AFFORDABILITY-ARE YOU BEING HONEST WITH YOURSELF AND YOUR BANK ACCOUNT?
This is the most important tip that I can give you. You must choose a vehicle that you can truly afford. Far too often in my career, I have seen people make an impulse decision based on emotional involvement(which is what every salesperson wants you to do), and put themselves in a bad financial position. It is important that you keep your head and do not get caught in the trap. We all want more than we can really afford. It is of paramount importance, that you take the time to fully examine your finances and plan accordingly. It will serve you well down the road and keep you from financial ruin and heartache. We all want the status brands like BMW, Mercedes, Porsche, Audi, Lexus, etc.. These are all wonderful cars and offer the highest levels of luxury and sporting performance, but they come with a huge cost. I am not just talking about the purchase price, I am speaking about the total cost of ownership. There are many factors such as depreciation, maintenance, insurance, and repairs, that all contribute to money being sucked out of your pockets. If you are in a great financial position and can truly afford these vehicles, then they are nothing short of amazing automobiles, but they are not for everyone. There are many other cars and trucks that offer great value and performance for far less. Examine the choices carefully and choose accordingly, and it will keep you from making a huge mistake that leads to financial disaster.
RESEARCH YOUR CHOICES-ARE YOU CHOOSING THE RIGHT CAR OR TRUCK FOR YOU?
Far too often consumers make an impulse purchase based on emotion, and “falling in love” with a vehicle. We have all been guilty of this at one time or another, but it is important to recognize this fact. I strongly encourage you to research the vehicles you are considering and take all the factors of that particular vehicle in to account. The factors I am talking about are things like, depreciation( the number one killer to your wallet, so please read section dedicated to this silent killer), overall cost of ownership, insurance costs, maintenance, resale value, and how you plan to use the vehicle. Take the time to think about your current lifestyle and what you anticipate for the future. I say this, because it is important to make a well thought out decision, and avoid a painful financial situation. If you make a mistake, you could potentially lose thousands of dollars trading or selling the vehicle.
FINANCING YOUR NEW OR PREOWNED CAR-ARE YOU PAYING TOO MUCH?
A good many people in their haste to get a new car overlook the obvious, and that is they are paying too much in finance costs. This can be a significant amount of money when financing over an extended period of time. One point in the interest rate over a 72 month loan on a thirty thousand dollar vehicle, can be hundreds of dollars in added finance costs. I will cover this more in detail in the finance section, but for now let’s just keep it simple. This is money that could be in your pocket instead of the dealer, or finance institution. There are a couple of things you can do to ensure this does not happen to you, and you get the best rate and terms available or your situation.
1. Know your credit score!
Often times people do not know their credit score, and accept the rate given to them by the selling dealer. It is especially important to know your credit score if you think your credit is marginal, or just plain poor. Keep in mind that dealers make money by marking up the rate. It is not uncommon for dealers to have you “believe” that your credit is worse than it really is so they can charge you more interest. This is avoidable by keeping leverage on your side, and being informed about what you qualify for in terms of rate.
2.Seek Pre Approved financing!
I encourage you to shop around and seek pre-approved financing, so if you decide to accept the dealer financing, it is line with what it should be under the circumstances. I will be providing you with many trusted sources to help you with pre approved financing, and make the process very simple. This will give you the confidence that you are getting the best rate possible for the year, make , and model of vehicle you are looking at, and the structure of the deal. NOTE: Contrary to popular belief, multiple inquiries from lending institutions in a short period of time, does not affect your credit score in the way that people think it does, and has a minimal effect at best . It is multiple inquiries over an extended period of time that will have an adverse affect, and have a noticeable effect on your score.
THE POWER OF A PRE PURCHASE INSPECTION-“PENNY WISE AND POUND FOOLISH”
This is a tip that can save you thousands of dollars, and an immeasurable amount of heartache! This is known as the pre purchase inspection. I strongly suggest you take this tip seriously, if want to protect yourself from being “taken for a ride”. I cannot stress the importance of having a skilled mechanic inspect a car or truck that you are seriously considering purchasing. This important tip will most certainly save you money and grief. Find a reputable mechanic, and have him look over the vehicle and road test it for you. It is worth the small amount of money if you have to pay for it, because it can save you untold amounts of cash in potential future repair costs. Most people are not adept at properly assessing the mechanical condition of a vehicle. That is why they have professional mechanics to take the guesswork out of it for you. I am not saying to run down to a mechanic with every car you are looking at, but narrow the choices to a couple of cars, or even down to one and get it done. If you want to take it to another level I also suggest having a skilled body repair man look at the vehicle. They can spot a car that has been painted, or has been in an accident usually within minutes, if not seconds. I will cover backround checks in the next paragraph, but the eyes on approach of a good body man can prove to be invaluable if something was missed on the reports(s).
BACKROUND CHECKS FOR YOUR “NEW TO YOU” PREOWNED CAR-“A VITAL STEP IN PROTECTING YOURSELF”
Let’s face it, nobody wants to spend more money than they need to when purchasing a car or truck. However, there are some things that should not be overlooked, and one of them is a backround check on a vehicle(s) that you are considering. This is a tool and resource, that should not be overlooked under any circumstances. The biggest name in this area is CarFax® Vehicle Reports which is a database of millions of vehicles. This invaluable service can uncover serious past problems of a used car that you are considering for purchase. CarFax® has many packages for paid reports, and even as little as one report if that is all you need. The second biggest name in that business is AutoCheck® Vehicle History Reports, which is also a database of millions of vehicles that can prove to be a wallet saver for you. These services can uncover things like accident damage, flood damage, odometer discrepancies, structural damage, service and repair history, lemon buy backs, branded/salvage titles, and more. You can never be too careful with these types of things, and you do not want to be in a situation where you purchase a vehicle only to find out later that there was a serious problem with the vehicle in the past. This can have a huge impact on your bank account and it will be far too late at that point. If you want to avoid being in a painful financial position, then i suggest you take advantage of these services. These are great services, but they are not fool proof and things can be missed in some instances which is why they have disclaimers. However, I still strongly recommend them, and I would even recommend getting both reports just in case something was missed by one of them.