Collections VIII

Consumer Protection Laws - Part 5

General Rules Regarding Motor Vehicles

Introduction

Today I'ld like to give some general rules regarding motor vehicles.

1. Read the contract

Make sure it says what you think it does

Ask them to explain confusing parts

Let an attorney review the contract if you have concerns

If it doesn't feel right, check it out

Make changes in the margins & have the seller initial the changes

2. Never impulse buy

Don't buy the vehicle you want right away

Think about it, make sure it's not only what you want to do, but what you can do

If married, talk it over with your spouse first

If single, talk it over with your parents first

3. Don't spend to the limits of your income

Driving a vehicle is more expensive than you thing

Insurance, upkeep, repair, gas, oil, licensing, etc.

Calculate all these things into the cost of the vehicle

Do some checking on the maintenance costs of the vehicle

Make sure you can really afford to do it

Leave yourself a 10% reserve in your budget

Keep the insurance deductible in a savings account

4. Be patient and save up money for the purchase

Personal experience with a watch

Something better will come along if you wait

The first car I wanted was a Pinto

I waited and ended up with a Celica

A much better vehicle

Pay cash and it saves a great deal of money

The larger the down, the lower the monthly payments (or the shorter the term)

Or the more options you have for improvements to the vehicle

5. Don't ever co-sign for anyone unless you have the money in the bank to pay off the loan yourself and you wouldn't mind driving that particular vehicle.

If you do co-sign:

Make arrangements with the Bank to send you billing statements each month so you can track the payments.

Most of the time you will not know there is a problem til the bank sends you a demand for payment in full after they have repossessed and sold the vehicle.

Make sure the insurance company also sends you statements so you can ensure the vehicle remains insured.

One of the major causes of repossession in co-signed vehicles is an accident that makes the vehicle un-usable and the purchases decides to stop making payments because they are getting no use from the vehicle and they have no ability to repair it.