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How to Avoid Buying a Lemon Car: The Complete Guide

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Lemon Car
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Dealing with a lemon car — a vehicle that has problems right after you buy or lease it — can leave a sour taste in your mouth and make you bitter from the buying process. Depending on the state in which you live, its laws may or may not provide much protection, so it’s best to avoid buying a lemon vehicle in the first place. Here’s how.

Request a vehicle history report and other key info

While you don’t have to follow all of these steps to avoid buying a lemon car, they’re good to know.

Read online reviews. If you don’t already have a certain car — or cars — in mind, reading as much as you can about the pros and cons of different types of vehicles may help you narrow down a wide field of new and used cars. Ask yourself these five questions. Then, pick out a few to research, checking on any sales, deals or incentives in your area.

Search by the exact year, make and model — 2015 Toyota Camry, for example — and the word “reviews” for posts from current or former owners. You could also look up the car on sites such as Kelley Blue Book and Edmunds, which have in-depth expert reviews and consumer reviews, as well as overall government safety scores.

Does the car have any recalls? You can check a car’s recall status and history for free.

A recall is when an automaker or the National Highway Traffic Safety Administration determines there is something wrong with a car and owners may have the problem fixed free of charge (the automaker pays for it). Several recalls on a young vehicle may be a warning sign that the car will continue to have problems.

Ask for a vehicle history report. If a car is used, it should have a vehicle history report. Many dealers and online car-buying sites such as Carvana provide one for free. You could obtain your own vehicle history report through such sites as Carfax for a fee. Here is what you should look for in a vehicle history report:

  • Regular servicing. A car with standard oil should have an oil change about every 5,000 miles. A car with synthetic oil should have an oil change every 7,000 miles.
  • Minor or no accidents. Any accident reported to the police should be on the vehicle history report. If any accident is listed as major or as causing frame damage to the car, that’s a red flag.
  • Few owners. If the car had several owners in a short amount of time, such as three owners in two years, that may be a sign the vehicle has problems that are so expensive to fix, the owners sell it rather than fix it.

Looking for auto financing? Check out these top picks for the best auto loans in 2019.

Look for warning signs in the exterior and interior

Here are ways you can check to see if the car has any leaks, been in an unreported accident and that its equipment works. You may not need to do all of this if you are looking at a new car, but these steps may be especially helpful if you’re buying a used car from a private party.

The exterior. Run your hands along the car to search for any signs of an accident that may not have been reported: dents, bumps, different colors of paint, and irregularly-spaced gaps. Things that may be hard to see may be easier to feel, so don’t be afraid to touch the car.

  • Engine frame. Pop the hood and look at the beams between the engine and the painted body of the car. There should be no kinks or wrinkles in them. If there are, the car may have been in a front-end crash.
  • Spare tire well. If the vehicle has a spare tire compartment in the trunk or cargo area, take a peek to see that there are also no asymmetries or other signs of damage in the frame of the compartment. If there are, the car may have been in a rear-end crash.
  • Gaps and seams. Run a finger along the gaps where the doors, hood and trunk top, if there is one, meet the body of the car. If the gaps change in size noticeably from one end to the other, the door may have been re-hung, meaning it may have been in an accident.
  • The tires. A big giveaway that the suspension is bad is when the tires have uneven wear. Look at the flat part of the tire where the tread is. If one part is almost bald compared with the other parts, the suspension may be off. The tread should be an even depth across the tire — you could check it by inserting a penny in the tread at different points.

The interior. When you’re sitting in the car, you can pick up a lot of clues about the vehicle’s health by paying attention and doing the following:

  • Take a deep breath. If you smell rust, mold or mildew, don’t buy it.
  • Wiggle in the seat. Does the seat sag or complain? That can be a sign of wear and tear.
  • Look for missing pieces. Are there any knobs or switches missing?
  • Lightly stomp on the floorboard. Is it firm or does it feel shaky?
  • Check the seat belts. Are they frayed or have friction burns?
  • Turn everything on. Does the AC work? The heat? Check the windshield wipers, the lights, the radio, the locks, the heated seats – if they’re a feature – and everything else.

Invest in a vehicle code reader. A vehicle code reader plugs into a car’s computer system, unlocking information about possible problems. You could buy a code reader yourself (they are available for under $20 online), or ask a mechanic or auto supply store to run a diagnostic scan for you. Car part stores often do it as a free service.

If the code reader turns up problem spots, that may be a reason to pass on the car or negotiate a lower price with the seller.

The engine
Perhaps the most important part of the car is the part that makes it go. If you are looking at a used car, this section may be especially important for you.

  • Oil. The engine oil should be dark black and feel smooth when you rub it between your fingers. It should reach the “fill line” on the dipstick. It should not be a light color or feel gritty.
  • Transmission fluid. The transmission fluid should be bright red, not reddish brown or a darker color. It should not smell burnt or have anything floating in it.
  • Belts. The engine belts should be flexible, not stiff or frayed.
  • Exhaust. The exhaust coming out of the back of the car should be clear and not smell of anything. Blue, white, gray or black smoke means trouble. Some water condensation is normal.

For a more in-depth guide, check out our used car buying checklist.

See an independent mechanic

If the car passes the tests that you perform, consider getting an independent mechanic to check it out even further. They should be able to tell you whether the car will last another 100,000 miles or if it’s about to have an expensive problem.

Take it for a test drive

This is time to drive it like you stole it. Well, not really, but do put the car through its paces on the test drive.

1. Listen when you test drive the car. Squeaks or squeals when you go over a speed bump or pothole point to bad suspension. Pinging or knocking noises point to a bad engine. Grinding and whining noises point to a bad transmission. A lot of wind noise when you go faster may mean the car cabin isn’t water-tight.

2. Observe how smooth the ride is. Do you bounce up and down in the car at the slightest bump? Do you feel every turn sharply even when it’s a smooth curve?

3. Drive it hard. The purpose of a test drive isn’t to take a leisurely cruise, but to test the car. Accelerate hard, brake hard, turn left and right sharply.

What to do if you think you bought a lemon car

The first two things to do if you think you bought a lemon is to talk to the seller and to look up your state’s lemon car laws — the Better Business Bureau tracks them here. An agreement with the seller is probably preferable to going to court and it may be that the seller covers all or part of the repair cost or accepts the car as a return. At the same time, it is important to know what your rights are in your state. You should be aware that some state lemon laws only cover new cars while others don’t cover leased vehicles.

The bottom line

Do your research. Don’t be afraid to check everything, ask questions and test drive a car, maybe more than once. Strongly consider getting a professional mechanic to check it out. Doing these things will make your chance of buying a lemon drop sharply, which may make life a little sweeter.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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Chase Auto Loan Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Chase auto loan review
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Going into a dealership without knowing what auto loan you qualify for can be a dangerous adventure for your wallet. It’s best to have a couple auto loan preapprovals in your back pocket so the dealership can’t take advantage by charging you a higher APR. To help you research which lenders offer best rates, we did some work for you. Here, we’ll review auto loans by JPMorgan Chase & Co: the company, its rates, its pros and cons, how to apply and who may be a best fit.

About Chase

The largest bank in the U.S. with more than $2 trillion in assets, Chase offers everything from mortgages to credit cards.

Chase offers auto loans in all 50 states and D.C. with terms from 36 to 72 months. It also offers the car-buying service TrueCar at no extra charge. This service lets you see what others have paid for the same or similar cars, and has a network of TrueCar-certified dealers which compete for your business with clearly posted car prices.

Chase financing: At a glance

A Chase auto loan could be an option for you, whether you’re looking at a new or used car from a dealership. The bank may also refinance your existing auto loan or help you buy your car at the end of its lease period.

Though Chase declined to share its APR range, “Chase Auto offers competitive rates based on [a] customer’s credit history and the structure of the loan,” said Shannon O’Reilly, a communications executive with Chase, specializing in auto finance. You may be able to get an idea for what rate you might receive by using Chase’s Auto Loan Calculator.

Chase loan rate example

We used the Auto Loan Calculator to compare APRs for a new 2018 Honda in Michigan.

Credit scoreAPRMonthly payment
Excellent4.49%$365
Very good5.04%$371
Good6.84%$390
Fair15.09%$487
APR and monthly payment are for a 72-month loan of $23,000. Rates vary by location. Rates as of 1/7/19.

Are you an existing Chase customer? Chase offers a 0.25% rate discount for Chase checking customers interested in refinancing an existing auto loan. To qualify, you’ll need to have a Chase checking account before you apply for a Chase auto loan, and elect to have your monthly car payment automatically deducted from your Chase account.

A closer look at Chase auto loans

Here are the strengths and weakness we found looking at Chase auto loans. Be sure to compare any auto loan offers you may get from Chase with offers from other lenders.

Highlights of Chase auto loans

  • Credit decisions are usually made within three hours; three days is the maximum time to receive a decision.
  • There is no application fee.
  • Chase ranks in the top half of JD Power’s 2018 U.S. Consumer Financing Satisfaction Study for auto loans.

Lowlights of Chase auto loans

  • Chase doesn’t offer coupon books for you to keep track of your payments.
  • You may not be able to get a loan with Chase if you have poor credit.
  • Chase doesn’t offer auto loans for cars bought in private sales.

How to apply for a Chase auto loan

To apply, you’ll need to go to Chase’s website, call Chase or go in person to a Chase branch.

Whichever way you decide to apply, you’ll have to provide your personal information (e.g. name, date of birth, address, phone number, email, Social Security number), employment and income, the car you want, the loan amount and loan term you want.

You could apply by yourself or with a co-applicant. And if you need to change the car, loan amount or loan term once you’ve begun the application process, you could simply call Chase. Still, keep in mind that any changes you make could result in changes to your APR and other facets of the auto loan offer.

The fine print

To qualify for a Chase auto loan, you need to be at least 18 years old (in Alabama, 18-year-olds have to meet specific state requirements). Chase doesn’t finance all makes and models of cars: some lenders are reluctant to finance a car that is older than 10 years, has more than 100,000 miles or has a salvage title; Chase says it reviews any unique circumstances on a case-by-case basis.

Any offer Chase provides is good for 30 days. If you decide after 30 days that you would like to get an auto loan through Chase, you’ll need to apply again.

Who is Chase best for?

Chase loans are best for existing Chase customers. If you aren’t already a Chase customer, you may be able to quickly become one and receive the 0.25% rate discount on your auto loan. The convenience of having everything in one account, especially if you’re already a Chase customer, is alluring.

It also doesn’t hurt your credit to apply to multiple lenders within a 14-day window anymore than it would to apply to one lender — plus, shopping around for a car loan is one of the smartest things you can do.

So, if you think Chase may be a good fit for you, apply to Chase and compare the offer you may get with responses from other lenders. Potential lenders include your bank, credit union and online lender. And at LendingTree you could fill out an online form and receive up to five potential auto loan offers. LendingTree is the parent company of MagnifyMoney.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jenn Jones
Jenn Jones |

Jenn Jones is a writer at MagnifyMoney. You can email Jenn at [email protected]

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RV Buying Tips: Get the RV of Your Dreams

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

RV buying tips
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Ever dream of buying an RV? You’re not alone — about 10 million households in the United States already own an RV.“The popularity of RVing is at an all-time high because of the freedom and flexibility RVs offer,” said Kevin Broom, director of media relations at the RV Industry Association (RVIA). “With the same RV, people can take an array of trips, spend time having adventures with friends and family and form memories that will last a lifetime.”

When shopping for a unit, you’ll need to consider what type of RV suits your needs, how much time you plan to spend in the RV, whether you want to buy a new or used unit (or lease an RV) and how you plan to pay for it. This article will explain the costs of owning an RV, as well as how you can get your best price.

The costs of an RV

RVs have a huge range of prices, which vary depending on size, style and other factors, said Broom. As of the date of publishing, here are some estimates for a variety of new RVs, according to the RVIA:

  • Folding camping trailers: $6,000 to $22,000
  • Truck campers: $6,000 to $55,000
  • Conventional travel trailers: $8,000 to $95,000
  • Fifth wheel trailers: $18,000 to $160,000
  • Type B and C motorhomes: $60,000 to $150,000
  • Type A motorhomes: $60,000 to $500,0000

You may be able to save some money by opting for a pre-owned RV instead of a new one, added Julie Bennett, who, along with her husband Marc Bennett, authored the book “Living the RV Life: Your Ultimate Guide to Life on the Road,” and run the RV Success School.

“We have met people who spent less than $5,000 on their RV, and others who spent over $1 million,” said Marc Bennett. “Most of the people we have met that do extended travel in their RVs typically spend between $50,000 and $150,000 on their RV setup, which includes the cost of the truck and trailer, or a motorhome plus the vehicle that they tow.”

You generally don’t need a special license to drive or tow an RV, said Broom, but it’s not a bad idea to look into the laws in your state, especially if you’re buying a very large trailer or motorhome.

The RV, as well as the truck and trailer if the RV needs to be towed, is just one of the costs to consider. You’ll also need to budget for maintenance and repairs, taxes, insurance, vehicle registration, fuel and storage. These expenses can vary from state to state.

There are also an array of optional (though potentially desirable) add-ons, like roadside assistance and extended warranties, that can increase the bottom-line costs of RV ownership.

“RV dealers will try to upsell you on things like paint protection and other options you may not really need,” said Marc Bennett. “You’d be surprised how much all of this can add up, so do your homework in advance and know what you are getting yourself into before committing.”

What kind of RV should you buy?

One of the first things to consider when figuring out which type of RV you should buy is how often you intend to use it.

“If you only plan on RVing a few weeks a year for short vacations, it really doesn’t make sense to spend a whole lot,” said Julie Bennett. “If you’re planning on using your RV for extended travel or even live in it full-time, then it’s easier to justify a bigger investment.”

Here are some other questions you should ask yourself when shopping for an RV:

  • Who will be traveling in the RV? A couple of retirees who are OK roughing it on the road might opt for a travel trailer, while a large family with pets may be better off with a camper van or motorhome.
  • Where do you plan to take the RV? Julie Bennett suggests that potential RV owners think about whether they want to stay in campgrounds with hookups for electricity, water and sewage, or camp off-grid in more remote places, and find an RV that fits those needs.
  • Do you need a special license for the RV? Large trailers or motorhomes may require a special license in certain states, said Broom.
  • What “toys” are you bringing in your RV? You may need to splurge on a larger RV or motorhome if you plan to take bikes, ATVs, kayaks and other recreational gear on your adventures.
  • Does the RV have a floor plan and layout that makes sense for you? “Pay attention to the things you will use most often,” advised Julie Bennett. “Is there sufficient counter space in the kitchen for making meals? Can you fit inside the shower and wash your hair?”
  • How far will you take the RV? If you want to keep costs in check on long-haul trips, you might need to pay more attention to things like the weight and aerodynamics of the RV. You should also consider whether you want a diesel or a gas engine. Gas engines generally don’t get as much power or as efficient mileage as their diesel counterparts, but they tend to be less expensive.

Should you buy a new or used RV?

Every future RV owner is faced with one big question: Should you buy a new or a used RV? Here are some pros and cons to consider.

Pros and cons of buying a new RV

Pros

  • You know the history of the RV. Buying a new RV means you don’t have to worry that a previous owner cut corners on care and maintenance.
  • You can personalize the RV. “Some may like that they can choose their floor plan, layout, decor, color scheme and options, and some may want the latest technologies,” said Marc Bennett.
  • You can avoid potential allergens. Does your child have a severe peanut allergy? There’s no guarantee a used RV doesn’t contain peanut residue from a previous owner, so you might be safer buying a new one.

Cons

  • You’ll probably pay more. “Not only will you pay more for new, you will also see the sharpest dip in depreciation as soon as you drive it off the lot,” said Marc Bennett.
  • You still may need to make repairs. Just because you’re buying a new RV doesn’t mean it will be trouble-free. “RVs are very complex, and built by hand in relatively low-tech facilities,” he added. “Once new RVs leave the dealer’s lot, they tend to need more repairs and fixes — much like a punch list on a new house build.”

Pros and cons of buying a used RV

Pros

  • You’ll probably save money. The older an RV is, the more of an effect depreciation will have on its price tag, said Julie Bennett.
  • It’s already broken in. The problems associated with a brand new RV may have already been taken care of by a previous owner, which could save you time and money on repairs.
  • It might come with extras. People often include extra items when selling their RVs, said Julie Bennett. You may luck out with an upgraded suspension, RV gadgets or kitchenware at no additional cost.

Cons

  • It comes with risks. If the previous owner didn’t maintain an RV properly, it may need new parts or repairs.
  • You may need to renovate it. If an RV’s aesthetics are dated or simply unappealing, it’s on you to fix it up.
  • It probably won’t have a factory warranty. You may need to shell out for repairs right away before you can drive the RV, said Julie Bennett.

Where can you buy an RV?

There are a variety of places to buy an RV — and according to Marc Bennett, you may need to travel far to find the right one at the right price: “We traveled thousands of miles when buying our first RV. Opening up geographically allows for much more selection,” he said.

Here are some of the places you can start your search for an RV:

  • New RV dealerships: Looking to buy a new RV right off the lot? Then shopping at a new RV dealership might make the most sense. “Buying from a respected dealership might provide some peace of mind that they have checked the unit and it is ready to go,” said Marc Bennett.
  • Used RV dealerships: Used RV dealers might not know as much about the history of a particular unit as its original owner. However, you may be able to purchase an extended warranty for some added protection.
  • RV shows: RV shows offer the opportunity to see a wide variety of models in one place. Should you find the unit of your dreams at an RV show, you may be able to score special discounts.
  • Private sales: Buying a used RV directly from its owner allows you to learn more about its history, maintenance and unique quirks, said Marc Bennett. “An owner will be able to share much more detailed information about the specific RV than a dealership,” he added.
  • Online marketplace: Do you already know exactly what you’re looking for in an RV? An online marketplace could help you find it quickly. RVTrader.com and Craigslist are popular places to find private RV sales online, said Broom.

How do you get your best price on an RV?

The price tag on an RV can give you serious sticker shock. Luckily, there’s lots of room for negotiation, and you should not plan to pay the asking price, noted Marc Bennett.

“There’s no hard and fast rule about how much discount you can get on an MSRP [manufacturer suggested retail price],” he said, “but it is not uncommon to buy a new RV for 15% to 30% off the MSRP.”

Going into the negotiation armed with knowledge can help you get your best price on RV, added Julie Bennett.

“Get a few price comparisons on the RV you want to buy,” she said. “Know what questions to ask, know [what’s] a fair price for the RV you want, and keep an eye out for deals at certain times of year,” also noting that you may be able to get the best price when a dealer is clearing out old models to make room for new units.

If you can’t afford to pay cash, you may be able to take out an RV loan or secure other financing to make the purchase. Here are some ways to finance your RV:

  • Dealership financing: Dealerships may offer financing through lending partners (such as a bank or credit union), or offer in-house financing. This is convenient, as you can get your RV and your loan all in one place. However, dealers may use this type of financing to bolster their bottom line, so if the rate offered isn’t competitive, you might find a better offer somewhere else. Additionally, dealership in-house financing, which is usually offered to people struggling to find financing elsewhere, can carry high interest rates.
  • Banks, online lenders and credit unions: You may be able to secure an RV loan from an online lender, credit union, bank or other financial institution. Since dealers may not have partnerships with lenders you’re interested in, you may need to seek out quotes directly from the institutions themselves. Make sure to shop around to compare offers. Though credit unions may have lower rates, you’ll need to become a member.
  • HELOC or home equity loans: You may be able to use a home equity line of credit (HELOC) or a home equity loan to secure the funds for an RV. With both of these options, you’re borrowing a portion of your home equity. Keep in mind that you’re putting your home on the line with this type of financing, so make sure you’re on firm financial footing before moving forward. However, because the loan is backed by collateral, interest rates tend to be lower. With either option you’ll also need to pay closing costs, a process that can take several weeks or longer.

The bottom line

RVs offer the freedom to travel the country on your terms. Whether you dream of a life on the road or you’re just looking to spend a couple of weeks in the great outdoors every summer, you can get an RV to make it happen.

Remember: There’s no one-size-fits-all solution to finding or financing the RV of your dreams. Do your homework, know what you’re looking for and don’t be afraid to walk away from a bad deal. The right RV is out there waiting for you — and with enough legwork, you’ll find it.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Joni Sweet
Joni Sweet |

Joni Sweet is a writer at MagnifyMoney. You can email Joni here