Tools For Your Test-Drive Kit

Test-drive kit from household items

Items from your junk drawer can help you perform the visual inspection portion of your test drive.

If you have a junk drawer, chances are you can find the raw goods for a basic test-drive kit. These items will help you look for potential trouble spots and help you to to rule out beaters, junkers and other automotive  nightmares.

A visual inspection is a key component of your test drive.  While nothing will replace a thorough pre-sale inspection by an automotive tech., a visual once-over will help you decide whether or not to road-test the car and move forward with a pre-sale workup.

Pencil and notepad:  Take some time immediately afterward and write down your initial gut reactions to the car. Make note of any trouble spots to discuss with the seller or dealer (these trouble spots can also help with negotiating your final price). As an alternative, use the voice memo feature on your cell phone or tablet.

Coin: The perfect cheapie tool for measuring tire tread depth. You’ll want to aim for 2/32 inch at the very least. Take the coin and place it upside down, with the head side facing you. If Abe Lincoln’s head is completely visible, the tires are shot.

Flashlight: This is the ideal  tool for peering into nooks and crannies of engine compartments and other hard to see areas. It’s perfect for spotting cracked/swollen hoses, leaky fluid reservoirs, loose fittings,  and other potential trouble spots.

A clean cloth: Grab one that has enough space for you to test both the oil and the transmission fluid. The condition of both fluids is a good indicator as to the overall health of the car, and whether or not it has been regularly maintained. If fluids are sludgy or discolored, you could be dealing with a car that’s been neglected.

Magnet: Take a kitchen magnet and place it along any metal surfaces on the the car’s body that activates your “it’s been in a wreck” radar.  The magnet will fall off  any areas that have been patched or resurfaced. Areas that are dimpled, rough to the touch, or uneven are tip-offs. A magnet coupled with a thorough visual inspection will help you rule out beaters in disguise.

Tire gauge: Tires that aren’t inflated properly can affect the car’s handling and tracking. Tire gauges are relatively cheap and you can grab one for a few bucks at your local auto supply or on Amazon. Look on the sidewall of the tire for the manufacturer’s recommended inflation guidelines.

Mirror: Perfect for peering into engine compartment nooks and crannies to get an additional view. You can buy one for a few bucks online or at an auto supply store. I lent mine out, (and have yet to get it back) so in a pinch I glued an old compact mirror to a ruler. The seller had a good laugh until I spotted some serious trouble spots, nixed the road test and walked away.

If the thought of performing a visual inspection leaves you cold, bring a mechanically-inclined friend with you. You’ll get help in determining which cars are worth a second look and which cars to strike off your list.

 

Are You Really Ready To Buy A Car?

How to tell if you're really ready to buy a car

 You may want to buy a car, but are you truly ready to make the leap?

If the thought of financing a car makes your heart race and your palms sweat, you have good reason to feel that way: buying a car is one of the most significant purchases you’ll ever make.

Whether you’re new to the whole car ownership/adulting thing or if you’ve been around awhile, it helps to know the key benchmarks that help determine if you’re truly ready for the leap into car ownership.

Calculate your debt to income (DTI) ratio: Lenders rely on this figure when determining the level of risk involved in extending a loan. You can calculate your DTI ratio here. The lower your DTI ratio, the better your loan terms and interest rate will be.

Here is a breakdown of the DTI ratio ranges that most lending institutions and dealers rely on in deciding whether or not to grant a loan or extend any other offer of credit:

  • 36% DTI ratio is ideal. You stand a better chance of getting the best loan amount, term, and interest rate for you.
  • 37-42% DTI: Borderline high. You may end up with a higher interest rate or a  lower loan amount.
  • 43-49% DTI: High risk of default. Very few lenders would grant a loan to someone in this range. Expect to be saddled with a double-digit interest rate, and/or a high downpayment requirement if you’re granted a loan at all. Not worth it.
  • >50% DTI: This is the “nope” zone for any lender.

Credit counts, too

Check your credit report: Another factor in determining overall creditworthiness is your credit profile and your credit scores. The three credit bureaus (TransUnion, Equifax, and Experian) will offer a free credit report to consumers through their websites.

In some cases, you’ll run into membership fees for extras such as credit monitoring, but unless you’ve been a victim of identity theft, come for the free credit report and stay for the FICO score (available at cost). Your credit score is one of the determining factors for a car loan.

Review your credit report and confirm that all of the information is correct, including the monthly payments on any active debt such as student loans. If you have any recent past due payments, collections, or public records, your chances of getting a decent car loan are slim.

If you notice any errors on your credit report, follow the procedure offered by the credit  agency website. Expect to wait anywhere from 30-90 days for resolution depending on the nature of the error.

Insurance matters

If your DTI ratio is good and if your credit is even better, get insurance quotes on the cars you’re interested in buying.You’ll avoid sticker shock and can factor the payments into your budget.

For example, I was floored to find it would cost me more to insure an 8 year-old Toyota Camry than it would to insure a 4 year-old Hyundai Elantra, mostly due to risk of theft in my community.

Insurance laws vary by state, so make sure you’re covered before taking your car off the lot. Investopedia has a great explanation of car insurance policies if this is an entirely new area for you.

Buying a car is a significant step whether you’re a first-time car buyer or an established car owner re-entering the market. By understanding the key components of buying a car, you’ll know whether or not you’re truly ready to take the leap into car financing and ownership.

 

 

Don’t Let Student Loans Torpedo Your Chances Of Car Ownership

Student loan debt

Your student loans could be why you’ve been turned down for a car loan…but not for the reasons you’d expect.

If you’ve attended college at any point during the past 20 years, chances are you’ve got some student loan debt. According to the popular website Student Loan Hero, 43 million college graduates are carrying some form of student loan debt. The average college grad is about $37,000 in debt by the time they leave school.

When it comes to car loans, however, it may not be the student loan balance that stands between you and a car loan. It could very well be the student loan payment itself. An inaccurately reported student loan payment could  wrongfully land your car loan application in the digital “no” pile (while this applies to all forms of debt, I’m just sticking with auto loans for now).

Right loan, wrong payment

Suppose you’re enrolled in an Income Driven Repayment plan. These programs were instituted so student loan borrowers could make their payments and avoid living in a box at the same time.

In this case, not all federal student loan servicing companies report the IDR amount to the credit reporting agencies. What shows up instead on your credit report instead could be the standard payment amount which is typically much higher.

In other words, instead of your credit report reflecting your $20.00 per month loan payment under an IDR plan, it may show a much higher monthly payment amount calculated under the Standard Repayment plan.

What this means for you as a prospective car owner is this: any time you apply for a car loan, the lender (bank, credit union, automotive finance company) calculates your debt-to- income ratio, or the percentage of your income that is applied toward monthly debt payment.

If this debt percentage falls outside of the lender’s guidelines, your application is either torpedoed altogether, or you could end up getting reamed by an interest rate that’s needlessly high. Both scenarios may be avoidable with some persistence on your part.

Don’t panic. Take action.

If your auto loan application was declined, the lender will issue you an email notice (for online applications) first, followed by a written explanation via snail mail. If your notice indicates “excessive debt load” or similar phrasing, there’s your tip-off.

  • Contact the lender and request a secondary review. Ask which figure was used to calculate your student loan payment. If they used the standard payment as shown on your credit report, offer to send them copies of your Income Driven Repayment plan paperwork showing the correct payment amount.
  • The updated information may or may not save your bacon in terms of finally gaining loan approval or a better rate, but if an inaccurate student loan payment amount was all that stood between you and loan approval, you could be in luck.

Taking out an auto loan, especially for the first time, is a big step. If your loan is declined for excessive debt load, it could be an inaccurately reported student loan payment amount. Don’t let that stand between you and a new or new-to-you ride.

 

Close, But No Car…Again

I was at a neighbor’s house the other day, tossing a Frisbee with her 9 year-old grandson. Each time one of us accidentally hurled the disc into a wall or other obstacle, the other would yell, “UGH, WHAT?! DENIED!” following by gusts of laughter. It was all good-natured ribbing as boys are wont to do.

Nothing like play at full volume to shake off a busy workday and car-shopping nerves.

Close, but no car…again

lol-denied1

I have a feeling the local credit union underwriters did the same thing with my auto loan request because “UGH…WHAT?! DENIED!” This time no gusts of laughter followed. Only ass-kicking disappointment.

“There’s nothing wrong at all with your credit score–in fact, it’s excellent–the problem is you don’t meet our credit guidelines. There’s no long-term credit useage,” the underwriter told me over the phone.

Duh. Go through a blast furnace of a recession and those credit cards get stashed away with a quickness.  I started using them again once I landed my day job last January. I pay the balance in full each month and on time.

“What really came into play, though, was your debt-to-income ratio. It’s outside of our guidelines. In other words, you don’t earn enough to take on that kind of debt.”

Savage.

I’ve been without a car for a year and a half. I’m impatient as hell. Blame it on the health crisis I had three years ago: spend any length of time in the back of an ambulance followed by an inpatient stay in the hospital, and it will change your perspective and sense of time.  It sure did for me.

I feel a sense of urgency to do the things I’ve wanted to do once I had a car. I’ve had it with life standing still.  Life can and will change in a second. Seriously, if the Fates can flip me the middle finger once, they can do it again. At least they can let me have a fucking car this time around before the other shoe drops. Kidding! Sort of.

Odd girl out

I’m definitely an anomaly in my rapidly gentrifying community. People around here now think nothing of dropping $20-30 grand in cash on a car for Princess or Junior as a birthday gift. My next door neighbor bought a 2016 Prius for cash because he was “curious about what all the talk was about.”

(Dude, I could have saved you the money. It’s the strangest-looking car I’ve ever seen, and I’m not sure if that means I like it  or if it means I hate it).

I’ll admit, this recent setback is a blow to my ego. As a Generation X-er, the benchmarks for adulthood included supporting ourselves, having our own place, and buying a car on our own. I feel like I’ve somehow failed at one key aspect of this adult thing.

I called the car’s sellers, a well-heeled couple who lived nearby and explained the deal was a no-go. I’m sure the fact that someone got declined for a small car loan blew their minds, as they paid cash for the Camry when it was a year old.

I’ll be re-grouping in the coming days. Time–and a new car–waits for no one.

In Which a Nervous Car Gal Dips Her Toe Into The Water, Part 2-The Test Drive

The  2008 Toyota Camry  LE goes from snark fodder to a downright respectable choice for this car shopper.

I never thought much of Toyota Camrys. As a long-time favorite of the much older drivers in my neck of the woods, I never gave the Camry  a second glance. Plain. Boring. Stodgy. Frumpy.

And popular. The Camry is one of Toyota’s best sellers and a leading contender in the busy mid-size sedan segment, so they can’t suck that much. I mean, really.

My neighbor’s son-in-law has his 2008 Camry LE up for sale and I’m feeling my way back into the car market.

What did I have to lose? I made arrangements for a test drive.

My community is the perfect test chamber for a car: the streets serve up a combination of wide open stretches, hills, speed bumps, crappy conditions, cul-de-sacs, and even a roundabout thrown in for good measure.

While the car lurched a bit during initial acceleration (red flag #1) it had no trouble darting up the winding roads on my way to a hilltop housing tract where most of my testing would take place.

The 2.4 liter, 158 hp 4-cylinder engine handled the uphill haul well with little to no fuss.

The Camry was nimble as I worked my way up the curving road. I love cars that offer a smooth ride while being agile and  sure-footed at the same time. Good road manners do count.

While the cabin wasn’t as quiet as I had hoped, it was still bearable.

Once I reached the top of the hill, I headed for a cul-de-sac. Front wheel drive cars are prone to CV boot issues, and I wanted to rule that out from the beginning. After a few tight turns in a circle left and right, with radio off and windows down, there was nary a peep. Sweet. Onward.

The steering was tight, and this car has an excellent turning radius, something I missed from my Volvo-owning days. Braking was another story as the brakes were grabby (red flag #2).

The car had a distinctive pull to the left (red flag #3) as I drove a straight line with hands off the wheel. Low tire? Crappy alignment? A future million-dollar fix? Hard to tell without a thorough  pre-sale workup.

Vanilla interior, thy name is Camry

The interior was dutiful and bland, but holy moly, was it spacious. I could easily seat two tall adults in the back seat with plenty of head and leg room, sloping roofline be damned. The driver’s seat was a perfect fit. I had plenty of head and leg room.

The plain interior has an upside: it serves as a canvas for some personalized touches. I could easily make this car mine with some simple tweaks.

Controls in the center stack were well-placed and ridiculously easy for me to use. I popped in a Strauss CD and the sound quality was glorious.

However, visibility in this car isn’t just bad, it’s terrible. Had I not been as vigilant as I was, I easily could have sheared a fender or two while backing out of a parking stall. Rear visibility is just awful. I would need lots of road hours to get used to it.

I deeply and sincerely hope to hell subsequent Camrys have better visibility. Thankfully, backup cameras are now standard as of this year.

Aside from the car’s drawbacks, I found it to be a likable, potentially viable option for a driver like me. Of course, the thought of shouldering both repair bills and a loan payment made me sick to my stomach; over 93000 miles on the odometer, so an eventual big-ticket fix isn’t that far-fetched. Eep.

Stay tuned, as the seller and I will be arranging for a pre-sale workup and I’ll be digging into the maintenance records.

In Which a Nervous Car Gal Dips Her Toe Into The Water, Part 1

I’m not gonna lie. The thought of financing a car makes my stomach churn.

As someone who’s had the bottom fall out three times in the past ten years, there’s a reason for the sweaty palms, dry mouth, and upset stomach.

Like most Americans, I got hit hard in the recession. First with a job loss and the subsequent financial disaster (raiding my 401k so I didn’t end up on the streets. Same for my savings),and then the loss of my car when a 16 year-old totaled it while chatting on her cell phone.

A health crisis three years ago wiped me out physically and financially. To this day, I think I got through the 2013 L.A. Auto Show on sheer will. No way was this Cinderella going to miss the ball.

I rebounded in early 2014 and picked up a social media gig with a local business owner. She abruptly changed course in January 2015, shuttering her practice and leaving me jobless.

Lightening struck not once, but three times. And people wonder why the thought of financing a car makes me hyperventilate and become nauseated.

Back on my feet

Currently, I’m what lenders would consider a “good risk” for a modest car loan.

In other words, I have the “right stuff” to make the leap: income from a stable source, a stellar credit rating, and a gig that isn’t likely to disappear anytime soon.

My solid credit score will put me out of reach of predatory sub-prime lenders and their shenanigans.

The bad news? I’d qualify to finance an used car under 10K because of my modest income.  Good cars in that range are few and far between; most of them that I’ve looked at have mechanical issues or have been treated badly. A loan payment and repair bills?

GodNo.gif

I test-drove a car yesterday that is a possible strong candidate. A cash transaction would be ideal (I could flip the car a few months down the road and use the proceeds as a down payment) but not realistic. It would take years to save up; I’m not 16 anymore.

I need my life back. There are friends to visit, classes to take, appointments to tend to, and additional income opportunities to pursue.  My current method of getting to work involves playing Transit Roulette with a crumbling small city bus system that frequently runs late, or not at all.

I want to be part of a volunteer cadre of drivers for a local non-profit, giving rides to their clients as they go to job interviews, attend classes, and look for work.  I’d like to return to the city college that gave me my start as a lifelong learner, this time as an outreach and tutoring volunteer.

I want to take some time for myself and take a drive along the coast, or along the winding Ortega Highway. My best ideas come to me from behind the wheel of a car.

I really wish I could talk this over with my dad, who had a clear-headed view of life’s tougher choices. I wish he could see me as I take this significant leap.

Join me for the ride in the coming days as I check out the different financing options available to me. In the meantime, could someone pass me the saltines? I feel queasy.