Three Tips For Buying A Better Used Car

First, do your homework. Read consumer magazines and price guides. This will help you decide what features you want, what specific cars fit your needs and what price range to expect.
Second, use an evaluation sheet to keep track of the cars you check out. Jot down what your inspection of each auto reveals. It will come in handy when comparing the pros and cons.
Finally, never, ever buy a used car (or a new one either) on impulse. There are many places to shop for a used car, don't just stop at the first one.

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...Buying a Used Car"

Forrest Gump's mama's line, "life is like a box of chocolates; you never know what you're going to get," could apply to used car shoppers. Unless you poke through the bottom of the candy, you may wind up with a yucky cream instead of a delicious caramel.

Most teenagers' dream of a used car that's not too pricey, runs well and looks sharp, with an emphasis on "sharp". Unfortunately, these three characteristics are not always found in the same vehicle. That means it's your job to "poke through the candy" and find out what's inside.

If your car knowledge is limited, find a mechanic or friend who is wise in the ways of vehicles. Ask or pay him/her to accompany you to the car lot. Have these key items checked before you plunk down your life savings.

FLUIDS - Most cars have over ten fluids. The important ones to check are the engine coolant, oil, transmission, power-steering, and brake fluids. Contaminants or low fluids can be your clue that the car has been poorly maintained.

ACCIDENT ALERT - Problems in the following areas may indicate a previous accident: bent or welded frame; doors, hood and trunk that have gaps or do not close properly; paint color is not uniform; ripples in the metal. You'll have to get it on a lift for a full inspection, but it's worth the trouble.

STEERING AND SUSPENSION - Too much play in the steering may mean worn parts; that's bad and usually expensive news. A car's suspension system refers to its shocks and/or struts. If this system (aptly named because it literally "suspends" your car over its four tires) is in bad shape, you could lose the ability to steer over rough terrain, making your ride dangerous and bumpy. Your car expert friend will use the "bounce test" to check it out.

EXHAUST - That hot-rod noise may sound cool, but it could mean a leak in one of several places. If this leak is in the catalytic converter, you could possibly fail a motor-vehicle inspection.

BELTS AND HOSES - Worn belts and hoses can be good indicators of how the previous owner(s) maintained the car. If these items are in bad shape, beware.

ENGINE AND TRANSMISSION - Because the engine powers the car and the transmission "transmits" this power to the wheels, these two systems are important players. Check them both visually and with a test drive. The car should run quietly and smoothly. If it is a manual, the gears should shift easily.

BRAKEs - While your dream car is up on the lift, make sure the brake system is examined. This involves removing a couple of wheels. Look at the pads, shoes, rotors, drums and hydraulic parts.

TIRES - Check the tread on all five (the spare makes five) tires. Worn treads mean you'll soon be investing in new tires. Treads that have worn unevenly indicate poor alignment.

Resist the urge to follow your heart with your wallet until you know the car inside and out. As time goes by you'll be glad you "poked your finger through the chocolate" and found out what was in the center.

Fixing Up That Ailing Car or Replace?

This May Help You Make A Decision

The new models are out, and many of us look longingly at the variety of sleek, new vehicles in dealers' showrooms. Meanwhile, "Old Faithful" sits at home in the driveway. She's in need of new tires, a brake job and some fresh paint, but she's paid for. And so the dilemma begins.

When an aging car needs repairs, too often the solution lies in the quickest route to the car dealer. But what if the down payment (plus a little extra) were spent on your old car instead, making it serviceable for another year or two? Statistics show that more owners are fixing up and driving their old cars. In fact, the average car age (9 years) is the highest it's been since the early 1950's.

To renew or replace? It's a big decision with several pros and cons to consider. Here are some points in favor of renewing:

No big car payments and, therefore, an opportunity to save for a future new car purchase;
Less sales tax to pay;
Savings on insurance premiums;
A new car loses an average of 25% of its value when it leaves the lot; 40% of its value in four years;
You know your old car's problems and quirks;
Your old car will be in better shape for future trade.

Of course in every financial endeavor there is a point of diminishing return. Trading cars is no different. If the cost of the combined repairs far exceeds the value of your old car, chances are you should trade up. Consider the following points that favor replacing.

Has your life-style (family size, business, recreational interests) changed so that "Old Faithful", even fully restored would no longer fit your needs?
If you have neglected maintenance and repairs too long your car may need major mechanical work. For example, overhauling both the engine and transmission on a typical car may cost $2,000. If this price exceeds the value of your car, it's probably time for a new or newer vehicle.
Even if the mechanical systems can be restored for a reasonable price, will body and/or interior fix-up work be costly?
How important are state-of-the-art safety and fuel economy features of a newer vehicle? How vital is the "image" created by the vehicle parked in your driveway?

EXCLUSIVE REPORTS

Critics slam auto-repair shops

Sterling Autobody Centers, owned by Allstate Insurance subsidiary, ripped for conflict of interest by Carona, Walne

David Wethe

Staff Writer

GREATER METROPLEX — Sterling Autobody Centers didn't expect much attention when it put up five new repair shops here since June.

Was it ever wrong.

Sterling's rapid expansion has served as a lightning rod in a brewing battle pitting auto-body shop owners against insurance companies over business rights and consumer protection.

The flap could wind up in the 2003 Texas Legislature and eventually have national implications.

Citing similarities to problems in the managed health-care industry, a growing number of critics, including a Dallas state senator and competing body-shop owners, are claiming a conflict of interest between a subsidiary of The Allstate Corp. that owns Sterling and Sterling's nationwide chain of 49 body shops.

Allstate Non-insurance Holdings Inc., a subsidiary of Northbrook, Ill.-based Allstate, bought the chain of what was then 35 shops in May 2001 for an undisclosed amount. Since then, Sterling has revved its engine of growth, buying two more existing stores and building 12 new shops around the country.

And, Sterling officials say, they're not finished yet. The Massachusetts-based company plans to add another 130 shops around the country over the next three years. Texas is Sterling's largest market, with a total of 13 shops in Dallas-Fort Worth and the Houston area.

The problem with the Allstate-Sterling arrangement, critics claim, is that the consumer loses representation in the repair process because the body shop must answer to its affiliated insurance company, which always aims to keep repair costs low. For work done at a body shop not tied to an insurance company, the critics say, the two sides sometimes disagree on costs, a process that can result in higher-quality repairs.

Sterling's sixth and newest location here, which is expected to open in Lewisville Dec. 23, will be the last new store to open locally through the end of 2003, said Sharon Mazanec, director of Sterling's Metroplex region. The new local stores represent a total investment of $15 million and about 100 new jobs.

Allstate spokesman Bill Mellander said the nationwide expansion was possible because of Allstate's investment last year.

In addition, "Allstate is not repairing a car," Mellander said. "Sterling, though owned by Allstate, operates with an incredible sense of autonomy. They are an independent business unit. They make the decisions on the repair of the automobile."

But State Sen. John J. Carona, R-Dallas, wants to end the ownership arrangement.

Carona said he's planning to introduce a bill in Austin that would force insurance companies to divest any financial interest in body shops by 2006. The measure also would prevent any new alliances between insurers and body shops.

"I understand that other major insurers are taking a careful look at what success financially Allstate should have in this investment, as well as what resistance they face, if any, from consumers," Carona said. "It's my job to make certain that they see considerable resistance so that this type of business activity does not continue to spread."

California State Sen. Jackie Speier authored a similar bill in August that was passed by the California Senate, only to die in the Assembly.

No guarantees

Insurance-company ties to body shops have been a sensitive issue among competing body-shop owners around the country ever since Allstate bought Sterling last year.

And, Allstate is not the only insurance company with financial ties to the collision-repair business. Zurich Financial Services Group, which owns Farmers Insurance Group, has a 26% minority investment in a California-based repair chain called Caliber Collision Centers.

Farmers is not as much a concern as Allstate because Farmers controls a smaller share of the insured automobile market, said Jim Ponder, director of collision repair for the Vandergriff auto dealerships in Arlington.

"You're talking about a big piece of the pie with Allstate, and a smaller piece with Farmers," he said.

According to the Texas Insurance Department, State Farm dominated the state's $6.4 billion auto-insurance industry last year with 30.2% of the market. Allstate had a 17.9% share, while Farmers had 15.2%.

The $28 billion auto-repair industry consists of about 53,000 shops nationwide, said Karen Kilbane, editor of Collision Repair Industry INSIGHT, a national monthly newsletter.

Many body-shop owners admit their industry does not present a united front. But that could soon change, said Alan Walne, a Dallas city councilman and chairman of a group that owns a controlling interest in a chain of auto-repair shops called Herb's Paint and Body.

"I think this is one of those solidifying factors," Walne said. "We are together on this one. I think you're going to see this as a national trend of shops coming together."

Mellander of Allstate, meanwhile, calls Carona's potential legislation "anti-business" and "anti-investment."

"We believe this is a 21st-century business initiative," Mellander said. "This is a partnership that eliminates redundancies between the auto-body repair shop and the insurance company. It allows Allstate to not just hand the customer a check, but it allows Allstate to be actively involved in the complete claims/repair process."

Although 98% of Sterling's business in the Metroplex comes from Allstate, Mazanec said her company is still not guaranteed to get the business.

"There's a lot of misconceptions out there," she said. "If we don't deliver a quality product, if we're not timely, then people will not choose us."

In June, Sterling opened a shop at State Highway 183 and O'Connor Boulevard in Irving, across the street from Westway Ford's body shop.

Soon after that opening, Westway's body-shop manager, George Herron, said he had to convince an Allstate customer not to tow his damaged car across the street to Sterling.

Recently, Allstate appraisers began working at Sterling shops. Now Herron is concerned he'll never get a chance to sell his services.

The Texas Insurance Code prohibits insurance companies from forcing their customers to select a particular body shop for repair. They are, however, allowed to promote one or several preferred body shops, as long as the insurance company does not receive a benefit for the referral.

"What scares me is if we don't get some legislation, what insurance company is going to be next?" Vandergriff's Ponder wondered. "Are we going to open the door for every insurance company to own its own shop? Is Allstate going to buy the hospital, and is Allstate going to hire the doctors that are going to treat you?

"Golly, we're just opening up Pandora's box."

Contact DBJ writer David Wethe at dwethe@bizjournals.com or (817) 693-0025.

A Future For Women As Automotive Professionals

The demand for qualified automotive technicians to service more sophisticated vehicle technologies is increasing. Estimates suggest a current shortage of roughly 60,000 technicians nationwide, growing by 20,000 each year. If these estimates hold true, the industry could face a serious shortage of qualified technicians. One effort underway to combat this potential gap is the formation of an industry association that would organize around attracting and retaining women in the auto service profession. Women currently working in the industry are identifying other women throughout the nation to explore the possibilities of forming such an association.

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