By Amit Laufer
Buying a car is usually our second biggest investment after our home purchase and most of us will do it more than once in our life.
There is something emotional about cars, it represents our taste and style, our economic status and our character. Some women even claim that a car is a man's extension of his reproductive organ. One the other hand (the good hand) there are women out there that might express their exhibitionism and extravagance by choosing to drive a red flashy car for the whole world to notice them. Both sexes would agree they sometimes feel they "fall in love" with a certain car model.
There are people who get very existed from a small scratch on the cars lower side, as if it were their own skin. The beauty of the car, its aerodynamics shape, the gadgets inside, the seats the feel of it all play a major part in our decision making.
In our modern life it's almost impossible to function without one and it's expensive to acquire, to finance and to maintain.
Buying a Used Car
The question I would like to bring up here is whether it's wise to buy a used car or to make an additional effort and buy a new car.
If you look at it purely from an economical stand point then it's quiet obvious that due to the fact that you miss out on the heaviest depreciation hit the average car absorbs in the first two and three years it's wise to buy a used car. A car of two or even three years on the road is basically a new car and in some cases didn't even finished the manufacturers original bumper to bumper warranty. (Not included labor 8-(
On the average you might save on a used car anywhere between $ 3,000 to $ 8,000. In case you know how to do it via a car dealer that will buy the car for you at a car auction limited to car dealers only (for a couple of hundreds of dollars commission) you might even get a real bargain.
Another good reason to buy a used car is the fact you can put your hands on a bigger or better or in other words more car for the same budget as the new smaller car would have cost you.
More and more manufacturers offer "certified pre-owned" programs. Cars sold as certified pre-owned (CPO) bridge the gap between new and used. They are subject to a rigorous inspection and repair process, and usually are covered by a warranty from the manufacturer. CPO cars will usually cost a bit more, but the added warranty and peace of mind makes them a good value.
When purchasing a used car you should protect yourself from buying a flood damaged vehicle by doing a little research and by having the vehicle thoroughly checked by a mechanic.
Rain, thunderstorms, swelling rivers and seasonal hurricanes hitting the coastlines all contribute to flooding disasters that can mean serious water damage to vehicles in those areas. Water damage from 1999's Hurricane Floyd ruined approximately 75,000 vehicles and more than half of those ended up back on the road. Tropical Storm Allison damaged another 95,000 in 2001 and Hurricane Ivan left more than 100,000 vehicles water-logged.
The numbers for Hurricane Katrina are expected to skyrocket above half-a-million and safety experts warn that many of these flood damaged vehicles also will be dried out and offered for sale. Hurricanes and tropical storms, however, are only part of the problem.
Flooding can occur throughout the year and in any part of the country. however, auto industry analysts caution consumers that the risk of buying a flood damaged car is not limited to these areas. Flood damaged cars are often repaired cosmetically, and moved to adjacent states or even across the country where they are sold to unsuspecting consumers.
These floodwaters can cause damage to vehicle computer and electrical systems, as well as potentially causing anti-lock braking and airbag systems to malfunction.
World Trade Center Damaged Cars, thousands of cars were damaged in New York City on 9/11/2001. It's a prime example of disasters having long term effects other than the initial death and destruction. These cars will no doubt be salvaged, rebuilt, sold at car auctions and have their titles rebuilt, most likely out of state.
An important help is the nationwide history data base of the cars in terms of damages, salvaged, lemon, flooded, fraud, accidents, rental etc' you can look it up at:
www.carfax.com/
In addition it's recommended you have a mechanic check it out - A certified, trusted mechanic will test the electrical and safety systems, two of the major components that water can affect. They can also look for signs of water damage that may not be visible to the untrained eye.
Car Donation
It is estimated that every year, more than a million Americans donated their cars. Why do they donate their car? Well, few reasons: A. The proceeds go to charity organizations and it provides for the donor a good feeling of contributing to society. B. its tax deductible (Less than it used to). C. The car is being towed or driven away by the company who arranged the deal.
Unfortunately, whether through ignorance, confusion or greed, a substantial percentage of car donors have been deducting the full "suggested retail price" - what a dealer would get for reselling your trade-in instead of the fair market value. That's far more than the IRS had intended, costing the government millions in lost tax revenue.
The charities weren't making much, either. Most of the donated cars were sold by the charities for a pittance at auction, and middlemen who administered the programs on behalf of the charities took a large percentage of those meager profits.
So IRS changed the rule last year. From now on, if your car is valued more than $500, the deduction is limited to the charity's actual selling price. The donor must attach a statement of sale to the tax return in order to receive the deduction. (The charity is obligated to provide the statement within 30 days.) You are not entitled to know the deduction amount before donating your car. Although the IRS has closed the loophole in the law, there is still a way to deduct full market value of your vehicle: If the charity uses the car itself to further its specific purpose
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Amit Laufer is the owner & editor of:
Cars I Like
Buying A Quality Used Car For Less
