, it will be easier to adjust to a smaller, slightly older, less equipped car than it will be to adjust to a larger payment. Also, be cruel when it comes to filtering your *needs*. I will laugh at you if you tell me you need leather trim, a 6-CD changer, and dual-zone climate control. Once you decide these two parameters (budget and needs), the rest of the things will just fall into place automatically.

By the way, if a good brand new car is within your budget, in my opinion, you should go ahead and buy it - it will be worth the additional costs (high depreciation in the initial years). You just can’t put a value for the peace of mind (due to the complete warranty coverage and due to the knowledge that your car wasn’t abused by some jackrabbit idiot for the last 20,000 miles). Just make sure you take the true cost of ownership of the car into consideration before you jump on just the sticker price.

Larger Older Cars vs. Smaller Newer Cars

This confusion occurs after you have fixed your budget and are looking for different cars within that budget.

We faced this situation last week when we had a choice of two cars that came to almost the same drive-out price. The first car was a 2002 Honda Accord EX (V6, leather, and totally loaded) with 69,000 miles, and the second one was a 2005 Toyota Corolla CE (base model with very few extras - didn’t even have power windows) with 21,000 miles on it. We loved the Accord for the power and all the bells and whistles, but there was absolutely no doubt that the Corolla had a lot more reliable life left on it (with proper care) than the Accord. Plus, the Corolla held enough room for our needs, and had enough power to cruise the highways even with full occupancy - so we finally went for the Corolla.

This confusion can get very difficult sort out, especially if you get blinded by the “goodies” from the larger (more loaded) car. The key here is to avoid making an impulsive decision and revisit your needs. Do you really need the V6 engine? and 815 cup holders? and leather upholstery? If you feel even the slightest hesitation in deciding between the cars, the best thing to do is - DON’T decide. Just go home and sleep over it; you will certainly think more clearly on the following day [btw, that's exactly what we did in our case].

If you noticed, I am comparing between a Honda and a Toyota in the example above; I am sure I would have chosen the Accord if it was a choice between a 2002 Honda Accord and a 2005 Ford Taurus. Keep reliability ratings in mind when you are making your way out of such confusions.

Private Party vs. Dealerships

Generally, cars offered through dealerships are a couple of thousand dollars more expensive than those offered by private parties (individuals). However, there are some positive aspects of dealing with a car dealer, namely, the freedom to spend as much time as you want in inspecting a vehicle, getting free CARFAX reports (most dealers will pull one up for you if you request), having a variety of cars at a single location, and some accountability.

That “accountability” part might be surprising for some people, but I do assign some weight to it. A car dealership can be easily sued if they fail to disclose structural damages to a vehicle; they have a lot of reputation to lose in such cases (for example, here are some cases in Virginia) - even in the case of “as-is” sales. *Generally*, established car dealerships, representing reputed car manufacturers, won’t deliberately try to sucker you into buying a lemon [you can imagine the kind of attention a dealer will generate if he sells me a damaged Toyota vehicle that still has factory warranty on it - without disclosing the damage]. Plus, dealerships also offer the the “certified used” programs through which you can buy a vehicle with factory warranty (albeit at a higher price). Of course, exceptions are always there (there are plenty of rogue dealers - and bogus *certified* programs), so I would not extend this as a blanket explanation for all dealerships.

On the other hand, almost all private party sales are considered as “as-is” and generally there will not be any written documentation involved. There is no incentive of “maintaining reputation” as in the case of an established dealer. Plus, there is no “higher authority” (for example a manager, or BBB, etc.) to lodge a complaint. Your only recourse in case a private party deal goes bad would be a small claims court - that too if you have ALL the proper documentation for your deal.

Automatic Transmission vs. Manual Transmission

Technically, there is no *confusion* here - you either can drive a manual shift or you can’t. Generally, manual transmission cars are available for cheap - and are better maintained (according to what I have observed). Manual versions don’t fly off the car lots as fast as the automatic versions and dealers are more *agreeable* to negotiations on these cars - the difference could easily be in the range of couple of thousand dollars for popular cars.

We had an extremely good deal on a 2005 Toyota Matrix with just 14K miles on it, but we had to give it up because we both are not very comfortable with manual transmission (although we can use it).

Go manual if you can and save some money.

However, keep in mind that you will have some trouble selling a manual transmission in future as increasing number of people get used to automatic transmissions. The money you saved while buying the vehicle could be easily lost while selling it.

That’s all I can think of right now as far as confusions are concerned. Tomorrow we will discuss a few things about vehicle history information and how you can make the most of it. So stay tuned.

Since our Nissan broke down on a freeway a few days ago, we have been trying to zero in on some good deals on used Honda or Toyota vehicles. We located a few feasible deals far away from our town and decided to rent a car for a couple of days in order to pursue them (that is - visit some dealerships, test drive, haggle, try to aggravate an irritating salesperson, etc.).

Renting was not our first option; we first borrowed a *very* old car from a good friend - who forgot to mention that the registration sticker had expired. We didn’t notice it either - until a cop pulled us over - for exactly that reason! That effectively ended the productive phase of the old car and forced us into looking for rentals.

Now, let me whine about how Enterprise conducts it’s car renting (rather the lack of it) business. Since the last couple of days we have twice tried to rent an economy car from Enterprise. Each time, I booked the car online and scheduled the pick-up at about 11:00 am on the following day. This is what happened on both occasions when it was about time to pick up the car:

Me (called to ask for a ride): We need a ride to your location to pick up our rental car. Would you please arrange for someone to pick us up?

Desk Clerk (after checking up our confirmation number): Sir, we don’t have any economy cars available at the moment. In fact, I am not sure if we will have any available for the rest of the day.

Me: Forget economy, is there any other car we can get today?

Desk Clerk: No sir, we don’t have any cars available.

Me: Is it possible to get one later in the day.. say about 3:00 pm? It doesn’t have to be an economy car.

Desk Clerk: I am not sure.

We called at least FIVE other Enterprise locations and got a similar story.

What is the matter with these guys? Why does a car renting company doesn’t have a single car to rent at ANY of it’s locations at ANY time of the day? If they don’t have cars available (or have a backlog), why the heck don’t they say that on their website - or at least give a courtesy call to inform about the lack of availability?

Is this *normal* for Enterprise or am I just going through a bad car phase here?

On a related note, I will have some interesting stories (rants) about car dealers. From the experience so far, let me just say that ALL car dealers work on the same profound assumption - most people are born suckers.

In the latest issue of TIME magazine, the “Inbox” features a thought by one Sheldon Baer:

Cars have been made into objects of desire, and most of us are no longer thoughtful buyers but simply consumers. The self-inflicted pain goes way beyond the price of gas.

Now, if everyone were that thoughtful.

You could easily replace “Cars” with laptops, mp3 players, cell phones, Wiis, and homes - and yes the self-inflicted pain would again go beyond the price of gas.

*Genuine* users are excused. However, of late, in this context, the word “genuine” appears to be a bit diluted - earlier it used to differentiate between wants and needs when it came to buying things.