YourHub.com \\ Amherst, Clarence \\ Blogs \\ Business & Finance \\ Local Business

Blog Entry 2 of 2 Tips for Car Buyers

Welcome to my "Tips for Car Buyers" blog. Among my experiences in life, 7 years of Automobile Sales were amongst some of the most interesting and challenging. I have met every type of person and personality imaginable while selling cars, but I learned to listen twice as much as I talked. No longer in "the car business", I do have some wisdom to share and pass onto you. From a new salesperson learning the ropes in Charlotte NC to running an entire Internet Sales Division at a major WNY dealership, I hope you will be able to take just one thing from this blog: Keep your sense of humor!

Blog Url: http://buffalo.yourhub.com/~TipsforCarBuyers

This WILL change your life!

e-mail to a friend | print this | link to this

NEXT › ‹ PREVIOUS

Contributed by: Chris K on 8/29/2007

I'm going to tell you some stuff about buying a car, and make some points that nobody else has ever told you. Finally you will have perspective and might be able to put more money where you really need it in life, and not into your vehicle.

I have seen every website that talks about buying or selling cars from Australia to Zaire, Alabama to Alaska. You name it. Over the years my ears have listened to people in person, on the radio and TV all over the country tell me how to buy and sell a car. It's a cookie cutter world and I never hear good advice, just the same stuff repeated over and over. All I have to tell people is to "have fun buying a car, and keep your expectations low". Spending money on a car is for most an emotional experience, so why make it more difficult on yourself. But you spend money on your car almost everyday! So don't make the purchase such a big deal. Many buyers like to play games with salespeople, can be terrified venturing onto a dealership, and do it several times until they buy a car - if they do at all. Many salespeople look at prospects as Chess pieces and are waiting for a check-mate position, and are also terrified they will not make another sale today. But what they both see are huge dollar signs in each others eyes and a big question mark above their heads.

Bottom line is if you are going to buy a car, someone is going to make money. Guess who they are? Chances are in New York State the largest beneficiary of almost all sales will be the Tax Man both State and Federal. The banks can be number 1 in most cases, but I set them at number 2, and the tax man wins (I'll get into it later). The manufacturer is usually number 3., and the dealership is number 4. The salesperson is number 5 and is the paid the least amongst all the other entities involved. Don't make salespeople sweat too much, you have bigger issues at hand, and besides I'll show you how to get the best price in upcoming blog post. Let's now look at a term I coined called "Real Monthly Vehicle Cost" and how reality has eluded so many. It's here where I will arm you with powerful insight into vehicle ownership. Most people really are in-over-their-heads with their vehicles. Whether you pay cash for a car or finance, you will have 4 payments: (1. The full price of the car or the down payment, then the monthly cost 2. The taxes. 3. The insurance. 4. Fuel) Let's talk about reality for a second. Most people who finance only look at the monthly car payment. Most people forget that there will be other costs which could far exceed that of the actual car payment, and those costs are Fuel and Insurance.

So let's talk about what your budget is just so I can give you the big picture and the reality of how expensive it can be to finance. If you buy a new truck for $20,000 with $500 down, financed at 8% for 5 years with a County Tax rate of 9%, you will have a payment around $432. You will have 2 more monthly payments! Next let's add the cost of insuring that pretty new truck. The average new truck will cost about $1,200 a year to insure depending on your record, or age. I'm being conservative, so let's add $100 a month to the "Real Monthly Vehicle Cost". You are now paying $532 each month for your new truck, but wait, there's more! Next we will add fuel costs, the final monthly payment on your vehicle. Your new truck gets 15 miles to the gallon on a good day, and you travel everywhere in it. Gas is $3.00 a gallon and you drive about 1,000 miles a month. Well that amounts to $333 a month in your fuel cost. So let's just go ahead and add that to the $532 (payment and insurance) and you now discover you are paying $865 a month for that $20,000 truck! Yippee! That is $865 after taxes or about $220 a week. The bad part was, when you bought the truck, you only looked at the $432 and new you could swing it, but after further review, it's like twice as much with my "Real Monthly Vehicle Cost" formula.

So this is where the rubber hits the road, and hopefully some reality shakes some sense into the true costs of vehicle ownership for you. It effects our lives and interferes with money we need at more important areas, such as children, debts, housing, food and more.

Here's how I got my "Real Monthly Vehicle Cost" down. I personally did a 48 month GMAC SmartBuy on a brand new 2005 Chevrolet Malibu with a 4 cylinder engine. I don't care about mileage because when the term is up, I have a guaranteed buy option for under $7,000. Then I refinance, and get a lower payment. It will become mine one day. I get 35 to 39 MPG at 55 to 70 MPH. I get 26 MPG average. I put No Money Down. My car has an excellent crash rating and superior insurance rating so it's cheap to insure. My total car expenses are around $400 a month and I drive much more than 1,000 miles a month.

The most important message for this post is to be diligent when you consider what you can afford each month, and ask yourself if you really need a big gas guzzling SUV, truck or van. Consider another option like a roomy 4 or 6 cylinder car. If you need space occasionally like on a trip, consider renting a van. After all, you will have 3 monthly payments, and it's better to keep them low so you can actually afford to go on a trip, and make it a good one!

Here are a few good links to look at:
Dave Ramsey's Website
Interest.com Auto Loan Calculator

< Previous: 'So easy, a Caveman can...' | Next

[Report this as objectionable content.]

SUBMIT COMMENT

Rate the above blog