Last Page Edit 02/14/08

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What Should I Know When Buying A Car?

Maryland's Lemon Law 
What Do I Need Before I Can Drive My Car?
Selling Your Car.
What If Something Goes Wrong?

What You Should Know When Buying Your Car?
If you are interested in buying a car, there are a variety of questions you should consider such as whether you should lease or buy your next car, whether you should buy a new or used car, and what other costs are associated with your purchase.

Should You Lease or Buy Your Car?  

  • Lease vs. Buy: This detailed article was created at LeaseGuide.com and provides a great starting point to understanding the total difference in cost between your “lease payments” and your “loan payments” associated with your next car.

  • Keys to Vehicle Leasing  This consumer guide is provided by the Federal Reserve Board and explains your rights when leasing a car.  This guide is also available in Spanish.

  • LeaseGuide.com is a comprehensive website founded and managed by respected expert, Al Hearn, which provides an educational guide to understanding auto leasing.  The site includes an introduction to auto leasing, a guide to how leasing works as well as tips on how to negotiate a deal.  There is also a useful “payment calculator” as well as answers to commonly asked questions that are helpful in deciding whether you should lease or buy your next car.  

Free Online Resources for Getting Lease and Loan Rates  

  • LeaseCompare allows you to compare auto lease payments from multiple lenders by choosing what car you are interested in leasing.

  • PrimeLease is very personal and friendly, specializing in auto leases for people with excellent credit. They work with Bank of America, Chase, Wells Fargo, and other major financial institutions to find you the best deals.

  • Expert Lease Pro software performs professional detailed lease/buy analysis, lease comparisons, and cash flow. Recommended for business leasing, accountants, consultants, financial and automotive advisors and savvy consumers.

  • Cars.com provides information on the current loan rate for used and new cars and allows you to search Maryland banks and financial institutions for the best possible loan for your car.  

Should You Buy a New or Used Car?
Buying a new car is usually the second most expensive purchase many consumers make, after the purchase of their home.  With cars lasting longer these days, the question you must ask yourself is “Do I buy a new or used car?”  Yet before making that decision you should understand the terms that the salesperson is going to use.

To give you a better sense of the negotiating room you have when buying your car, it helps to understand the following terms, listed here in order of increasing price:

  • INVOICE PRICE is the manufacturer’s initial charge to the dealer. This is usually higher than the dealer’s final cost because dealers often receive rebates, allowances, discounts, and incentive awards. The invoice price always includes freight (also known as destination and delivery). If you are buying a car based on the invoice price (for example, "at invoice," "$100 below invoice" "two percent above invoice") be sure freight is not added to the sales contract.
  • BASE PRICE is the cost of the car without options, but includes standard equipment, factory warranty, and freight. This price is printed on the sticker (see below).
  • STICKER PRICE, which appears on a label affixed to the car window and is required by federal law, shows the base price, the manufacturer’s installed options with the manufacturer’s suggested retail price, the manufacturer’s transportation charge, and the fuel economy (mileage). The label may not be removed by anyone other than the purchaser.
  • DEALER STICKER PRICE, usually on a supplemental sticker, is the sticker price plus the suggested retail price of dealer-installed options, such as additional dealer mark-up (ADM) of additional dealer profit (ADP), dealer preparation, and undercoating.

Researching Your Car  
 

  • Edmunds  This site provides new and used car prices and information regarding appraising, buying and selling your car.  You can also get information on car comparison tests, advice on negotiating with salespeople as well as enter the various chat rooms to get other consumers opinions on a particular car.

  • Autoweb  This site provides three search engines that enable you to research you vehicle based on a specific brand, a particular class or based on different options you want to have on your car. 

  • Kelly Blue Book  This site enables you to compare the sticker price on a used car versus the estimated “retail value” of the particular make, model and year of your car.  You can also find valuable articles on vehicle safety, maintenance issues and the latest car reviews.  You can also check the “trade-in” value of your car to determine whether you should trade your car in when you purchase your new car or try to sell it on your own.

  • InvoiceDealers  This for-profit site allows you to purchase you car quickly and easily over the Internet.  The company is partnered with the area auto dealers and buying services on the Internet to help you buy your next car… fast.

  • Recalls  Check with the National Highway Traffic Safety Administration to find out whether your car has been recalled for a mechanical defect.

  • Carfax.com This site enables you to obtain a free copy of your vehicles history report.  All you need is the Vehicle ID Number (VIN) and your zip code.  The VIN can be found on dashboards and title documents. All cars and light trucks built after 1981 have a unique 17-character VIN that contains valuable information about that vehicle's history.

 

Maryland's Lemon Law 

The Maryland Attorney General’s office describes the Maryland “ Lemon Law” and includes downloadable complaint forms. Note that Maryland's lemon law applies only to cars, light trucks and motorcycles that:

  • Are registered in Maryland, and

  •  Have been driven less than 15,000 miles and been owned less than 15 months.
    (Even if you are not the original owner, the Lemon Law might apply to your vehicle if the original owner purchased it less than 15 months ago.) The law says that a dealer or manufacturer must correct a defect within 30 days 

What Does Maryland Require Before You Can Drive Your Car?

Registration and Tags
For information on registering your car and getting tags visit your local branch office of the Maryland Motor Vehicle Administration.  This site provides contact information and driving directions for each of the MVA branch offices.

Valid Driver’s License
Before you can take your new car out on the road you have to apply for your Maryland Driver’s License.  Click here for information on applying for your license at your local branch office of the Maryland Motor Vehicle Administration. This site provides information on what you need to bring with you, general requirements to qualify for a license, as well as what you should do if your driver’s license has been suspended or revoked.  Note: Driving without a valid license is against the law. 

Inspection
A Safety Inspection is required for all used cars, trucks, tractors, motorcycles, special equipment, and class "B" for hire vehicles being titled and registered in Maryland. A licensed Maryland inspection station, such as an automobile dealer, a service station or a specialized automobile service center, must inspect your car.  If your car passes, they will issue you a certificate of inspection, which you must bring with you to the MVA to register you car.  See Registration and Tags for details.

Emissions Test
Maryland requires that every car registered in the state to pass an emissions test to help cut down on the car pollution.  At some point during your two-year registration period, you'll receive a notice from the MVA requiring that you have your vehicle inspected. When you get the notice, bring your car to one of the testing stations listed in the notice. The test costs $14 and can be paid with cash, check, Visa, or Mastercard. If your car doesn't pass, the first re-test is free, provided you visit the station representative to discuss the test results before you leave. Click here for locations and details.

Insurance
Maryland requires you to obtain an appropriate level of car insurance.  Click here for specific information of what Maryland requires as well as answers to your insurance questions.  For information on comparing insurance prices consult the online links below.

  • Autoweb.com  This site lets you quickly compare free quotes from the major auto insurance carriers in the Maryland area. The application takes about 15 minutes to complete and requires some general information. 

  • 4AutoInsurance.com  This is a great site that provides links to the websites of a variety of national car insurance companies, a directory of local agents, and explanations of roadside assistance programs.

What You Should Know When Selling Your Car? 

Before you start, check the free online estimate of the “retail value” of your car at Kelly Blue Book.  This will help you know the realistic price range you should set for selling your car.

You can also get a detailed analysis from Consumer Reports.  They offer a used car price service report with general valuation plus a formula to apply to the general cost figures for your particular car. (Cost $10)

What Should I Do If Something Goes Wrong?  

Start With the Source
You should start with the person or dealer you purchased your car from to resolve the dispute.  Make sure you talk with the salesperson you dealt with to date and involve the manager if the salesperson cannot solve the problem

Contact the Manufacturer  
If the problem is not resolved at the dealership, you can contact the consumer affairs office at the manufacturer's regional or national office.  You can find a list of contacts of various car manufacturers on the Federal Consumer Information Center.

TIPS on Contacting the Dealer: 

Maryland Lemon Law
If you suspect you have a vehicle problem that might fall under your state's lemon law, call your local or state consumer protection agency to find out about your rights under the lemon law.

The Maryland Lemon Law can be found in the Maryland Commercial Law Code Annotated, § 14-501 to § 14-504 or online at the Center For Auto Safety.  This is an organization by the Consumers Union and Ralph Nader to provide consumers with information on automobile safety and solutions to consumer issues.  You can also order books online, such as the “Lemon Book” and the “Ultimate Car Book.”

Note: The Complaint forms are in a special format called “PDF.” If you would like to download the complaint form and fill it out by hand, you must have a program called Adobe Acrobat Reader.  If you do not already have the program, you can download a free copy of it.

Alternative Dispute Resolution
Generally, there are three types: arbitration, conciliation and mediation. All three methods of dispute resolution vary. Ask for a copy of the rules of the program before you file your case. Generally, the decisions of the arbitrators are binding and must be accepted by both the customer and the business. However, in other forms of dispute resolution, only the business is required to accept the decision. In some programs, decisions are not binding on either party.

If your lease / contract contains an arbitration clause the dealer is required to participate in an arbitration process with a mediator.

Office of the Attorney General Consumer Protection Division
If you are unable to resolve your problem at the source and you are still dissatisfied with a car you purchased or the automotive service you received, you can file a complaint with the Office of the Attorney General Consumer Protection Division.  At your request, the OAG will assign you a volunteer mediator to work with you and the business in order to negotiate a mutually agreed upon resolution to your problem.  You can check the status of your complaint by calling the hotline between 9 a.m. and 3 p.m. at 410-528-8662

Safety Questions

If you have a safety problem with your vehicle, report it to the National Highway Traffic Safety Administration Auto Safety Hotline. NHTSA also provides recall and crash test information, but does not handle complaints. NHTSA
Source: Maryland State Law Library (MSLL)

Last date of legal review 02/14/08 (PLL/M.A.J.)
Is this legal advice? This site offers legal information, not legal advice.  We make every effort to ensure the accuracy of the information and to clearly explain your options.  However we do not provide legal advice - the application of the law to your individual circumstances. For legal advice, you should consult an attorney.  See our section on Finding Legal Help.

About this website. The Maryland State Law Library, a court-related agency of the Maryland Judiciary, sponsors this site. The website was developed (1999-2007) as part of an access to justice initiative by the Maryland Legal Assistance Network (MLAN) in collaboration with a number of legal services providers serving low and moderate income Marylanders.  In the absence of file-specific attribution or copyright, the Maryland State Law Library may hold the copyright to parts of this website. You are free to copy the information for your own use or for other non-commercial purposes with the following language “Source: Maryland's People’s Law Library – www.peoples-law.org. © Maryland State Law Library, 2007.”

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