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You’ve been bitten by the new car bug. Or perhaps you’re just so tired of your current car; you can hardly stand to drive it anymore.

You’re about to embark on the research phase of the car buying experience (which is the right course of action). But, before you even begin pointing, clicking, and eyeballing these shiny new toys; take a step back and determine just how much car you can afford to own and operate.

The conventional wisdom is not more than 20% of your monthly income your net (take home) pay not your gross pay. And by the way, while you’re doing your figuring on this 20% monthly cash outlay; make sure you include all the cars you own.

Regardless of whether you don’t even pay rent or own your home outright, stand firm on the 20% rule.

On your way to calculating your 20% budget, in addition to the purchase price, be sure to factor in any down payment and/or your trade-in value. The bottom line you’ll finance is the bottom line.

Of course, the more money you put down the more car you can buy and still be under the 20% rule. Keep in mind, the more money you put down doesn’t affect how much you actually pay and cars are severely depreciating assets not investments.

Once you get close to determining your 20% number, you’ll need to know the going interest rates you’ll be paying on your borrowed money. And since we’ve now broached borrowing money and interest rates you should also plan on getting a copy of your credit report while you’re at it.

Another important aspect to consider is the costs of ownership involved with the car. Things such as fuel, maintenance, and insurance premiums can run up some hefty numbers on you in addition to your monthly payment.

Maintenance and insurance costs are somewhat related, because insurance companies take into account the cost to repair a vehicle as part of their premium calculation. So, if you are looking at a car that is expensive or difficult to repair, you’re probably also looking at higher insurance premiums as well.

So, even though you should keep the 20% rule firmly in mind as your are crunching your numbers, don’t overlook all the other monthly expenses associated with the car you are considering.

Taking the time to get all of your financial and budget numbers in place before you seriously begin looking at your intended makes and models will serve as a good financial rudder for you during the car buying process and make for much wiser purchase.

Jeff Neilan’s car dealer experience offers insightful car buying tips that save you time and money. Be sure to visit http://www.acarbuyersguide.com for car financing tips, ownership costs, & more.

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What’s more exciting than driving off an auto dealer’s lot with a beautiful, brand new automobile, complete with that wonderful new car smell?

Well, how about the excitement of saving up to $10,000 on a new car? It’s possible. In fact, it’s easy, if you just define “new” as new for you but not necessarily brand new.

The best deals today by far are on cars coming off a two-year lease or “program” cars, that is, cars that have been part of a rental fleet.

Here’s a personal example. Two years ago, I decided it was time to find new wheels. I used a site called cars.com to search for the car I wanted — a Chrysler Sebring. I had chosen this car because I had rented one on a business trip and liked its looks, maneuverability and gas mileage.

Edmunds.com, another site I like, lists the price of a 2005 Chrysler Sebring as $19,595. I’m going to assume that in 2003, the price was slightly lower, let’s say $17,800.

I was patient and searched cars.com and a number of other sites for about three weeks. I finally found a beautiful, dark blue 2003 Sebring with 13,900 miles listed at $12,500. I drove to the dealer that day and eventually purchased the car for $11,800,

My Sebring was a program car and had been in service as a rental unit for about a year. However, I saved about $6,000 vs. a new 2003 Sebring on a car that had just 14,000 miles and more than two years left on a three-year bumper-to-bumper warranty. Plus, the car looked pretty close to brand new to me.

Naturally, you will save even more with more expensive vehicles.

For example, one dealer here in my city is advertising 2004 Buick LeSabres that had an original manufacturer’s list price of $28,495 for $14,981. This dealer also has 2005 Pontiac Bonnevilles with an original manufacturer’s list price of $28,586 for just $14,981.

Okay, I know that nobody pays the original manufacturer’s list price. So, for the sake of the example, let’s suppose these two cars actually sold for around $25,000. This means you would still save about $10,000 and that’s with no haggling.

Maybe there was a time when buying a used car didn’t make a lot of sense. But, given the price of new cars today, you are far ahead of the game to find the car you want that’s one or two years old. If that car has a year or two left on its bumper-to-bumper warranty and a 50,000 or 70,000 mile warranty on the drive train, you can hardly go wrong.

Shop carefully and you can probably even find the car of your dreams as a “certified” used car. Each car manufacturer defines certified a bit differently but here’s one example. A certified used car from a Ford dealer goes through a rigorous 115 point inspection, and comes with a 6-year, 75,000 mile limited power train warranty, a vehicle history report, 24-hour roadside assistance, and several other nice features. While you will pay a bit more for a certified vehicle, it does come with a bit more peace of mind.

Can you save $10,000 on your next car? It’s easy if you just remember that a one- or two-year old car is new to you.

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A popular scam that has victimized thousands of used-car sellers is one in which the proposed buyer usually claims to be from Africa, or another country, and is eager to buy the advertised car, sight unseen, for the full asking price - no haggling. After some complicated email exchanges with the “buyer,” the victim ends up with a worthless cashiers check or money order, a depleted bank account, and is still stuck with the car.

It’s a scam that is easy to spot when you know what to look for.

How does it work?

You advertise your used car for sale in a newspaper classified ad or on an “auto trader” website. Your car may be one that is in less-than-perfect condition and has high mileage such that it may be difficult to find a buyer. You are anxious to sell.

You are contacted by an interested buyer who wants your car and is willing to pay your price, without seeing or examining the car. He tells you that he lives/works in Africa (or other foreign location) and that he will arrange to have the car picked up by his “agent” and shipped to him. He may say that he’s in the U.S. and represents someone in another country, although his use of the English language is poor. He offers to send you a U.S. certified cashier’s check or bank check right away.

You receive the cashier’s check but the amount is more than the agreed-on price of the car. The reason that the check is in excess of your asking price is typically explained as a “mistake,” or that the check had already been cut before setting a price, or that the “extra” money is for “shipping expenses,” or any one of a number of other explanations all of which are false.

You deposit the perfectly official-looking check at your bank. The bank credits your account for the amount of the check, although the check has not actually cleared yet, and won’t be for at least 10 business days or more which your “buyer” knows.

Uh-oh! Something’s wrong

Meantime, the “buyer” contacts you again and reminds you that he sent you too much money, and reminds you to send him or his agent a money order or cashier’s check for the excess amount, which might be a few hundred or a few thousand dollars. You do it, because you are anxious to sell your car.

You withdraw the “excess” money from your bank account (the same account where you deposited the “buyer’s” cashier’s check) to send to him or his “agent.”

A day or so later, after you have already sent part of the money, the “buyer” may contact you again and may inform you that he (or his client) has changed his mind about purchasing your car, and asks you to send him the rest of the money. You do it. You withdraw more money from your bank account.

Now it gets worse

Your bank calls you a few days later and informs you that the cashier’s check from the buyer is counterfeit and is totally worthless. They debit your account for the full amount of the check.

The bank now wants you to make good on the checks you’ve written from your account that you sent to the “buyer” or his “agent.” Whatever money of your own that was originally in your account is now gone. Your bank wants you to pay them the rest of the money. The bank claims no responsibility in the matter. Your funds are not guaranteed under banking regulations.

You’re out of luck

You still have your used car but you now owe your bank a substantial amount of money. The bank has no sympathy for you and offers no help.

The “buyer” (scammer) was using a bogus name and can’t be located. There is no one to sue or prosecute. These are professional criminals who know how to disappear and pop up again somewhere else. Law enforcement agencies are helpless to act.

Unfortunately, this scenario is all too common. It happens to real people every day. Although this scam has been around for a few years, there are still many people who haven’t heard about it. We’re trying to help in that regard.

Bottom line

The details on this scam may vary, but the basic scheme is always the same: foreign “buyer” using poor English, bad spelling, bad cashier’s check for more than the asking price, followed by a request for refund or forwarding of some or all of the money before the check clears the bank.

Don’t get caught in this one. Many people have. If you are selling a used car and a buyer from a foreign country claims to want your car, sight unseen, for your full asking price, with some complicated scheme for payment that involves you sending money to someone else, then the chances of this being a scam are about 99.999999999%.

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Al Hearn is founder, owner, and operator of two popular automotive consumer web sites, Lease Guide and Used Car Advisor, which provide free auto buying, selling, leasing, and financing advice.

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