Quiz: Car Buying Tips

The first thing you must decide before you begin your automobile research is whether you want a new car or a used car. Of course, there are benefits and drawbacks on both sides.

There are more than 2 million car accidents annually, so chances are if you are in the market for a used car, you will come in contact with at least one automobile that was in an accident.

One of the largest benefits of buying a used car is that you can often get a great deal and in many cases, the car you buy may even be relatively new. Successful used car buyers often are just as happy with their used car as new car buyers are with a new vehicle. But remember, the most common car-buying horror stories do involve the purchase of used cars. When you have a good idea of what kind of car best fits your needs and budget, you can begin your research on used cars.

Classified listings are used by both dealers and individuals to sell used cars. Some dealers even post their used cars on used car Web sites. Person-to-person transactions through people you know, or via online and print classifieds can be a good option if you want to avoid a dealership.

Never sign an "As Is" statement. Many used car dealers will mix that in with the other paperwork you'll be asked to sign. As with anything that requires a signature, READ BEFORE YOU SIGN. You should have at least 30 days to make sure the car is in good condition. If you sign an "As Is" statement, once you drive the vehicle off the lot, anything that goes wrong is your problem.

A Vehicle History Report will include everything you need to know about a car, including: if it was ever salvaged or recalled, the number of previous owners, if it ever failed inspection and/or if someone tried to create a fraudulent odometer reading. Consumers can obtain a Vehicle History Report at CARFAX.com.

In addition to using the Internet to research the car you want to buy, you can also use it to figure out your finance options and select a warranty for your car.

A warranty is a contract that guarantees maintenance if your car has any mechanical or other problems. Remember that warranties are another way for dealers to get more money out of your bank account, so know what kind of warranty you want and how much you are willing to pay for it.

Because high mileage can decrease the selling price, some unscrupulous people practice odometer fraud. Although it is a crime to try to "roll back" or change the odometer reading, that doesn't stop people from doing it.

The thing that makes most car buyers nervous is that they know they are going to have to negotiate. Don't be afraid of negotiating. If you go into the dealership with a very good idea of what you want and what you want to pay, the negotiating is up to them, not you. You've done your work and now the dealer has to work to get closest to the price you want to pay.