Used Cars Buyer Role Last week you repaired your fading yellow 1995 Jeep for the last time. The $300 repair really made you mad, and it made you late for work again. You question if it's worth it to chase good money after bad. More importantly, your boss has issued your last warning about your arriving late. Face it- you need more reliable transportation. You could take the bus to work; however, changing job sites every few months at work would mean learning new bus routes all the time. Besides, you hate the bus. Therefore, you have decided to replace your vehicle with something more reliable, preferably in the next few days. You have $10,000 in savings. You have saved your money for a summer trip backpacking around Europe, which you estimate to cost you abOut $5,000. Also, you are trying (sort of) to save money for a down payment on a house someday. You want to keep some money in savings for emergencies. However, perhaps your transportation situation qualies as an emergency. You have decided that you prefer not to spend more than $4,000 on a vehicle, but that $5,000 is your upper most limit (you don't want to change your Europe plans or incur more debt). Since you abhor the idea of paying for a brand new car, you want to buy a used car. Your good friend, Tom (who has nagged you for a couple years to dump the Jeep, in which he fears for his life as a passenger), recommended Neptune sedans. According to Consumer Reports, Neptunes have good reliability records. You have seen a few listed on Craigslist for around $4,000-$5 ,000. However, because Neptune is a new car company, the few used models you have seen listed are the 2003's. The "blue book"* value of a 2003 Neptune sedan with 50,000 miles is $4,600, assuming no mechanical problems. For every 5,000 miles above or below 50,000, subtract or add $100 to the "blue book" value. Note that the state where yen reside has no sales tax and licensing fees are negligible. You are considering purchasing one of two 2003 Neptune sedans. Car #1: You got a rm offer from a person way over on the other side of town on her Neptune for $4,450. You had a mechanic check out her Neptune (not .Tim Eazer's assistant!), and the mechanic found no problems. It has 45,000 miles. Thus, her offer is below "blue book" value. However, the car has a tan color, and you dislike earth tones. You must give her a decision by the end of the day. Car #2: You have arrived at the lot of \"Sal's Amazingly Low Priced Not-SoUsed Cars." You have seen Sal on television, screaming that he must be "crazy" to give customers such great deals. You'll see. Sal has a 2003 Neptune sedan, in a sporty teal, with 55,000 miles on it. On the windshield in huge soapy letters is written "Just $4,995!!" You test drove it, which included a visit to your mechanic, who said the car was free of mechanical problems. You are now returning from the test drive to visit Sal's salesperson to negotiate price. You have not told the salesperson anything about Car #1. By the way, you promised the Jeep to your little sister; so. you cannot negotiate a trade-in. * The "Blue Book" is an independent guide of the objective market value of all automobiles. The Blue Book value reported here is the retail value, not the wholesale value
