Customer Tips

Consumers armed with information can make smart choices, spot scams and frauds, and avoid problems. Every year the Consumer Federation of America and the National Association of Consumer Agency Administrators survey government consumer protection offices to find out what transactions generate the most complaints. The most recent "winners" were new and used car sales, home improvement, auto repair, retail sales, mail order and telemarketing, and credit and collections. Here are suggestions to help you avoid problems during some of these consumer transactions.

Car Repair

Choose a reliable repair shop recommended to you by family or friends or an independent consumer rating organization. Check out the repair shop's complaint record with your state or local consumer protection office or Better Business Bureau.

  1. When you take the car to the shop, describe the symptoms. Don't diagnose the problem.
  2. Get more than one estimate. Get them in writing.
  3. Make it clear that work cannot begin until you have authorized it.
  4. Don't authorize work without a written estimate or, if the problem can't be diagnosed on the spot, insist that the shop contact you for your authorization once the trouble has been found.
  5. Don't sign a blank repair order. Make sure the repair order reflects what you want done before you sign it.
  6. Is the repair covered under warranty? Follow the warranty instructions.
  7. Ask the shop to keep the old parts for you.
  8. Get all warranties in writing.
  9. Some car manufacturers may be willing to repair certain problems without charge even though the warranty has expired. Contact the manufacturer's zone representative or the dealer's service department.
  10. Keep copies of all paperwork.
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Buying a Used Car

  1. Find a car that the dealer covers with a warranty by checking the "Buyers Guide" posted on used cars.
  2. Select a car with at least a 30-day, 100% warranty under which the dealer agrees to pay all repair costs for covered items.
  3. Avoid "As Is - No Warranty" cars.
  4. Choose a safe car. Look for the current safety inspection sticker required by your state. Call the National Highway Traffic Safety Administration toll free number (1-800-424-9393) to see if the manufacturer has recalled the car for safety defects. If it has been recalled, ask the dealer for proof that the defect has been repaired.
  5. Check with your state motor vehicle department to research the car's title history. Make sure the car is not a "lemon buy-back," salvaged, or wrecked car.
  6. Get the written mileage disclosure statement required by federal law from any seller and make sure it matches the odometer reading on the car.
  7. Check the title to the car before you sign on the dotted line.
  8. Look carefully at the car in full daylight. Take it for a test drive.
  9. Get a reputable mechanic who does not work for the dealer to check it over, and pay for a diagnostic test. Ask the mechanic if the car would pass a safety inspection so that you can ask the dealer to make repairs before you buy the car.
  10. Check out the frequency of repair records for used cars in Consumer Reports magazine which you can find at the library.
  11. Don't sign on the spot. Check prices at the library with the NADA Official Used Car Guide or used car pricing services. Comparison shop.
  12. Handle your car trade-in, the used car purchase, and financing as three separate transactions to get the best deal on each. Get a written price quote before you talk about your trade-in or dealer financing.
  13. Shop in advance for the best deal in financing at your credit union, bank or finance company. Compare their Annual Percentage Rate and total finance charge with financing offered by the dealer. Look at the total cost, not just the monthly payment.
  14. Don't take possession of the car until the financing paperwork is final.
  15. Avoid high profit, low-value extras sold by dealers, such as credit insurance, extended service contracts, auto club memberships, rustproofing and upholstery finishes.
  16. Never negotiate or purchase a vehicle alone, always take a witness in case an issue becomes disputed.
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Buying from a Private Individual

Consider buying a used car from someone you know. You can get a reliable car for a lower price from the original owner who knows the car's service and repair record. But private sellers generally have less responsibility than dealers for defects or other problems.

Check with your state's motor vehicle department on what paperwork you will need to register a vehicle.

Make sure the seller isn't a dealer posing as an individual. That might mean the dealer is trying to evade the law and might be an indicator of problems with the car. Look at the title and registration. Make sure the seller is the registered owner of the vehicle.

Ask the seller lots of detailed questions about the car. Have the car inspected by your mechanic before you agree to buy it.

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Buying from a Dealer

  1. Check the complaint records of car dealers with your state or local consumer protection agency or Better Business Bureau.
  2. Read the "Buyers Guide" sticker required to be displayed in the window of the car. It gives information on warranties, if any are offered, and provides other information.
  3. In most states, used cars may be sold "as is." If the "as is" box is checked off on the "Buyers Guide," generally, you have no warranty. If the "warranty" box is checked off on the "Buyers Guide," ask for a copy of the warranty and review it before you agree to buy the car.
  4. Have the car inspected by your mechanic before you agree to buy it.
  5. Never negotiate or purchase a vehicle alone, always take a witness in case an issue later becomes the subject of a dispute.
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Buying a New Car

  1. Evaluate your needs and financial situation.
  2. Read consumer magazines for performance, service, and safety ratings, and test drive several models before you make a final choice.
  3. Find out the dealer's invoice price for the car and options. This is what the manufacturer charged the dealer for the car, not counting any rebates, allowances or other incentives that reduce the cost to the dealer. You can order this information for a small fee from consumer publications you can find at your local library. Find out if the manufacturer is offering rebates that will lower the cost.
  4. Get price quotes from several dealers. Find out if the amounts quoted are the prices before or after the rebates are deducted.
  5. Keep your trade-in negotiations separate from the main deal.
  6. Compare financing from different sources, for example, banks, credit unions and other dealers, before you sign the contract.
  7. Dealer finance managers may try to "flip" your purchase to a lease, ignoring the agreed upon sales price and the promised allowance on the trade-in. Examine dealer documents carefully to make sure you are buying, not leasing, the vehicle. Look for a balloon payment and "base mileage" disclosures that indicate a lease instead of a finance contract.
  8. Read and understand every document you are asked to sign. Do not sign anything until you have made a final decision to buy.
  9. Think twice about adding expensive extras you probably don't need to your purchase, for example, credit insurance, service contracts or rustproofing.
  10. Inspect and test drive the vehicle you plan to buy, but do not take possession of the car until the whole deal, including financing, is finalized.
  11. Don't buy on impulse or because the salesperson is pressuring you to make a decision.
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Car Leasing

When you buy a car, you own the car. When you lease, you pay to drive someone else's vehicle. Although leasing can involve lower monthly payments than a loan, at lease end, you still have no ownership or equity in the car.

New rules under the Consumer Leasing Act require leasing companies to disclose standardized information to lease customers. In addition to the information disclosed on a standardized form, you should always ask for an itemization of the capitalized cost.

Shop as if you're buying a car. Negotiate all the lease terms, including the price of the vehicle. Lowering the lease price will help reduce your monthly payments. Get all the terms in writing.

Ask about standards for wear and use. Dings that you may regard as normal wear and tear may be billed as significant damage at the end of your lease. Ask the dealer to give you an example of the early termination charges, for example, if the car is totaled six months after the lease is signed. Expect to pay a substantial charge if you give the car up before the end of your lease. Most leases allow you to drive 12,000 to 15,000 miles a year. Expect a charge of 10 to 25 cents for each additional mile.

Make sure the manufacturer's warranty covers the entire lease term and the number of miles you are likely to drive. Make sure you get every item of equipment listed on the lease. Otherwise, you could be charged for "missing" equipment at the end of the lease.

Before you sign the deal, take a copy of the contract home and review it carefully away from any dealer pressure. Be alert for any charges that were not disclosed at the dealership, like conveyance, disposition, and preparation fees. Make sure you got credit for any trade-in. You do not have an automatic three day right to cancel a lease after you sign it.

When you finance a car, the finance charge must be stated as an Annual Percentage Rate (APR). There is no similar requirement for disclosing the cost of leases. "Lease rates" or "money factors" do not have standardized definitions and are not equivalent to an APR.

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Auto Service Contracts (Extended Service Warranties)

Dealers may try to sell you an auto service contract or "extended warranty" when you buy a new or used car. A warranty comes with a new car and is included in the original price of the vehicle. A service contract is sold separately and is a promise to pay for certain repairs or services. Usually a service contract is a high-profit add-on, costing hundreds to more than $1,000.

The service contract may duplicate any warranty coverage you get from the manufacturer or dealer. Does the dealer, the manufacturer, or an independent company back the service contract? What happens to your coverage if the dealer or administrator goes out of business?

Common repairs for parts like brakes and clutches generally are not included in service contracts. Watch out for exclusions that deny coverage for any reason and other terms that could cost extra when repairs are made.

How are claims handled? Can you choose among several service dealers or repair centers or do you have to return to one dealer? Is your car covered if it breaks down on a trip or if you move out of town? Do you need prior authorization for repair work?

Failure to keep up manufacturer's recommendations for routine maintenance can void the service contract. The contract may prohibit you from taking your car to an independent station for routine maintenance or performing the work yourself.

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