
                         How Not to Buy a Used Car

                                    or

                    Let's Not Make a Deal (Like This One)

           _________________________________________________________

           NOTE: All  persons and places in  this story are entirely
           fictitious. Any  resemblance to actual  persons or places
           is entirely coincidental.

           There is  no intent to imply  that a large number  of car
           dealers use the tactics of Monty Vernon, or that small or
           independent dealers are more likely  to do so. But though
           the number  of occurrences is small,  the potential buyer
           should be aware that these things sometimes happen.
           _________________________________________________________


               So you're thinking of buying a used car, or pre-owned
           as  the  high  class  dealers   say.  Let  us  observe  a
           hypothetical  uninformed,  super-gullible  citizen  as he
           buys a car, and thereby learn what NOT to do. His name is
           Booby J. Dullard. You know Booby, the man who won the two
           hundred dollar waste basket on a TV game show...


               It's a  sunny spring day, Booby,  and your eight year
           old buggy is starting to  look a little rusty. New brakes
           will be needed soon. Maybe  even a muffler. So you decide
           to look  around the car  lots to get  an idea of  current
           prices  on later  models. You  pull up  to Monty Vernon's
           used car lot. There are prices on some of the windshields.

               What a shock! A 3-year-old  model costs more than you
           paid new for  your present bucket of bolts.  Well, if you
           can  do  without  power  steering  and  air conditioning,
           settle for  a 5-year-old model,  and get a  good trade-in
           allowance,  maybe you  can swing  a deal  without risking
           bankruptcy.

               As you are pondering this  and kicking the tires of a
           middle-aged 6 cylinder Typhoon GS,  a tall character in a
           wash-and-wear  suit  comes  crunching  across  the  white
           gravel.  "She's a  beauty, isn't  she," he  sighs, as  he
           pulls out a handkerchief and  flicks a speck of dust from
           the hood.

               "W-well," you stutter, "I'm just looking right now. I
           haven't really decided to buy anything just yet."

               "That's all  right, friend. I'm  Monty Vernon, and  I
           don't believe in high  pressure salesmanship. Just let me
           tell  you  about  this  cream  puff.  Then  if you're not
           interested I won't pressure you.

               "That sounds fair enough," you reply.

               Monty shakes your hand and  says, "I'm kind of new in
           this car business. I was studying to be a priest until my
           father  died, then  I had  to go  to work  to support  my
           mother. I borrowed the money to start this business a few
           years ago  and have been just  eking out a living  for me
           and Mom. But  I refuse to raise my  prices like the other
           dealers..."

               Eventually  Monty  gets  around  to  offering  you  a
           demonstration  ride in  the Typhoon.  When you're  in the
           driver's seat with Monty beside  you, you notice that the
           oil pressure light flickers red as you cruise along at 35
           mph. You mention this.

               "Don't give it a thought,"  says Monty. That's just a
           peculiarity of this model. They  all do it. Nothing wrong
           with the  engine, it's just that  the oil pressure sensor
           has  a weak  spring. Nothing  to worry  about unless  the
           light stays on.

               The exhaust  noise sounds a little  loud. You mention
           this. "That sounds like a Mellopurr Muffler. I'll have to
           check that. No extra charge if it is..."

               "Is this a one owner car," you ask.

               "Ah, One careful owner, you bet," says Monty.

               When  you get  back to  the lot,  you ask  to see the
           certificate of  title. "Gee, No  one has ever  asked that
           before. The titles are kept in my safe deposit box at the
           bank."

               You think  it over. The Typhoon  runs pretty good and
           it looks a  lot better than your old  bus. And Monty will
           give you wholesale  book for your trade. You  go into the
           office  and  Monty  goes  to  work  with  his  pencil and
           calculator.

               "Well, let's see now....the price  of your new car is
           4995.00 plus 100.00 closing costs..."

               "Excuse me," you say. "What are closing costs for?"

               "That's  to  cover  our  cost  of  handling the paper
           work," says Monty. "I only  charge a hundred. Most of the
           other dealers charge a hundred  and a quarter." You get a
           hollow feeling inside.

               "Now   then,  that's   4995.00  plus  100.00...that's
           5095.00  less  your  trade  of  495.00....that's 4600.00,
           times 6% state tax....that's $4876..."

               "Hold on," you say, "why  are you figuring tax on the
           closing costs?"

               "We always do it," says  Monty. "Now then, where were
           we? Oh, yes, the balance due  is 4876.00. Now I guess you
           want to finance for 36 months, right?"

               "Yes," you answer in a hoarse whisper.

               "Here it  is in the  financing book. Look  here, 4876
           for 36 months comes to exactly $ 176.27 per month."

               "What percent is that," you ask.

               "I'm giving  you our preferred  rate of 11  percent,"
           says  Monty.   "Now,  here's  your  copy   of  the  sales
           agreement. I'll  have the girl  type up the  final papers
           and you can  come back tomorrow to sign  and pick up your
           new car.  I'll have her  washed and shined  up pretty for
           you. The car, that is. Ha, ha."

               The next evening you drive to Monty's lot and there's
           the  Typhoon sitting  out front,  all shined  up just  as
           Monty promised. He takes you inside and introduces you to
           a young lady. "This is  Sally Jane, my accountant. She'll
           take care of  the paper work with you,  then I'll see you
           out front." He leaves.

               Sally Jane gives you a  big smile and proceeds to lay
           a half dozen legal-looking documents  in front of you for
           your signature,  pointing to each spot  to be signed. You
           know you should read each one, but you hate to keep Sally
           Jane waiting.

               When you  are done signing, Sally  Jane asks for your
           copy of  yesterday's agreement, then  starts folding your
           copies of  the documents just signed  and handing them to
           you. Something  catches your eye. The  final agreement is
           not stated  as simply as  the original. This  one is much
           more complicated.  And you notice  that the price  of the
           car is now 5475.00 instead of 4995.00.

               You mention this to Sally  Jane. She assures you this
           is  just  an  adjustment  for  their  books to more truly
           reflect their cost of the vehicle. After all, the payment
           hasn't gone up.  It is still $ 176.27  isn't it? You have
           to admit this is so.

               Out front,  as Monty hands  you the keys  to your new
           car, a  thought occurs to  you. "Pardon me,  Mr. Vernon,"
           you ask, "What kind of warranty do I have?"

               "I  thought  I  mentioned  to  you  earlier that this
           particular  car  was  being  sold  As  Is.  That means no
           warranty. That  way I kept  the price at  rock bottom for
           you."

               "Oh, well thank you."

               You climb into  the car, put the key  in the ignition
           and  turn it.  You hear  a faint  growl. Monty says, "The
           battery  is run  down from  sitting around  the lot. I'll
           give you a jump start."

               Ten minutes later  you drive off the lot  in your new
           car. You notice that the state inspection sticker expires
           next month,  the needle of  the gas gage  rests on empty,
           the  exhaust  seems  a  little  louder  and a little less
           mellow, and  the oil pressure  light seems to  be staying
           lit longer.  Hmmm. The odometer says  83,000 miles. Funny
           you  didn't notice  that before.  Your old  car only  had
           56,000  miles  on  it.  You   start  looking  for  a  gas
           station....

               Now then,  how many things did  Booby do wrong? Let's
           check them off.

               1.  Rule  number  one  for  any business transaction:
           Never   sign  any   paper  without   first  reading   and
           understanding it.  Trite but true.

               2. Without having done business previously with Monty
           or knowing anyone who has, he should have checked out the
           business with the local better business bureau, to see if
           they have received complaints from customers. Some states
           may have a consumer protection agency which will give you
           this information. My  state has such an agency  but I was
           told  when   I  called  that  they   will  not  give  out
           information about any business  unless they actually have
           an action at law in process against the business.

               3.  He  should  have  discussed  the  warranty before
           putting  any  money  down.  If  the  car  was sold with a
           warranty,  he  should  have  insisted  on  a  copy of the
           warranty agreement in writing.

               4. He should have been smart  enough not to buy a car
           with as ominous  a symptom as an oil  pressure light that
           flickers at cruising speed, which  is usually a sign of a
           badly worn engine.

               5.  Considering  the  dead  battery,  he  should have
           looked at  the battery and  tires to make  sure they were
           the same  ones that were on  the car the previous  day. A
           few unscrupulous dealers (and, to be fair, some customers
           on their trade-ins) have been  known to change them after
           the sale and before delivery.

               6. Finally...hold onto your hat...He was taken to the
           cleaners on the financing. The price increase of $ 480.00
           on  the  final  papers  confirms  it.  Sure,  the monthly
           payment didn't increase. It was  high enough to cover the
           higher price  in the first  place. Monty just  lied about
           the interest rate. With a  financed balance of $ 5,384.00
           (5475.00 +  100 - 495  x 1.06) and  a monthly payment  of
           176.27, the interest rate would be 11 percent, but with a
           balance of $ 4,876.00, and a monthly payment of $ 176.27,
           the interest rate is 18 percent. The page he showed Booby
           in  the  financing  book  was  the  18  percent page. The
           monthly payment on the  amount financed, 4,876.00, for 36
           months at  11 percent should have  been 159.63 instead of
           176.27.  Booby was  taken  for  an extra  599.00 dollars.
           Multiply  each  payment  out  for  36  months and see the
           difference. If you find this confusing, keep in mind that
           if  the monthly  payment remains  constant, the  interest
           rate goes down  as the amount of the  loan goes up. Monty
           just raised the price on  the contract until the interest
           rate  he  lied  about  (11%)  became  a fact. The monthly
           payment remained the same, and everything on the contract
           became legitimate.  Then, by taking back  Booby's copy of
           the original sales agreement and giving him a copy of the
           new one,  it would, hereafter, only  be Booby's word that
           the price was actually raised. This trick is used oftener
           than  you might  think, and  is fallen  for by people who
           should know better.


               Now that we have watched Booby J. Dullard stumble and
           bumble  his way  through the  purchase of  a used car, we
           feel thankful that we have  never been dumb enough to buy
           a car from  a con man  like Monty, or  to buy a  piece of
           junk like  the Typhoon, or  to fall for  the old interest
           switch trick. Right? Hey, why is everybody blushing?


                                    End

