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A good used car can save you money

DEAR BRUCE: Our last used car (13 years old) appeared to be in decent condition when we bought it, but it bled us dry on repair costs before it finally died. We thought we were being prudent with our finances by buying a used car, but this one ended up being a money pit. This experience has motivated us to look for a much more dependable used car to replace this one. We are using Consumer Reports as a source for reliability data so we won't wind up with another lemon. A Honda Civic is appealing to us as a very reliable/durable car.

Conventional wisdom says the value of most new cars goes down dramatically over the first three years, but that doesn't seem to be the case for Hondas. According to Kelley Blue Book, a 5-year-old Honda Civic LX Sedan 4D with 57,500 miles from a dealer should cost $15,765 (81 percent of the new price). A 2-year-old Honda Civic LX Sedan 4D with 24,500 miles should go for $19,215 (99 percent of the new price). A new 2012 Honda Civic, with zero miles and a full warranty, costs about $19,425. So does it really make sense to purchase a Honda or similar high-reliability car used? What are your thoughts? — M.T., via email

DEAR M.T.: Like any purchase, including a new car, sometimes you are going to get stung. Just because one used car didn't work out would not persuade me that buying used cars is a bad idea. For many years, when I was still raising children and had school and other expenses, I purchased used cars and seldom regretted it.

As to the Civic and its holding values, you mentioned buying from a dealer. If you buy a used car from a dealer (there is nothing wrong with that), you can expect to pay a great deal more than you would on the open market from an individual. If you look carefully, you will find a used automobile that will cost considerably less to buy, insure and operate.

By all means, before you make the final decision on any car, have a good mechanic examine it. Expect to pay $200 to $300 for that inspection. It is very much to your advantage.

I understand you have done careful research, but I would quarrel with the numbers you have come up with. There is no way in the world I'd buy a 25,000-mileage car for 99 percent of the new price. I am sure you can do a great deal better.

If you are very carefully watching your budget, a good used car is the way to go. Understand, you just can't go out on a Thursday night and decide you want to buy one. It may take a month or two and a fair amount of diligence, but properly executed, the search for the right car is very rewarding.

DEAR BRUCE: We have been trying to sell our home for the past two months, but we continue running into brick walls. We have prominent buyers who have money in hand and are ready to close, but we can't. After reading your columns, I decided to ask for your advice.

When we were approved for our home loan, we had one mortgage company. After three to four months, part of our mortgage was sold to another company. We then had to pay the new mortgage company, which was OK, just frustrating that we had to deal with two companies. We continued making payments until we refinanced in 2007, and now we have a new mortgage through someone else.

Our problem lies with the second company (the one to which our original company sold part of our mortgage). It is no longer in business. I understand it was shut down because it failed to abide by federal funding laws. This puts us in a bind, because neither company filed lien releases regarding our mortgage, when it was paid in full. I have contacted the bank almost daily and get the same answer: They will escalate it to the reconveyance department, but nothing ever happens.

How can I get the bank to submit an affidavit stating that it is the successor for Wilshire, and that it has no interest in our mortgage? Do I just hire an attorney? Does the bank have access to all the closed mortgages, being as it acquired all the loans? Do I have a legitimate reason to sue the bank? How can I get a satisfaction of title in the state of Oklahoma? — C.W., via email

DEAR C.W.: A mortgage can be sold, not only once but maybe three or four times. The original lender may or may not enter into an agreement with the new owner to service the contract. It's true that some lenders will issue the lien releases and so forth, but what's in it for them? If they don't, have they lost anything? Of course not.

Hire an attorney. Believe it or not, that's what you should have done originally. Using an attorney for legal matters is not a big deal, and it should not cost you a bunch of money.

You ask whether you have a legit reason to sue one of the banks involved. The general answer is that you can sue anybody for anything. As to whether there will be any award or whether it will be sufficient to cover your expenses, generally speaking, the answer is no. As to getting the satisfaction of title in Oklahoma or anywhere else, hire a professional. I know that's not the answer you are looking for, but for goodness sake, you have been trying to sell your house and the deals are not going down because of a relatively small problem. Bite the bullet and spend the money. Good luck with your new purchase.

Send your questions to Smart Money, P.O. Box 2095, Elfers, FL 34680. Send email to bruce@brucewilliams.com. Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.