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Car Buying Strategies. Agenda. The Three Deals of Car Buying: The Purchase The Financing The Trade-In Legal Rights. Deal #1: The Purchase. Do Your Homework: How much can you afford? What type of vehicle do you want? Where will you buy? What is a fair price? Should you lease?.
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Agenda The Three Deals of Car Buying: The Purchase The Financing The Trade-In Legal Rights
Deal #1: The Purchase Do Your Homework: • How much can you afford? • What type of vehicle do you want? • Where will you buy? • What is a fair price? • Should you lease? At the Dealership: • Questions to Ask • Negotiating • Tricks of the Trade
How much can you afford? Know these key amounts: Total price you can afford Down payment you can afford Monthly payment you can afford
Preparing a Spending Plan Financial Planning Worksheet Handout
Debt-to-Income Ratio Percent Status Less than 15% Some additional credit may be used with caution. 15% - 20% Fully extended. 21% - 30% Overextended. More than 30% Seriously overextended. Seek help!
Determining Your Car Payment Determining Car Payments Handout Your Car Payment Should Be No More Than 25% of Net Income Total 15 % to Payment 10% to M-I-O-T Maintenance Insurance Operating Expenses Taxes
What Type of Car do you Want? New Mechanical Problems - fewer Depreciation (10 to 40%) Warranties / Extended Used Mechanical Problems - more Depreciation - less Warranties / “As Is”
Performance Consumer Reports Annual Auto Issue (April) Internet Websites(See Sources of Help) Service Repairs Safety Ratings
What about Insurance? Get insurance quotes Figure into spending plan Raise deductible to lower premium Check your credit report Avoid lapses in coverage Be a safe driver Can cost more than car payment!
Where will you buy? New Car Dealership Used Car Dealership Car Buying Service Rental Car Agencies Bank Repossessions Newspaper Classifieds Individual Owners Internet
Which Dealership? Years Complaints Sales Persons Mechanics References • Professional Membership • BBB • NADA - New • NIADA - Used
Dealer vs. Private • Dealer • Repair Plans • Cost More • Some ConsumerProtection • Private • No Repair Plans • Cost Less • Little Protection • The Internet is a great resource, too!
More Buying Options Car Buying Services Defense Credit Unions NFCU USAA NCOA Auto-by-Tel Internet Resources
What is a Fair Price? Public Library NADA Book Kelley Bluebook Intellichoice Consumer Reports Edmunds Internet What about… Base Price? Invoice? Sticker Price? Monroney? Options? Destination Charge?
Leasing Leasing vs. Buying Handout
Negotiating Information Trade-In Money Down/Deposit Discounts Like Car? Shop Twins Paying by Cash Options Road Test Extended Warranty Best Time to Buy Take Your Time 180-Degree Turn
Tricks of the Trade Car Sale Tricks of the Trade Handout
Deal #2: The Financing Where to Finance The Cost of Money: Finance Charges Contracts Common Financing Pitfalls
Where to Finance Banks/Credit Unions Secured loans Dealerships Finance Companies The Internet
Questions to Ask Car Dealers Questions to Ask Car Dealers Handout Special Dealer Promotions and Low-Interest Dealer Financing
The Cost of Money:Finance Charges Interest Add-on $1000 for 1 year at 12%: $120.00 finance charge Simple $1000 for 1 year at 12%: $66.19 finance charge Usury laws
Contracts Read the Fine Print Credit/Life and Disability Insurance Take to Legal Before Signing Physical Damage Insurance Power of the Pen Truth-In-Lending Disclosures Taxes, License, Registration, Title, Processing Fees Mechanical Repair Coverage Don’t Leave Any Blanks Car Protection Packages
Common Dealership Financing Pitfalls Don’t know your credit rating Overspending at dealership Don’t know current interest rates Not pre-approved for financing Assuming zero-percent loan delivers biggest savings “Intertwining” the deal Too worn out to check the numbers Feeling rushed, pressured or confused.
Deal #3: The Trade-in Trading vs. selling outright What is a fair price? What is dealer willing to pay? What if you owe more than it’s worth?
Legal Rights State Lemon Law Consumer Leasing Act Odometer Reading Used Car Buyer’s Guide “As Is” vs. Implied/Expressed Warranty Magnuson-Moss Warranty Act State Auto Repair Facilities Act
Complaint Resolution Dealer/Point of Sale Regional Manufacturer’s Representative Professional Associations State Attorney General/Office of Consumer Affairs Armed Forces Disciplinary Control Board
Sources of Help Sources of Help Ha ndout
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