Cars - 6 pitfalls to watch out for and why they are the Black hole for all finances everywhere

December 28, 2007

This could be your finances if you don’t read our simple tips.

Hello valued readers, I hope to make clear to you what a lot of people don’t seem to understand before they purchase a vehichle but becomes crystal clear after a few months. Cars are not an investment, they are a liability. They never make you money unless you are selling them and then only if you are very savvy and usually cheating the naive. So below I am providing a list of the things you need to be aware of when purchasing a car from a financial point of view.

• Never Buy a new car - The second you drive that car off the lot then it will drop in value relative to the vehichle bought but even one of the cheapest cars available a Fiat Ciecento, will cost about 8000Eur new and this will lose 2000 Eur from the second it leaves the lot. Usually about 20-25% of value is lost when car has left lot first time.
• Buying a relatively new car - When you are buying a relatively new car 1-2 years old, always wait until the beginning of Autumn, most car dealers are getting anxious around this time and you will see some great bargains as their forecourts overflow with all the cars that are arriving for the next year. Always check online before you buy to make sure you are getting a reasonable deal.
• Buying an old car - You need to be aware that almost all vehichles that are 5 years or over that are on a forecourt have their Odometer, the miles the car has travelled thing clocked. Which means that the dealer has reduced the ammount of miles done to sell the car. This is not always an issue as most cars these days can easily do up to 150,000mls. without any great problem. Mainly be aware of the obvious ones these are the cars that are being clocked to get be sold to the innocent. For example, a car from the year 2000, with 21,000 miles on it. On average every year most people will do a minimum of 11,000 miles. Unless, you know through friends that it was SuperGran’s car and she only used it to go to the shops, then stay well away. If you do know of a car like this then purchase it fast.
• Simple things to be aware of and check before driving away in car -

1. Tires - Old tires means you need to add another 200Eur to price of car for 4 new ones. This is the oldest trick in the book. New tires on the car when you look at it, then old tires on the car when you collect. Most people are so happy to have their new car that they do not see this.
2. Vehichle Roadworthiness - In Ireland and the Uk definitely, you need to make sure that your car has this test passed. At least a year should be left on this disk to ensure you are getting your money’s worth on any car below 3,000 Eur anything above this should be relative to the ammount paid. A new car does not even have a place for a disc as they do not have to be tested for a few years. Just because a car has this test passed does not mean that it is a good car. These tests are incredibly easy to pass. Especially if you are a car dealer then they probably know the mechanic doing the test.
3. Electrics - The newer the car you have the more electrics it comes with this means more potential for bone crushing debt. Take the car for a drive, if the windows fog up quickly then the cars seals are damaged and there is a high potential for electrical issues due to dampness. This will cost you a fortune in repairs from car stereos to new bulbs as power surges burn them out. This is why you should buy in the Autumn also, plenty of rain to test these things out.
4. Standard wear and tear - All cars have things that wear out and need to be changed. Tires as stated above. Timing belt and head gasket. You don’t need to understand what these things do, you do need to undertand that at 50-60000 miles most every car will have to have these replaced. Some models will go to 80000miles without having a problem others will not. You will notice the temperature begin to rise in the car and this will be a sign that you need to get these things done. (Temperature rising is the head gasket or a damaged radiator. Make sure all pipes are attatched to the big grill in the front of the engine) You will need to get the timing belt changed before it actually fails otherwise you will end up with a piston sitting in your lap and no engine. These cost from 700Eur for a small car to 2000Eur for a big car. Also, the clutch. Clutches should be treated with respect and doing burnouts and squeel away starts from the lights is a sure way to end up broke and possibly in jail. Clutches will cost 300Eur and up to get replaced. As with all parts in a car, the bigger the car the more expensive the parts and labour.
5. TAX - Oldest trick in the book is to sell a car with very little tax left on the disc. Check out the tax price for the litre of car you are buying this comes as a shock to most people and this another expense that is going to hit you every year, usually around the same time as your insurance. Which brings us neatly on to insurance
6. Insurance - This is the biggest con game in the whole car world. Do a little test, I have personal exerience with this. Ring any car insurance agency. Go through your details with them and get your price. Ring back immediately and sound more confident with what you are saying you will get a cheaper price. They are just guessing on the other end of the phone as to what they can get away with. Ensure that when you do receive your insurance that all the details are correct. A big Scam that is going on at the moment is that they give you a quote for your details then send you out your disk but on your details page they have reduced the price of your car to a fraction of what it is worth, so that when you claim they can disregard your claim advising that you never returned the correct form with your details on it.

Below: Insurance is paint in the ass!

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