Is Car Flipping Worth It?

Flipping cars has been a side hustle for years as a way to make a little extra cash. But in an era of rising used car prices and online vehicle ordering, the game has changed — and the profits are much higher.

Here’s how car flipping works: A person orders an in-demand vehicle from the factory at a fixed price. When it arrives months later, the vehicle’s value rises; because of the current car market, it can be sold at a profit.

Yes, there are related fees — sales tax and registration — and it can be risky, as you can’t guarantee the price will increase after you have the car. But it’s become so popular that it’s caught the attention of carmakers, which are trying to clamp down on the practice.

For instance, the Ford F-150 Lightning, a truck that sold out before production started, comes with an agreement stating that the buyer won’t resell the truck for at least a year (this additional agreement is included at the dealer’s discretion), as reported by car news website Carscoops. And, GM will cancel the warranty on the popular Chevrolet Corvette Z06 if it’s resold in less than a year, according to auto site Jalopnik.

A modern way to buy new cars

The trend these days is for highly anticipated models to be ordered online and built to the buyer’s specifications. Buyers will have to put down a deposit, usually only a few hundred dollars, and they can decline the car later if they change their mind.

Electric cars and hot new models, such as the Corvette Z06 or Cadillac Escalade-V, are the prime target of flippers because the rollout is slow and inventories are limited.

Success stories

While some buy a car with the intention of reselling it, that’s not the case for all car buyers. Sometimes the idea of flipping a vehicle occurs to an owner because they see car prices climbing and figure, well, why not?

Kirk Dunn, a Long Beach, California, contractor took advantage of both kinds of flipping. He saw the value of his Chevrolet Silverado pickup increase so much he sold it to Carvana for a $3,500 profit. Over the following months, the market stayed hot, allowing him to purchase two new trucks, then flip them at a profit and enjoy driving newer and better models.

“I can’t even tell you how many hours I spent negotiating and researching,” he says. “But it was a game and kind of fun.”

Similarly, I was driving a 2014 Volkswagen Jetta SportWagen, which cost me $13,000 out the door. I had no intention of selling it — until I realized Carvana would give me $16,800 for it, even after I’d added 30,000 miles to the odometer.

Risky business

While the current car market is still hot, with electric vehicle prices rising five times faster than gas car prices, according to a study by iSeeCars, the fun might be coming to an end. In fact, used-car prices have begun to soften recently.

According to car research site Edmunds, the average transaction price for 3-year-old vehicles was $31,302 in July, a 4.6% decrease, or $1,526, compared to their peak of $32,828 in January.

“There’s a gamble that prices could settle down between when you buy it and when you flip it,” says Richard Arca, director of vehicle evaluation and analytics for Edmunds.

“This situation won’t last forever,” says Karl Brauer, iSeeCars executive analyst. “Time it poorly, and you’ll be stuck with that new car, or have to sell it for a loss.”

And then there’s the sales tax and registration fees that will cut into your profits. In California, for instance, those fees come to $5,745 for a $50,000 vehicle. That’s a big nut to crack.

Before you flip

Successfully flipping a car starts with having a good eye for the market so you can buy low and — hopefully — sell high.

Start by looking up the value of the car you want to flip in pricing guides such as Kelley Blue Book and Edmunds. Here are a few additional tips from the experts to help you decide whether flipping is worth the risk.

  • Get estimates from online car retailers, such as Carvana, Shift, Vroom and CarMax.
  • Estimate all fees and the cost of any work that has to be done to the car.
  • Look for a well-maintained model, with low miles and few owners, if you want to flip a used car.
  • Make sure there isn’t a penalty or restriction on selling the car you’re considering buying.
  • Consider whether the amount of money you’re expecting to make is worth your time and effort.

And finally, choose a car to flip that you wouldn’t mind owning in case the music suddenly stops and the market finally cools off.

Philip Reed writes for NerdWallet.

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Don’t Spend a Dollar to Save a Nickel on Gas

With the cost of gas soaring, it’s not uncommon to hear people say, “I’ve really got to buy a hybrid.”

If your goal is to save money, this could be a disastrous move unless you needed a new car anyway. While you might save money at the pump, the cost of prematurely switching from a gas hog to a fuel-sipper would take years to pay off.

Why? You’re probably paying about $1 a gallon more for gasoline than you did a year ago. In a 25-mpg vehicle driving the average yearly mileage of 14,000, that would be $560 out of your pocket — enough to hurt.

But the average price paid for new cars has risen by 10 times that amount in the last year alone, topping $46,000 in October, according to Kelley Blue Book. Proportionately, used car prices are up even more than that.

It’s about the worst time possible to buy any car unless you absolutely have to. If your vehicle has been stolen or totaled, by all means look at a more fuel-efficient replacement.

But if that’s not the case, remember that gas prices rise and fall quickly; there are ways you can adjust that don’t require the commitment of 72 monthly payments. Instead of switching cars, the key to savings is pretty simple: Buy gas wisely (using a gas price app), maintain your car, and improve your driving style.

Note that I didn’t say “drive more slowly.” It is possible to boost your fuel efficiency and not turn into an annoying tortoise on the highway.

Buying smarter and cheaper

Choose regular over premium. Begin your money-saving strategy by purchasing the right grade of gas. While your car’s owner’s manual might recommend that you run premium, you can safely switch to mid-grade or even regular. “The modest fuel economy improvements found in AAA tests do not offset the higher cost of premium gasoline,” the American Automobile Association reports.

Compare prices with a gas app. The price of gas varies significantly from one station to the next, and one part of town to another. Instead of driving around to find the best price on gas, use a gas app such as GasBuddy to find the cheapest place to fill up.

But don’t drive 10 miles across town to save a penny on gas. While a gas app will show you the cheapest gas in your area, make sure the savings can erase the extra fuel consumed getting to that cheaper station.

Use gas cards and shopping clubs. Some credit cards will give you a rebate when you buy gas. Combine this with the discounted price of gas at shopping clubs, such as Costco, and the savings is substantial.

Maintenance and modifications

Besides a modest increase in fuel economy, the following maintenance tips have added benefits. Your car will last longer and you will drive safer.

Perform scheduled maintenance. In most cases, this calls for oil and filter changes and tire rotations. You should also change your air filter periodically. It’s cheap and you can even do it yourself.

Monitor tire pressure. Keeping your tires filled to the manufacturer’s specifications will give you better fuel economy, reduce tire wear and provide better handling.

Remove underused accessories. Roof racks and special carriers cause an aerodynamic drag on the highway, which puts a dent in fuel economy, according to AAA. If you’re not using them, lose them.

Skip the gadgets. That miracle device that boosts gas mileage to 200 mpg? It doesn’t exist. Consumer Reports once tested three such fuel savers and found no change in fuel economy. In one case, there was actually reduced performance. Their takeaway: “The best way to get the best mileage from a tank of gas is to follow the vehicle manufacturer’s service schedule and fine-tune your driving habits.”

Fine-tune your driving

Fine-tuning your driving style, especially if you have a larger vehicle, can lead to big savings at the pump. Many benefits await you if you open your mind and try something new.

Avoid aggressive driving. The biggest gas waster is unnecessarily aggressive acceleration combined with sudden braking. Doing so can lower your gas mileage by up to 30%, according to Instead, accelerate moderately (unless you need to merge suddenly) and back off the gas when you see a red light in the distance.

Stop prolonged idling. If you plan to stop for more than 60 seconds, AAA says to shut off the engine to save fuel. Many newer cars already come equipped with an auto start-stop feature.

Drive the speed limit. Gas mileage decreases at speeds over 50 miles per hour. Every 5 mph you drive over 50 mph, you’re paying the equivalent of $0.18 more per gallon of gas. So if you reduce your speed by 5 to 10 mph, you can improve your fuel economy up to 14%, according to the U.S. Alternative Fuels Data Center.

Use cruise control. By driving at a steady speed, you avoid wasting gas with mid-range acceleration. A steady pace is also more relaxing and a good way to remind yourself to drive at — or near — the speed limit.

Philip Reed writes for NerdWallet. Email: Twitter: @AutoReed.

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5 Mistakes That Can Lead to a Bad Car Loan

5 Mistakes That Can Lead to a Bad Car Loan

As if we need more bad news about car buying, an analysis by Consumer Reports shows that many Americans are drastically overpaying for their car loans. And we can’t place all the blame on the pandemic or supply chain problems.

In one case, Consumer Reports found that a Maryland resident with “sterling credit” who bought a new 2018 Toyota Camry two years ago will end up paying $59,000 by the end of the loan. The reason: Their interest rate was bumped up to 19% when they actually qualified for a rate of 4.5%.

The Consumer Reports study, which looked at 858,000 car loans, concluded that bad car loans, the rising cost of cars and other factors have pushed the average monthly car payment to about $600 — an increase of almost 25% over the last 10 years.

With a little education and free online tools, such as a car payment calculator, you can set up a loan that works for your budget and avoid some common car loan pitfalls.

1. Extending the loan’s term

The term is how many months it takes to pay off the loan. The longer the term, the lower the monthly payments. However, the longer you take to pay off a loan, the more interest you will pay.

For example, if a person with a credit score of about 600 buys a $30,000 car and finances it for 60 months at the rate of 6.61%, they’ll pay $5,311 in interest. But if that loan is extended to 80 months, they’ll pay $7,175 in interest. That’s an extra $1,864 up in smoke.

And here’s another reason for not extending the loan: 80 months is almost seven years, and a seven-year-old car will likely need more repairs and maintenance. You’ll have to cover those expenses in addition to your car payments.

2. Not shopping for your loan

Before you shop for a car, you really should shop for a loan. I know that doesn’t sound like fun, but it saves you money and might even stop your car from being repossessed down the line.

Start by checking your credit and resolving any issues you discover. Then, apply for a preapproved car loan from a credit union or online lender. By doing this ahead of time, you can choose the down payment and loan term to fit your budget.

Getting preapproval also simplifies the negotiation process because it gets you focused on the out-the-door price. You can always take the dealer’s financing if the interest rate is lower. But your preapproved loan will serve as a bargaining chip to get its best rate.

3. Being ‘upside-down’ on a car loan

You’re upside-down on a car loan when you owe more than the car is worth. Why is this a problem? Well, if you experience an unexpected life change — a divorce, death or sickness in the family — and you have to sell the car, you’ll have to pay off the loan, plus the negative equity.

On the other hand, if you have equity in your car, you can use that as a down payment on your next car. Or just sell it, pay off the loan and pocket the difference.

4. Rolling negative equity into the new loan

If someone is upside-down on a car loan, but they just have to buy that new car, the dealer will be happy to roll the negative equity into the next loan. In that way, a person who is $10,000 upside-down on a car loan can buy a $30,000 car and wind up with a $40,000 loan.

There’s no good reason to roll negative equity into a new loan. Doing so can lead to a spiral of debt as you try to keep up with the payments. Instead, keep driving your current car and try to make extra payments until you’re right-side up.

5. Buying extras

Sometimes, that car you agreed to buy has dealer-installed options that aren’t listed on the sticker. Those might be mudguards, running boards, fancy wheels, door protectors or anti-theft devices. If that’s not enough, the finance manager might give you the hard sell on an extended warranty, a wheel and tire warranty or a prepaid maintenance plan.

All of these extras go into your balance on the sales contract and result in a much higher loan to pay off. The best strategy is to flush out those extras early in the negotiation process. I like to ask for an out-the-door price with a breakdown of all the costs and fees.

Car loan best practices

Here are several ways to keep control of your car loan:

  • Use a car loan payment calculator to estimate your monthly payment. Try using different terms and down payment amounts to see what works best for your budget.
  • Be realistic about what monthly payment you can afford, and shop for a loan that meets that criteria.
  • Getting preapproved for a car loan is perhaps the single best way to keep control of your car-buying transaction.
  • Carry as little debt as possible by saving for a down payment of at least 20% of the purchase price. This will keep you from being upside-down.
  • If you can’t afford to buy the new car you want, consider buying used, or look into leasing.

Philip Reed writes for NerdWallet. Email: Twitter: @AutoReed.

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5 Car-Buying Mistakes to Avoid in Today’s Overheated Market

If you’re shopping for a new or used car in today’s overheated market, you’ll find that the game has changed. A variety of conditions have seemingly given sellers the upper hand.

“Skimpy inventories and sky-high prices have caused many buyers to postpone their purchases,” says Michelle Krebs, executive analyst for Cox Automotive, a leading communication, media and automotive service company.

Postponing your purchase until the market stabilizes is the best option. But if you have to buy a car now, make sure you avoid these five common mistakes:

1. Being unprepared

This is a new car-buying environment and you may need to reset expectations. Here are the significant adjustments to be aware of before you can snag a car:

Pricing. Most buyers are paying sticker price or above, and “there is no end in sight for price increases,” says Ivan Drury, senior manager of insights for, an online resource for automotive inventory and dealer reviews. For used vehicles, “the ceiling keeps rising as new transaction prices reach all-time highs,” he says.

Krebs says that the average transaction price for a new vehicle soared to more than $45,000 in September. And while this figure might seem exaggerated, it is not. According to Kelley Blue Book, while Americans bought 7.3% fewer cars in September than in August, the average price for a new car was $45,031.

Inventory. Since new-vehicle inventory is about 2.5 million units less than it was at this time in 2019, according to Krebs, you will have to conduct a broader search to find the car you want. It helps to be flexible when choosing a brand, color and options, as well as whether you buy a new or used vehicle.

Timing. With inventories so low, make sure you’re ready to buy when you find a car that’s available at a competitive price. “You snooze, you lose,” Drury says. “The days on the lot are getting to the lowest levels we’ve ever seen.” With today’s high demand and low supply, cars don’t sit on the lot and often sell before arrival.

If you can’t find the car you want on the lot, ask what cars are being shipped to the dealership and reserve one. Be prepared to pay a deposit to hold your car as soon as you select one.

2. Losing money on your trade-in

Used car values have shot up and dealers are scrambling to beef up used car lots. This puts you in a stronger position when trading in your old car — if you follow a few simple steps:

  • Using a pricing guide, such as Kelley Blue Book or Edmunds, look up your car’s value, adjusting it for condition, options and mileage. Also, check automotive classifieds, such as AutoTrader, to gauge the asking price in your area.
  • Get offers from used-car-buying sources such as Carvana or CarMax. Keep in mind that these prices might change after your car has been inspected.
  • After you agree on the price for your new car, see if the dealer can beat the researched price or the online quotes you got for your trade-in. If it won’t match it, sell your car to the highest bidder and use the money as a down payment on your new vehicle.

Keep in mind that, depending on the state you live in, even if the dealer’s price is lower than other sources, a trade-in might reduce the amount of sales tax you will pay on your new car.

3. Not getting preapproved financing

Getting preapproved for a car loan will help you identify any credit problems before going to a dealership. Preapproved financing also provides other advantages:

  • It offers you a chance to set up your own loan with the right down payment and loan term.
  • It may simplify dealership negotiations by allowing you to focus on the “out-the-door price.”
  • It could serve as a bargaining chip in getting the dealer to offer a better rate.

4. Buying unnecessary extras

With low inventories and high buyer demand, dealers are loading up their cars with profit-boosters, according to Oren Weintraub, president of Authority Auto, a concierge car-buying service in the Los Angeles area. Such upsells include additional warranties, anti-theft devices and dealer add-ons such as mudguards and wheel locks.

You can flush out these hidden charges early by asking for the out-the-door price, which then empowers you to tell the dealer what you want and what you don’t need.

5. Ignoring the out-the-door price

Given the likelihood you’ll see some additional markups on most cars, it’s essential to focus on the big picture: the out-the-door price. Does it matter if the paperwork includes $595 worth of anti-theft window etching you never asked for, as long as you hit the overall price you wanted?

The out-the-door price is a single, simple number that reveals the specific cost of everything — the car, registry fees, taxes, dealer-added extras. It’s a number you can write a check for and drive away or take to the finance office to arrange a loan.

A similar and dangerous distraction is when the dealer focuses only on the monthly payments. But, if you’ve prearranged a loan or used a car loan calculator, you should have an idea of what you can borrow and what the payments will look like.

Philip Reed writes for NerdWallet. Email: Twitter: @AutoReed.

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Sometimes You Need a Map, Not an App

Believe it or not, there are still plenty of places in the U.S. where there’s no cell phone service and, as a result, no way of navigating with your smartphone on the spot.

You might have to use — brace yourself — a map.

Remember maps? They’re made of paper, and no matter how hard you swipe, tap or pinch, they don’t change. Maps don’t have pop-up ads or cookies that track your searches; they might have pictures of local attractions around their edges instead.

And while folding maps might be a lost art, reading them isn’t.

As my wife and I plan to drive cross-country, we’re bringing an atlas of maps as a backup. It’s bulky and you have to turn the pages. But we want to be prepared for the unexpected.

8 reasons to bring a map

It’s a good idea to bring a map on a road trip as a backup, says Michael Tischler, Ph.D., director of the National Geospatial Program at the U.S. Geological Survey, or USGS. “When I was a kid, we always had a Rand McNally road atlas in our car,” Tischler says.

But there’s more than just the nostalgia factor. Here are a few times when you could be glad to have an old-fashioned map:

1. If your phone battery dies. Yes, we do sometimes forget to charge our phones and even to bring a cord to charge in the car. Paper never runs out of batteries.

2. In case your phone breaks. According to Tischler, there’s a saying in the military that if you’re under fire and someone shoots a hole in your phone, you have no map. But if someone shoots a hole in your map, you have a map with a hole in it. Even if you’re not under fire, you could lose your phone or drop it in the toilet, or a buffalo could step on it.

3. There’s no cell phone service. “GPS isn’t always 100% reliable,” says Linda Indolfi, director of publishing business administration and communications at AAA National. On our cross-country trip, we plan to visit Yellowstone National Park. Cellular service is “limited” in the park, according to the National Park Service website. “During summer the number of users can overwhelm cellular circuits,” the site says.

With this in mind, I visited my local AAA office and picked up a beautiful map of Yellowstone and another of Montana and surrounding states.

4. Trip planning. “Google Maps gives you access to a tremendous amount of information, but it’s mostly commercial information, such as the location of the nearest Starbucks,” Tischler says. “It doesn’t tell you how to recreate or what you might want to see in a national park.”

Glancing at my Yellowstone map, I could see the entire park and, looking more closely, useful details such as:

  • Scenic areas, observation points and, of course, Old Faithful geyser.
  • Visitor areas, ranger stations, hospitals and camping sites.
  • The height of mountain peaks and passes.
  • Seasonal road closures.

5. Brainstorming. It’s hard to gather around a smartphone screen and discuss the day’s plans. “But if you spread a map out on the hood of your car — that’s a conversation starter,” Tischler says.

6. Seeing the big picture. The scale of an online map “can be changed with the flick of a finger,” says Mark Anderson, a retired factory worker from Cleveland who enjoys long road trips and explores Civil War battle sites. He likes that the scale of a paper map is constant, which gives you a more accurate sense of distance when choosing a route.

7. Bridging the language barrier. If you’re in a foreign country and don’t speak the language, you can pull out a map and ask for directions. A friendly local can review the map with you and trace the route on it to your destination.

8. The memories. When the trip is over, a map with your route and stops marked is a great souvenir. The best ones make fine wall art. Try that with your phone.

Where to get maps

A 50-state road atlas is handy because it’s a good size and works everywhere, and you don’t have the hassle of folding it. An atlas is $10 to $25 and available online.

Most visitor centers at state borders or park entrances will have free maps. Additionally, many states will send you free maps through their visitors bureau. promises a map both “inspirational and informative.”

Then there’s the mighty AAA, which published its first maps over 100 years ago. With basic membership (varies, but about $65 a year), you not only get roadside assistance and towing, but you can also request maps of every state you plan to visit, parks along the way and city maps for more detail. You can also plan a trip online or go into any office for assistance.

While USGS maps don’t provide a lot of information for motorists, waterproof topographical maps can be purchased for hiking. In fact, Tischler says there’s been a recent uptick in map requests, indicating that, perhaps because of the pandemic, more people are getting away from it all.

Philip Reed writes for NerdWallet. Email: Twitter: @AutoReed.

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In This Hot Used Car Market, Used Plug-Ins Can Be a Deal

With used car prices soaring and the cost of gas up nearly $1 over last year, a used electric vehicle — either a plug-in hybrid or an all-electric car — could be a real money saver.

The price of used cars has risen 48% year over year, according to the Manheim Used Vehicle Value Index. Now, with a shortage of used cars and fewer new cars being built because of a microprocessor shortage, the electric car market could provide a twofold bargain: lower vehicle purchase price and substantial savings on gas.

Manheim doesn’t break out trends for hybrid and electric vehicles, but a study by iSeeCars, a website that aggregates used car listings, found that from May 2020 to May 2021, the asking price for plug-in hybrids increased 5%, and all-electric cars went up 17%.

A used all-electric car is a great fit for in-town use if you have a gas car for longer trips or don’t mind renting when needed.  It could also be a great first car for teenagers. A plug-in hybrid, on the other hand, can replace any traditional gas-powered car.

Here’s what to look for and who might want to shop this growing alternative market.

What’s a PHEV? What’s an EV?

Plug-in electric vehicles fall into two general categories:

Plug-in hybrid electric vehicles. Called PHEVs for short, these cars provide a limited all-electric range, then automatically switch to running on a gas engine. This eliminates the often-cited “range anxiety” that all-electric cars might trigger. The first PHEV on the market was the 2011 Chevrolet Volt, which provided up to 35 miles of all-electric range.

All-electric. These vehicles, sometimes called battery-electric vehicles, or BEVs, have a large battery that provides all the power. As such, their range is less than that of most gas cars. The first mass-market BEV was the 2010 Nissan Leaf, which offered only 73 miles of range before requiring a recharge. The current Leaf provides 226 miles of range.

Now, that these electrified cars have been on the market for almost 10 years, there is a variety of vehicles to choose from, both as sedans and SUVs (electric pickup trucks are coming later this year). Excluding Tesla models, there are 52 plug-in and all-electric 2021 models on the market, according to iSeeCars.

How a used EV could save you money

Lower purchase price. Electric vehicles depreciate quickly — nearly 52% after three years, according to iSeeCars. This means that EVs coming off lease, typically after three years, could be a bargain. Prices for plug-in hybrids are somewhat stronger but still reflect large depreciation, the iSeeCars study found.

Incentives, rebates and perks. Reducing the cost of plug-in vehicles even further are incentives offered by state and local governments. For example, the Los Angeles Department of Water and Power offers a $1,500 rebate to its customers who buy a used PHEV. Other utilities offer rebates to offset the cost of a home charger. Perks can include access to carpool lanes and, in some shopping centers, free charging with convenient parking spaces located near store entrances.

Gas savings. A big appeal for electric cars, besides the reduced carbon footprint, is the savings on gas. A year’s worth of gas for a 2018 Toyota Camry LE would cost $1,500, while a 2018 Prius Prime plug-in hybrid driver would pay only $650, according to

Where to find used plug-in vehicles

The cheapest used all-electric vehicles will be older models with limited range; they’ll be more common in the areas where they were sold new, like California.

You’ll find low-mile examples under $10,000 for pure electric models such as the Mitsubishi i, Chevrolet Spark, first-generation Nissan Leaf, the Fiat 500 e and the Smart Fortwo electric drive. A budget of $20,000 brings in roomier vehicles with more range, such as the newer Nissan Leaf, Hyundai Ioniq and Chevrolet Bolt.

Among plug-in hybrid electrics, the widely available Chevrolet Volt was called “an affordable option” in a June EV pricing report by Recurrent Motors. It says the average price of a used Volt is $14,600 and the 2018 models sell for about $20,000.

Used plug-in versions of the Hyundai Ioniq, Toyota Prius Prime and Ford Fusion Energi also come in under $20,000. In some cases the plug-in models of these cars may be cheaper than their plain old hybrid counterparts.

Keep in mind that used car prices vary by region, so you will have to do your own searches to find the best deals.

Before you go electric

If you want to buy a used all-electric car, you should probably decide ahead of time where to charge it. People living in apartments are likely to find charging difficult unless there are power outlets in the parking area.

For homeowners, the problem is more easily solved. Since a plug-in hybrid has a much smaller battery, it won’t take long to charge using a typical household 120-volt outlet. But for all-electric vehicles, charging times can be cut down by installing a faster 240-volt charger. The charging station and installation cost $1,200, according to the home remodeling website Fixr.

If you’re brand new to the idea, spend a few minutes asking yourself if you should buy an electric vehicle at all.

Used EV shopping tips

If you decide to venture into the new world of used electrified cars, here are a few more things to consider:

  • The battery in all-electric cars deteriorates over time, providing less range. If possible, fully charge the car before buying to see how much range is available.
  • Plug-in hybrids are less vulnerable to battery degradation.
  • Research available incentives before buying and factor this into the big-picture purchase price.
  • Because there are fewer EVs and plug-ins available, you may have to search a larger area to find the one you want.

Philip Reed writes for NerdWallet. Email: Twitter: @AutoReed.

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Put the Cap on Gas Prices: 6 Ways to Save at the Pump

When the price of oil spiked during the February deep freeze, I started using a gas price app and was amazed to find that the cost of fuel in my area varied by 70 cents a gallon. By purchasing the cheapest gas, I could save $8.40 each fillup and as much as $220 a year.

As we come out of the pandemic and pump prices climb, it’s once again time to be smart about your gas purchases. With some simple planning, a household with two cars could easily save the cost of a car payment each year. And businesses with a fleet of vehicles have much more to save.

Combine the following strategies to maximize your savings and perhaps find other rewards, too. (Of course, buying gas at a bargain is only half the opportunity; you can drive in a way that stretches your gas even further.)

1. Use a gas price app

If you do only one thing, this is it. A recent study by GasBuddy concluded that convenience — going to nearby or familiar gas stations — was the biggest money-wasting culprit. Shopping around on a gas app will quickly show you the cheapest gas in your area or along your intended route.

“People think that the difference between $2.00 and $2.21 is not that much,” says Patrick De Haan, head of petroleum analysis for GasBuddy. “But if they are buying 20 gallons every week, the savings adds up fast.” In cities, prices can vary by as much as a dollar a gallon, he says, making the savings even greater.

While GasBuddy is perhaps the best-known gas app, there are others available. And you can filter the results to show the price of different fuel grades and which stations offer diesel.

2. Choose a good rewards program or credit card

Many such programs abound, but drilling down — pun intended — to the savings is difficult. Here’s a quick look at the important factors to consider when choosing the best card for saving money on gas:

  • Annual fee: If a credit card carries an annual fee, it can quickly wipe out your initial savings. However, if the card offers robust savings in other areas too, it might be worth it.
  • Reward caps: Some gas savings are capped either per quarter or per year. Figure out what your spending is and determine whether it fits under the card’s rewards cap.
  • Redemption value: Make sure you understand what each rewards point is worth. Many are a penny, but some are even less. Also, once you accumulate points, what can you redeem them for?
  • Pump or gas station: Some cards offer rewards on anything bought at a filling station, while others specify their gas rewards are for pay-at-the-pump purchases only.
  • Membership requirements: Are there membership costs that ding you or is it a hassle to join?

Remember, if you are using a credit card, pay off the entire balance or the interest will wipe out any gas price savings.

3. Buy from a warehouse club

Filling up at one of the warehouse clubs is a great way to save if you don’t mind the trade-offs, such as membership fees and long lines. The Costco in my area was selling regular gas for 45 cents lower per gallon than my county’s average price as reported by AAA. But keep in mind that you have to offset a $60 yearly membership fee, and long lines means you’re weighing your time versus savings. Still, you could go early in the morning since the pumps open well before the store does.

4. Buy the right fuel for your car

Purchasing a higher grade fuel doesn’t necessarily benefit your car. Look in your owner’s manual or on the gas cap: Is it “recommended” or “required”? For cars that merely recommend it, premium gasoline may slightly improve performance and fuel economy, according to Greg Brannon, AAA’s director of automotive engineering and industry relations.

But if your car doesn’t require premium, don’t bother. When you buy lower grade fuel, “The savings you get is much greater than the cost of the drop-off in fuel economy,” Brannon says.

5. Pay cash

Most gas stations advertise a cash price that is cheaper than the credit card price. This might mean bringing paper money — remember that stuff? — and paying the clerk inside. But at some stations, using a debit instead of a credit card will also get you the cash discount.

If you opt for a debit card, make sure you’re getting the discount before you start pumping since not all stations allow this. And keep in mind that debit card transactions are less secure than using a credit card since thieves could intercept your PIN code and empty your coffers.

6. Fill up before a spike

Natural disasters and severe weather can eventually bring higher gas prices to your area. For example, the deep freeze in Texas forced the shutdown of Gulf Coast and some Midwest refineries and drove up gas prices by 13 cents in one week. You can easily check prices in your area on AAA, which also predicts oil price increases.

Philip Reed writes for NerdWallet. Email:

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Is It Finally Time to Get an Electric Car?

Electric cars now drive farther, charge faster and come in nearly every price range.

But when GMC began promoting its Hummer EV pickup truck to be released this year, it became even clearer that electric cars are primed to go mainstream.

Once the domain of environmentalists, then early adopters, EVs may soon have even truck bros kicking the gasoline habit.

With many models now available or coming soon — including a knockoff of the lovable Volkswagen Microbus — you may be wondering if it’s finally time to buy or lease an EV.

Here are the essential questions to answer before you do.

(Full disclosure: I’m a convert myself after six years and 70,000 gas-free miles.)

1. Can you afford an electric car?

EVs tend to be pricy to buy but can be more affordable to lease. Finding federal, state and local government incentives can also reduce sticker shock. And, even if the monthly payment is higher than a comparable gas car, operating costs are lower.

Gas vehicles cost an average of $3,356 per year to fuel, tax and insure, while electric cost just $2,722, according to a study by Self Financial. Find out how much you can save with the Department of Energy calculator.

2. How far do you need to drive on a single charge?

Although almost 60% of all car trips in America were less than 6 miles in 2017, according to the Department of Energy, the phrase “range anxiety” scared many would-be early adopters.

Teslas became popular in part because they offered 250 miles of range. But the range of many EVs between charges is now over 200 miles; even the modestly priced Chevrolet Bolt can travel 259 miles on a single charge.

Still, EVs have a “road trip problem,” according to Josh Sadlier, director of content strategy for car site “If you like road trips, you almost have to have two cars — one for around town and one for longer trips,” he says.

3. Where will you charge it?

If you live in an apartment without a charging station, this could be a deal breaker.

The number of public chargers increased by 60% worldwide in 2019, according to the International Energy Agency. While these stations — some of which are free — are more available, most EV owners install a home station for faster charging.

EVs can be charged by plugging into a common 120-volt household outlet, but it’s slow. To speed up charging, many EV owners wind up buying a 240-volt charging station and having an electrician install it for a total cost of $1,200, according to the home remodeling website Fixr.

4. What will you use the car for?

While there are a few luxury electric SUVs on the market, most EVs are smaller sedans or hatchbacks with limited cargo capacity. However, the coming wave of electric cars are more versatile, including vans, such as the Microbus, and trucks, such as an electric version of the popular Ford F-150 pickup.

5. Do you enjoy performance?

This is where EVs really shine. According to automotive experts, electric cars beat their gas counterparts in these ways:

  • Immediate response with great low-end acceleration, particularly in the 0-30 mph range.
  • Sure-footed handling due to the heavy battery mounted under the car, giving it a low center of gravity.
  • No “shift shock” from changing gears in a conventional gas car’s transmission.
  • Little noise except from the wind and tires.

Other factors

Once you consider the big questions, here are other reasons to make an electric car your next choice:

Reduced environmental guilt. There is a persistent myth that EVs simply move the emissions from the tailpipe to the power generating station. Yes, producing electricity produces emissions, but many EV owners charge at night when much of the electricity would otherwise be unused. According to research published by the BBC, electric cars reduce emissions by an average of 70%, depending on where people live.

Less time refueling. It takes only seconds to plug in at home, and the EV will recharge while you’re doing other things. No more searching for gas stations and standing by as your tank gulps down gasoline.

No oil changes. Dealers like a constant stream of drivers coming in for oil changes so they can upsell other services. EVs have fewer moving parts and require fewer trips to the dealership for maintenance.

Carpool lanes and other perks. Check your state regulations to see if an EV gets you access to the carpool lane, free parking or other special advantages.

Enjoy the technology. Yes, EVs are more expensive, but they also tend to offer top-of-the-line comfort, safety features and technology compared with their gas counterparts.

Philip Reed is a writer at NerdWallet. Email: Twitter: @AutoReed.

The article Is It Finally Time to Get an Electric Car? originally appeared on NerdWallet.

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Upgrade Your Old Car With New-Car Tech

Time has marched on since you last bought a car.

You may love the reliable, low-mileage car parked in the garage but still long to make a hands-free phone call or summon up a song off Pandora. But you don’t need to spend $35,000 on a new car just to get a rear backup camera or any of the other high-tech features you’re lusting after.

For the price of a typical new-car payment, $550, you can add any of the seven upgrades below.

Backup camera. Of all the safety features on the market today, Consumer Reports found that drivers ranked the backup camera as the most useful. In tall vehicles, such as pickups and SUVs, the backup camera shows the blind spot under the rear tailgate. Even in small cars, the camera will help you safely park, then pull out in crowded parking lots. They became mandatory in 2018.

Prices and features vary wildly. A basic backup camera with a monitor costs less than $50. Other models that connect wirelessly and display an image on a rearview mirror are about $100. Before you choose a backup camera, review the directions to see if drilling and advanced wiring is required. If so, have the installation done by a pro.

Blind spot warning and cross-traffic alert. By adding radar sensors to your car, you can enjoy two popular safety features. The two that are most commonly bundled together in aftermarket kits are blind spot warning and cross-traffic alert.

If you want to change lanes, the device warns you if a car or truck is in your blind spot. In busy parking lots, even a rear backup camera might not show you a car that’s coming. But cross-traffic systems alert you to when a car’s approaching, even if it’s out of sight. This is another upgrade that might need to be done by an electronics expert.

Bluetooth connectivity. Hands-free use of your mobile phone is an important safety feature and can prevent you from getting a traffic ticket. Some basic units, selling for as little as $25, are basically plug-and-play. Simply connect the device to the auxiliary power outlet (formerly known as a cigarette lighter) or the audio input jack, and you can make and receive phone calls safely through your existing sound system.

Head-up display. Surprisingly inexpensive, and costing less than $100 for some models, a head-up display projects your car’s vital information on a small screen right in front of your eyes. So, instead of glancing down at the gauges, your speed and other information are in your line of sight. Installation is easy — most units plug into the car’s computer connection, under the steering wheel, and a single wire leads to the display unit on the dash.

Dash cam. The aftermarket is flooded with many types of dash cams that provide an array of features. In a basic unit, selling for under $100, a small camera records a looped video on a digital storage card. If you’re in an accident, the event is locked in the memory so you can download it and use it for evidence. More expensive dash cams offer other information such as vehicle surveillance, sending you a notification if someone bumps your car or breaks into it. You can install most units yourself in a few minutes.

Tunes, directions and apps. The head unit in your car is often a touch screen used to access the car’s features and connect with your mobile phone. Swapping out the head unit is best done by a professional, but it can add to your in-car entertainment by allowing access to your favorite apps. Prices range wildly from $50 to $500.

Massaging and heated seats. On long drives, it’s nice to get a massage to stay alert and feel refreshed. And, on cold mornings, heated seats warm you up before your car’s system blows hot. There are many models available for less than $100. All you have to do is put it in place and plug it into your car’s power source.

Shopping tips

  • Review the product description carefully to make sure it is compatible with your year, make and model of car. This is easier on and other sites that allow you to enter your car’s information first, then display compatible products.
  • Be realistic about your installation abilities. If drilling and wiring is required, have the upgrade installed by an electronics expert, a mechanic or the dealer.
  • Search for information about the best products on car forums dedicated to your vehicle. This way, you can contact other owners of your type of car for advice.
  • YouTube is a fount of information about selecting and installing vehicle upgrades.

The article Upgrade Your Old Car With New-Car Tech originally appeared on NerdWallet.

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5 Car-Buying Tips From My Days as an Undercover Salesman

Some years ago, I became an undercover car salesman at two different dealerships in Southern California, as part of an investigative series for an automotive website. What I learned surprised and scared me, as I described in the resulting article, “Confessions of a Car Salesman.”

Selling cars turned out to be the perfect training for my current job as a consumer advocate and autos editor for NerdWallet. While I posed as a “green pea” — the nickname for a beginner car salesperson — the sales managers freely revealed their secrets to me so that I would move the metal and, in turn, make money for them.

Here are just a few of the things I learned and how you can safely navigate the car-buying process.

1. Test-drive your car salesperson

Believe it or not, I felt sympathy for many of the salespeople I worked with. They face long hours, hostility from customers and constant pressure from managers who watch from “the tower,” a raised platform overlooking the car lot. Later, as I used my insider knowledge to buy more than 100 cars for an automotive website, I met many honest, intelligent, helpful car salespeople. But the work of these “good apples” was often spoiled by a rotten batch of uninformed sales stereotypes — not to mention some manipulative and even underhanded dealership managers.

I like to tell people that they should test-drive car salespeople before they test-drive the car. Here are a few things to ask yourself: Are they informed about the cars they are selling? Do they listen well and respond to your questions? Will you feel comfortable negotiating with them?

2. Check the ‘book’ value

It takes only a minute to look up the current market value of a car — and yet many shoppers wander onto the car lot without any idea of what they should pay. This one little data point would provide an amazing amount of protection. But as an undercover car salesman, I had to stand by and watch trusting, ordinary buyers overpay for their new cars.

So take a moment and check a pricing guide such as Edmunds or Kelley Blue Book for the current market value of the car you want. Bring this information with you, or download a pricing app to check prices on the fly.

3. Don’t be a monthly-payment buyer

“What kind of monthly payment are you folks looking for?” This helpful-sounding question is the favorite trick of car salespeople everywhere. And if you answer, it can be a financial disaster for you. While it sounds like the salesperson is concerned about your budget, it’s the opening gambit for a tactic called “packing payments.” If the dealer can get you to negotiate a monthly payment rather than the purchase price of the car, it’s easy to add in — or “pack” — extras and make you overpay.

Getting a preapproved car loan and telling the salesperson you are a “cash buyer” is an easy way to deflect this trick.

4. Be ready to walk

You could walk into a dealership and have the same high-pressure experience your father had when he bought cars decades ago. Or you could have a mellow, enjoyable shopping experience where you get a fair deal. There’s such a wide range of sales styles and dealerships.

I worked at a “turnover house,” meaning that if one salesperson wasn’t making progress with a customer, the customer was turned over to a different salesperson. If that didn’t work, they brought in a “closer” —  an overbearing, manipulative bully who was determined to make a deal at any cost.

If you see these warning signs, if you get a bad vibe, if you don’t like your salesperson, beat a hasty retreat — instead of going to war, go to another dealership. For example, the second dealership I worked at was very relaxed and didn’t use closers. But high-pressure or relaxed, whichever type of car lot you find yourself on, never take anything at face value.

5. Beware the finance manager

While the salesperson negotiates the price of the car and pretends to be your best friend, the real damage is done after the customer is handed off to the finance and insurance manager. Also called the “F&I guy,” this salesperson assumes the air of a financial advisor, sort of like a friendly banker. But he or she is really there to build even more profit into the deal by inflating the interest rate on your loan and selling you extra products such as extended warranties and anti-theft devices.

Before you go to the dealership, spend a few minutes being your own finance manager by using an auto loan calculator to set up your own deal. Bring these figures with you to the dealership and get the dealer to match or beat them.


The article 5 Car-Buying Tips From My Days as an Undercover Salesman originally appeared on NerdWallet.

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