Buying a Car
Authored By:
Montana Legal Services Association (MLSA)
Information
Research and Preparation
You might decide to buy a car for any number of reasons. Maybe you need it. Maybe you decide it's just time for a change. In any case, you shouldn't get scammed, and you have rights that help you along the way.
The best case scenario is that you have a little bit of time to buy a car. If you rush into getting a car, you'll probably end up paying more than you should. It's important to do as much research on the vehicle as you can.
There are a list of helpful websites at the bottom of this page that will give you approximate car prices and ratings. Try and take the time to look up these sites. It could end up saving you thousands.
Don't feel rushed by big banners that scream about incentives and one-time offers. There are always more offers when it comes to car sales. Instead, prepare a target vehicle and target price.
There are calculators online that will tell you just how much car you can afford. Write down those numbers and take them with you.
Making a Deal
Figure out which car you want to buy and how much you are willing to pay. Now it's time to make an offer and negotiate.
The salesman will haggle and try to wear you down, but don't lose site of the deal you originally had in mind. And stick to your budget!
Reading a Car Contract
The hardest part of buying a car is probably when you actually review and sign the contract.
You will face lots of different numbers when you finally get a car contract in front of you. Look for a box that says "Truth in Lending disclosures." This box is required by law and has some very important financial information, including:
- Annual Percentage Rate (APR) is what it costs you to get a loan for the car. The higher the percentage, the more you pay to buy a car.
- Finance Charge is how much you pay on top of the actual price of the car just to get a loan.
- Total sale price is the total of the payments with the rebates and down payment added in.
- Amount Financed is the amount of money you are borrowing. This can include document fees and additional costs on the contract.
- Total of Payments shows the actual cost of the car, not including your down payment or manufacturer's refunds.
Below that is a schedule that should state how many payments you will make and how much they will be.
Make sure to go over the "Itemization of the amount financed" with a fine-toothed comb. If any number there isn't explained, ASK WHAT IT IS. You have a right to know what you are paying for. If your doc fees are over $100, negotiate to lower them.
Online Car Buying Resources
Edmunds gives you an accurate idea of what a vehicle costs the dealer.
This website gives detailed information on dealer scams. It also helps you find what to look for in a target price.
The Kelley Blue Book gives you a good idea of what you might expect to get from a trade-in.
Below is a link to a few calculators. These help a lot when looking to purchase and finance a new or used car.
Montana Laws
While Montana does have a lemon law, there are restrictions. It does not cover:
- Used or pre-owned vehicles
- Vehicles purchased for business use
- Non-motorized and off-road vehicles
- "Residential" motor homes
- Defects resulting from accident, abuse, neglect, modification, or alteration by anyone other than the manufacturer or authorized dealer.
However, the law does apply to:
- Vehicles purchased, titled, or leased in Montana, if they are less than two years old and have 18,000 miles or less on the odometer.
- Substantial defects that impair the use, market value, or safety of the vehicle.
It is very important to hold on to documents that will help you file a case under the lemon law. Be sure to keep:
- all purchase (or lease) documents
- all maintenance records
- all repair orders
- receipt for maintenance supplies
- certified letter of notification to the manufacturer (copy)
- any and all other documents relating to the defect
Unlike some other states, Montana does not provide a car-buyer the option of a right to recession, also known as "buyer's remorse." Once you buy the car, you're generally stuck with it. So make an informed decision!
