If you're 'upside down' on your car, it means you owe more money on it than it's worth. This can make it hard to sell or trade it in, because you still have to pay off the loan even if the car isn't worth that much anymore.
The out-the-door price is how much you'll actually pay to buy a car, including everything like taxes and fees. Knowing this helps you budget better before going to the dealership.
Financing is when you borrow money to buy a car and pay it back in smaller amounts each month. This way, you don't have to pay the full price all at once.
Premium fuel is a special type of gasoline that costs more than regular gas. Some cars need it to run well, especially those with powerful engines, but it can make filling up more expensive.
High compression engines squeeze the fuel and air mixture more than regular engines. This can help them produce more power, but they usually need special fuel to work properly without making noise that could damage the engine.
An oil change is when you replace the old oil in your car's engine with new oil. It's important to do this regularly to keep your engine running smoothly.
Maintenance costs are the money you spend to keep your car running well. This includes things like oil changes, tire rotations, and fixing any problems that come up.
Overheating happens when your car's engine gets too hot. This can be caused by not having enough coolant or problems with parts that keep the engine cool. If it gets too hot, it can damage the engine.
The check engine light is a warning light on your car's dashboard. It means there might be something wrong with the engine or the system that controls emissions, and you should get it checked out.
Retail price is the price you pay when you buy something in a store. For cars, it’s the price that a dealer or seller asks for a vehicle based on its condition and how much people want it.
Misfiring means that the engine isn't working properly because some parts aren't igniting fuel as they should. This can make the car run poorly and lose power.
Open recalls are problems with a car that the manufacturer has identified but hasn't fixed yet. It's important to check for these before buying a used car to ensure it's safe to drive.
A VIN number is like a car's fingerprint. It's a special code that helps identify the car and can tell you important details about it, like if it has any safety recalls.
Coolant leaking is when the liquid that cools the engine escapes from its system. If this happens, the engine can overheat, which can cause big problems.
The Hyundai Elantra is a small car that's known for being budget-friendly and good on gas. It's been around since the 1990s and has gotten better over the years with new features that make it safer and more comfortable. People mention it because it's a smart choice for those who want a reliable car without spending too much.
The Hyundai Sonata is a family car that's been around since the 1980s, and it's known for being affordable and reliable. It has a nice design and comes with lots of tech features that help keep you safe while driving. People talk about it because it's a good option for those looking for a dependable car.
The Toyota RAV4 is a popular SUV that many families use. The 2019 version had some complaints, so it's good to check what those issues are if you're thinking about buying one.
A transmission oil cooler helps keep the fluid in the transmission cool, which is important for keeping the transmission working well. It's a good idea to have one, especially if you drive a lot or tow things.
An auxiliary transmission cooler is a part that helps keep your car's transmission from getting too hot. It's especially helpful for trucks or cars that carry heavy loads or drive in hot areas.
Transmission fluid is a special liquid that helps your car's transmission work properly. Changing it regularly helps keep the transmission running smoothly and can prevent problems.
The Ford Bronco is a tough SUV that was first made in the 1960s and is known for being great for off-road driving. It was brought back in 2020, and people love it for its cool looks and ability to handle rough terrains. It's often talked about because it's a symbol of adventure and outdoor fun.
A rotary engine is a special kind of engine that works differently from regular engines. It uses a spinning part instead of pistons, making it smaller and lighter.
Antifreeze is a liquid that keeps your car's engine from freezing in cold weather and helps it stay cool when it's hot. It also protects the engine from rust.
Power steering fluid is a special liquid that helps you steer your car easily. It makes turning the steering wheel less hard, especially when parking or making sharp turns.
Brake fluid is a liquid that helps your car stop when you press the brake pedal. It moves the force from your foot to the brakes, making them work properly.
Windshield wiper fluid is a liquid that helps clean your car's windshield. It sprays onto the glass to remove dirt and make it easier to see while driving.
LIVE
Hey folks, Lenny Lawson here, the car guru.
I just want to let you in on this email I got this morning.
Basically it says after our most recent quarter four rate evaluation, my dealership has been
issued a $392,000 revolving credit line structured entirely at the corporate level.
So you know what that means?
That means that I would not have to sign it personally.
It would just be a loan to my corporation.
So the authorized limit is $392,000.
The rate range is 6.75% to 7.55% not sure exactly what the criteria is to get the lowest rate.
It is a 12 month revolving line of credit.
It is renewable and there are no fees.
Doesn't that sound like a great deal?
You know I could borrow that then turn around and loan it at, let's see if I got the 6.75,
13.5% which would really save a lot of people some money.
I mean you may think that 13.5% is a really high interest rate to pay on a car and it is.
You know given that the rates have been as low as they have been.
But what about those poor folks that have to pay 16 and 18 and 25% to get a car?
Those people with marginal to bad credit, you know really bad credit risky people.
Those are the kind of rates they have to pay.
So I could actually borrow this money loaned to them.
But then you know I'd have to worry about collecting also because that's the thing about
people with bad credit.
They don't pay.
Well they may pay but you know it just takes a lot of work to squeeze the money out of them.
And I don't want to do any squeezing at this point in my life.
So no I'm not going to take advantage of this but you know too many people do.
They get those credit card offers.
You know they see a really low rate on buying a car.
Oh honey we're at 5% we can go borrow money and get a car at 0%.
But there's so many more factors involved than just the interest rate that you have to pay.
You know 5% it really isn't that bad.
And another thing they need to think about is are they upside down on their trade in?
Upside down is kind of a dealership term.
I guess maybe it's generic people in the public.
It's when people owe more on their vehicle than it's worth.
Well I guess you could be upside down on your house as well.
That's maybe less likely because houses typically don't depreciate.
Hopefully they go up in value.
I know the ones that I've bought over my lifetime have all gone up in value.
The last one dramatically.
Why?
Because I've had it for 30 years.
And plus I've taken good care of it.
And I've improved it and I've added on multiple times.
But I'm not going anywhere.
So I don't have to worry about my house.
But if I had a car.
Let's say that you bought a vehicle a year ago and it's just not fitting your lifestyle.
So you want to trade it.
So you go online and you start looking at vehicles.
Let's say that well I just had a new Nissan Pathfinder just dropped off off of a truck.
Let's say that you know you're in a 5 passenger SUV and you want to go to a 7 passenger SUV.
Maybe your family has grown.
Maybe you feel like you have good reasons for doing that.
But you just bought your, who knows, Hyundai Santa Fe.
You just bought it a year ago.
And you financed it all.
Didn't pay anything down.
Financed it for 72 or 84 months.
Do you think you're going to be able to trade vehicles and even come close to keeping the same monthly payment?
Nope.
Not going to happen.
But now there may be some of you say well I did it a couple years ago.
I traded.
No.
You did.
And they traded with you.
But you are in so much worse shape now than you were back then.
Because not only are you carrying the negative equity from that previous transaction.
You're carrying the new negative equity that you now have in this other car.
You double up like that.
And that's what people don't understand.
They keep compounding the problem.
They're not doing the math.
And as a savvy car buyer you have to do the math.
You have to take that time before you go into the car dealership and really look at your budget.
Look what your outgo is versus your income.
And really find out what you can afford from a monthly standpoint.
Because you don't have the cash to pay for the vehicle.
If you're going to get a new vehicle you're going to have to finance it.
The next phone call is to your insurance agent.
What is the insurance going to cost on a new vehicle?
This is what I'm looking at.
Would you tell me if my rates are going to go up?
And then you think about the fuel economy difference between the vehicle that you have been driving and the new one.
Because that's a cost, right?
Does the new one that you're looking at require premium fuel?
There are a lot of new vehicles that require premium fuel because of the high compression engines.
Yeah, they get great gas mileage but you've got to pay that extra dollar a gallon or whatever it is now to get premium fuel.
Is it worth it?
Well when you add up your insurance cost, your fuel costs, what your new monthly payment is going to be,
is there anything else that you need to think about there?
Yes there is.
What about maintenance costs?
And sometimes it's not just about what it costs to do the oil change, which that can vary widely.
I mean it can cost $90 to do, well that's hard for me to even say that.
We used to do oil changes on a regular basis for $29.95.
That was our going price until oil prices went nuts.
And now, you know, typical oil change is over $100 now.
Not here but you know in a lot of different places.
But on certain vehicles it can cost $3, $4, $500 just to get a regular maintenance service done.
Is that important?
It sure is.
I would find that out before I purchased a vehicle.
Plus how far do you have to drive to get it serviced?
I was talking to a gentleman the other day.
He said the dealer that he typically used for maintenance on his vehicle had closed.
So what's he got to do?
Well he's got to drive either I think it was 60 miles one way or over 100 miles the other way to get his vehicle serviced.
All of these things add up.
So all of that has to be taken into account before you go out and just blindly shop for a vehicle.
Because maybe you can save a few points of interest.
So what?
Or because you're just kind of tired of what you're driving.
And you know sometimes we make those mistakes we step into it in other words.
And we just don't acknowledge that we're just going to have to bite the bullet and stick with what we got.
Because that makes the most economic sense to do that.
These are expensive times.
And there's no doubt from the grocery store to the electric bills to the price of gasoline is not bad now.
Thank goodness.
But it seems like everything else is very expensive.
And you look at the price of new cars and the price of used cars all of this stuff adds up so quickly.
So we have to really put the put our thinking caps on before we go out and shop for something as expensive as a car.
It just makes more sense to consider all of the different costs that can be involved in not just what our monthly payment is going to be.
OK, I'll be back in just one minute.
OK, I am back.
Here's a true story just happened this past weekend about a person that came into the dealership to trade cars.
And I'm not going to say what they were driving or what they were trading for or what their name is.
You just have to trust me.
I wasn't at the dealership, but I got involved because I was sitting in my favorite chair at my house watching a football game and my phone rang.
And it was one of my sales managers.
He said, Lenny, we've got this person here that's really angry and they want to talk to you.
And I said, what are they angry about?
I said, well, we we made them an offer on their vehicle and they said it was insulting and that they knew you and and they wanted to know when they could talk to you.
And you've always told us just to call you.
And I said, well, I'm glad you did.
Who is it?
And what's the deal?
Explain to me what's going on.
So they did.
And I understand why we offered them so, so little money because the car was overheating.
Not consistently.
It was an intermittent problem.
Check engine light was on.
Wasn't a valuable car to begin with.
I mean, in best case scenario, five to $8,000 maximum.
And that's a retail price, 150,000 miles on it.
But for some reason or another, it's eating coolant and a freeze.
It's just kind of going away.
Cars overheating.
Check engine lights on.
And occasionally it won't run very good.
It's misfiring.
And on this particular vehicle, we know what that is.
We know what that means.
That means the vehicle is going to have to have a new engine.
Now, when you take a car that's in a retail value is $5,000 and it needs a new engine.
What does that make that car worth?
Basically nothing.
Now, how do you tell somebody that when they've only owned that car for about a year?
It's been a fine car up to that point, but it's not anymore.
And now they're wanting to trade it.
I understand why they're wanting to trade it because it's got a problem.
So I got the customer on the phone, talked to him, calmed him down and explained to them why they got the answer that they got.
And it's because of this.
This is the scenario.
And he was still upset, but he apologized the way he acted.
And he called me the next day and said, can I come in and apologize to the salesperson?
I said, well, sure, you don't have to do that.
My concern is what can we do to help at this point?
How can we help you out of this problem?
Because he has to have a new vehicle.
And when he bought it, you know, he was buying a bargain.
He knew, I mean, it was not an expensive car.
But how could he have avoided this problem?
You know, that's what I want to help you all with.
You and as we say around here, I want to help you and so that you don't make this same mistake.
That's what they say in East Tennessee.
Well, not everybody.
Some people say that.
I had a good friend that, well, when we moved here, I was 14 years old and we became good friends.
And I'd go over to his house, spend the night occasionally.
I could get by with stuff at his house easier than I could get by with the same stuff at my house.
So I enjoyed spending the night over there.
We'd sleep in he and his brother's twin beds and his mother would come in in the morning and she would say,
what do you want for breakfast?
And that was the first time I'd ever heard.
I didn't know what you and's meant, but I understand what do you all or what do you folks want for breakfast?
So back back to the subject matter at hand.
How do you avoid this?
How do you avoid buying a car with a known problem?
Well, the first thing you do is, well, don't leave a deposit unless you know for sure that it's passed the
investigation phase.
So you can put that you can put quotes around that the investigation phase.
This is what you do before you buy a used car.
You call a dealer that sells that particular make and model and you ask them,
oh, make sure you have the VIN number and you ask them if the vehicle has any open recalls or any known problems
because you're thinking about buying one and any dealership worth their salt will tell you if there's an issue.
And this particular make and model and year, which they don't make anymore.
They stopped making that particular car.
But they were had a known issue of coolant leaking into the cylinder due to cracks basically in the cylinder wall.
And they started happening around anywhere, probably 60 70,000 miles at the earliest,
but especially in higher mileage cars.
He bought the car to had, I think 120,000 miles on it.
So don't buy that car.
I mean, if you're looking at it and you find that out, you don't buy that car unless you have a spare engine laying around.
And so it really doesn't matter what it is.
If it's a Honda, a Toyota, a Subaru, a Ford, a Chevrolet, it doesn't matter what brand always do the investigation
and use the VIN number because that has the engine code in it and they'll be able to look it up.
Now, if you don't want to do that and get 100% accurate information, you can go to carcomplaints.com.
I'm going to look this particular vehicle up and see.
So I went to carcomplaints.com and I went to that particular brand.
Now I'm looking for that particular model.
Where is it?
There it is.
And 2338 complaints.
What are the complaints?
What was the worst years?
Well, I see 2014, 13, 12, 11, and 10.
And then 2010 was the worst year.
And it tells you what all the complaints were in that particular year.
Let's see.
It breaks it down here.
There's steering problems was the number one.
Then engine problems, transmission problems, interior accessories problems, brake problems, fuel system problems.
Rest of them are pretty minor and just a few complaints.
Would that be great information if you're trying to buy a vehicle?
Carcomplaints.com.
Pass that on to anybody that's thinking about buying a used vehicle.
Pre-owned, as dealers like to call them.
You know, it's funny how marketing works, right?
We think that if we say pre-owned, that sounds a lot better than used.
Okay, so I'm going to pick on another car here.
Let's see.
Hyundai Elantra.
I had somebody come in the other day that was talking about an Elantra that they had had in all the issues.
I said what year was it?
And they says 2013.
So I just went to carcomplaints.com.
I wanted to see if it was on there.
And yep, lots of complaints on a 2013 model.
But if you look at the previous years, it's really less than average number of complaints or subsequent years.
But 2013, they had big time nightmare.
So what it was, most complaints were ticking in the engine, which is typically a valve train issue.
Complete engine failure.
A bunch of those.
Runs roughly.
Shaking.
Vibrating.
No acceleration.
Stalls while driving.
Even unintended acceleration.
That was just one year for that Hyundai Elantra.
And then Sonata, which is another Hyundai, their problem year was, let's see, was 2011.
So you've just got to check on these sources.
I think it's very important before you go out and buy a used car, don't you?
You know, somebody told me the other day, well, Toyotas are perfect.
Well, probably not.
I looked at the Toyota RAV4 number of complaints and 2019 apparently was not a good year for the Toyota RAV4.
And in the RAV4's situation, it wasn't cooling system or suspension or fuel system or interior or exterior.
It was transmission.
Transmission problems.
They use a CVT transmission.
Continuously variable transmission.
Are all CVTs bad?
No, they are not.
Not if you keep them serviced.
As I said the other day, most people go get their oil changed.
That's in the engine.
They do nothing about their transmission.
They don't service their transmission.
They forget it even has a transmission.
Until they put their foot on the gas, engine revs up and the vehicle won't go.
Even when it's in drive.
That's because they didn't service their transmission.
It's possible that some internal part failed, but that is really rare.
I mean, really, if you service the transmission and make sure if you buy any vehicle that has the option of a transmission oil cooler.
This is an additional oil cooler for the transmission.
Order it.
Make sure you check that box.
Especially if you're driving a truck.
If I did a lot of traveling or a lot of driving in the mountains in any vehicle, I'd have an auxiliary transmission cooler installed.
Your transmission will last a lot longer.
If you replace the filters and service the thing, get that old fluid out of there.
Just take care of it.
Don't abuse your vehicle.
Don't drive like me.
Drive like a normal human being.
No, I'm kidding.
I don't drive harshly.
I mean, there's been people that have had problems with the Chevrolet and the Ford 10 speed automatic transmission.
And usually those are fixed, believe it or not, with a software change.
They just download a fix and it changes the shift patterns of the transmission.
There's nothing wrong internally.
The folks that have problems just aren't getting their transmission serviced when the owner's manual calls for it.
So just what is a serviceable when it comes to fluids on your vehicle?
Well, I'll share that with you right after this break.
Okay, I am back.
You know, the funny thing about fluids is that occasionally they don't stay put.
We were cleaning out my garage the other day and my wife looked down.
I had had my 1974 Broncos sitting there for some time and she looked at it and said, what's that?
And I said, engine oil.
Where's it from?
I said, the Bronco.
That's dangerous and she's right.
I mean, if she were to step in that, she'd probably hit the concrete.
So fluids, they either leak out or they are used.
Now, I remember when we were selling the Mazda RX-7 had a rotary engine.
It was designed to use a quart of oil every 1000 miles.
If it didn't use a quart of oil somewhere between 800 and 1200 miles, something was wrong with the engine.
You talk about trying to get people used to something because back that time if a vehicle used a quart of oil in 3 or 4,000 miles, there was something wrong with it.
But that's just the way the engine was designed.
So that's what happens to fluids and if they're leaking out or they're being burned for one reason or another, then there's a problem.
And you also got to be concerned about the quality of the fluid that you're putting in your vehicle.
I mean, most of my vehicles, I'm using full synthetic.
I just, I don't even bother with just standard oil or even a blend anymore because I'm just kind of weird that way.
But yeah, your engine has oil in it.
Your transmission has automatic transmission fluid or manual gear oil in it.
Your cooling system uses antifreeze.
Your power steering system uses some type of power steering fluid or automatic transmission fluid in some older models.
Your braking system, it's hydraulic, so it's using brake fluid.
Your air conditioning uses refrigerant.
Sometimes it's a gas and sometimes it's a liquid.
So it sounds like a liquid in the can, but it's under pressure.
Your rear differential or front differential uses a special type of gear oil.
And then, well, what else?
Oh, windshield wiper system.
Of course, that's kind of a convenience item, but it uses fluid.
That's a lot of different fluids.
And in a lot of cases, they're purified with a in-system filter.
And you want to make sure that you're using a quality filter, quality fluids that were designed for your vehicle.
And then over time, if you change them the way you're supposed to, your vehicle will last longer.
It's a whole lot cheaper to change or oil them to replace an engine.
And to service your transmission rather than to have to tear into your transmission and replace something.
So these are all different ways to save yourself money in the long term.
And that's the kind of stuff that I try to do here.
I want to improve your car life.
That is my goal.
And it cost you absolutely nothing to get the MyCarGuru guidebook.
Just send me your email address to my cell phone, 423-552-2020.
If you don't have a, or if you can't do texting because you're still using a flip phone like a lot of my customers do,
then just, you know, somebody that has one.
And if you don't have an email, I'll send it to them or I'll mail it to you.
I'll print you out a copy and mail it to you.
So 423-552-2020, my email address is lendinglosson2020andgmail.com.
And I'll see you on the next edition of MyCarGuru.
About this episode
Navigating the complexities of car buying is crucial, especially in today's economic climate. Lenny Lawson shares insights on when to hold off on purchasing a new vehicle, emphasizing the importance of understanding financing, trade-in values, and total ownership costs. He discusses the pitfalls of negative equity and the hidden expenses of insurance, fuel, and maintenance. Real-life anecdotes highlight common mistakes buyers make, and Lenny provides practical advice on researching vehicle history and potential issues before committing to a purchase.
