P E R S O N A L F I N A N C I A L M A N A G E M E N T P R O G R A M Car Buying Strategies.
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Transcript of P E R S O N A L F I N A N C I A L M A N A G E M E N T P R O G R A M Car Buying Strategies.
P E R S O N A L F I N A N C I A L M A N A G E M E N T P R O G R A M
Car Buying StrategiesCar Buying Strategies
C A R B U Y I N G S T R A T E G I E S 2
AgendaAgenda
•The Three Deals of Car Buying:
– The Purchase
– The Financing
– The Trade-In
•Legal Rights
•The Three Deals of Car Buying:
– The Purchase
– The Financing
– The Trade-In
•Legal Rights
C A R B U Y I N G S T R A T E G I E S 3
Deal #1: The PurchaseDeal #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?
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
At the Dealership:
Questions to Ask
Negotiating
Tricks of the Trade
C A R B U Y I N G S T R A T E G I E S 4
How much can you afford?How much can you afford?
•Know these key amounts:–Total price you can afford
–Down payment you can afford
–Monthly payment you can afford
•Know these key amounts:–Total price you can afford
–Down payment you can afford
–Monthly payment you can afford
C A R B U Y I N G S T R A T E G I E S 5
Preparing a Spending PlanPreparing a Spending Plan
Financial Planning Worksheet Handout
Financial Planning Worksheet Handout
C A R B U Y I N G S T R A T E G I E S 6
Debt-to-Income RatioDebt-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!
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!
C A R B U Y I N G S T R A T E G I E S 7
Determining Car Payments Handout
Determining Car Payments Handout
Determining Your Car PaymentDetermining Your Car Payment
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
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
C A R B U Y I N G S T R A T E G I E S 8
What Type of Car do you Want?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”
New
– Mechanical Problems - fewer
– Depreciation (10 to 40%)
– Warranties / Extended
Used
– Mechanical Problems - more
– Depreciation - less
– Warranties / “As Is”
C A R B U Y I N G S T R A T E G I E S 9
PerformancePerformance
•Consumer Reports Annual Auto Issue (April)
•Internet Websites(See Sources of Help)
– Service
– Repairs
– Safety Ratings
•Consumer Reports Annual Auto Issue (April)
•Internet Websites(See Sources of Help)
– Service
– Repairs
– Safety Ratings
C A R B U Y I N G S T R A T E G I E S 10
What about Insurance?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!
•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!
C A R B U Y I N G S T R A T E G I E S 11
Where will you buy?Where will you buy?
• New Car Dealership
• Used Car Dealership
• Car Buying Service
• Rental Car Agencies
• Bank Repossessions
• Newspaper Classifieds
• Individual Owners
• Internet
• New Car Dealership
• Used Car Dealership
• Car Buying Service
• Rental Car Agencies
• Bank Repossessions
• Newspaper Classifieds
• Individual Owners
• Internet
C A R B U Y I N G S T R A T E G I E S 12
Which Dealership?Which Dealership?
•Years
•Complaints
•Sales Persons
•Mechanics
•References
•Years
•Complaints
•Sales Persons
•Mechanics
•References
Professional Membership
– BBB
– NADA - New
– NIADA - Used
Professional Membership
– BBB
– NADA - New
– NIADA - Used
C A R B U Y I N G S T R A T E G I E S 13
Dealer vs. PrivateDealer vs. Private
Dealer
• Repair Plans
• Cost More
• Some ConsumerProtection
Dealer
• Repair Plans
• Cost More
• Some ConsumerProtection
Private
• No Repair Plans
• Cost Less
• Little Protection
Private
• No Repair Plans
• Cost Less
• Little Protection
•The Internet is a great resource, too!•The Internet is a great resource, too!
C A R B U Y I N G S T R A T E G I E S 14
More Buying OptionsMore Buying Options
Car Buying Services
• Defense Credit Unions
• NFCU
• USAA
• NCOA
• Auto-by-Tel
• Internet Resources
Car Buying Services
• Defense Credit Unions
• NFCU
• USAA
• NCOA
• Auto-by-Tel
• Internet Resources
C A R B U Y I N G S T R A T E G I E S 15
What is a Fair Price?What is a Fair Price?
•Public Library
•NADA Book
•Kelley Bluebook
• Intellichoice
•Consumer Reports
•Edmunds
• Internet
•Public Library
•NADA Book
•Kelley Bluebook
• Intellichoice
•Consumer Reports
•Edmunds
• Internet
What about…
Base Price?
Invoice?
Sticker Price?
Monroney?
Options?
Destination Charge?
C A R B U Y I N G S T R A T E G I E S 16
LeasingLeasing
Leasing vs. Buying Handout
Leasing vs. Buying Handout
C A R B U Y I N G S T R A T E G I E S 17
NegotiatingNegotiating
InformationInformation Trade-InTrade-In Money Down/Deposit
Money Down/Deposit DiscountsDiscounts
Like Car?Like Car? Shop TwinsShop Twins Paying by Cash
Paying by Cash OptionsOptions
Road TestRoad Test Extended WarrantyExtended Warranty
Best Time toBuy
Best Time toBuy
Take Your Time
Take Your Time
180-DegreeTurn
180-DegreeTurn
C A R B U Y I N G S T R A T E G I E S 18
Tricks of the TradeTricks of the Trade
Car Sale Tricks of the Trade Handout
Car Sale Tricks of the Trade Handout
C A R B U Y I N G S T R A T E G I E S 19
Deal #2: The FinancingDeal #2: The Financing
•Where to Finance
•The Cost of Money: Finance Charges
•Contracts
•Common Financing Pitfalls
•Where to Finance
•The Cost of Money: Finance Charges
•Contracts
•Common Financing Pitfalls
C A R B U Y I N G S T R A T E G I E S 20
Where to FinanceWhere to Finance
•Banks/Credit Unions
– Secured loans
•Dealerships
•Finance Companies
•The Internet
•Banks/Credit Unions
– Secured loans
•Dealerships
•Finance Companies
•The Internet
C A R B U Y I N G S T R A T E G I E S 21
Questions to Ask Car Dealers Handout
Questions to Ask Car Dealers Handout
Questions to Ask Car DealersQuestions to Ask Car Dealers
Special Dealer Promotions
and
Low-Interest DealerFinancing
Special Dealer Promotions
and
Low-Interest DealerFinancing
C A R B U Y I N G S T R A T E G I E S 22
The Cost of Money:Finance ChargesThe 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
•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
C A R B U Y I N G S T R A T E G I E S 23
The Purchase ContractThe Purchase Contract
C A R B U Y I N G S T R A T E G I E S 24
ContractsContracts
Read the Fine PrintRead the Fine Print
Credit/Life andDisability Insurance
Credit/Life andDisability Insurance
Truth-In-Lending
Disclosures
Truth-In-Lending
Disclosures
Taxes, License,Registration,
Title, Processing
Fees
Taxes, License,Registration,
Title, Processing
Fees
PhysicalDamage
Insurance
PhysicalDamage
Insurance
Power of the Pen
Power of the Pen
MechanicalRepair
Coverage
MechanicalRepair
Coverage
Don’t Leave Any
Blanks
Don’t Leave Any
Blanks
Car ProtectionPackages
Car ProtectionPackages
Take to Legal Before
Signing
Take to Legal Before
Signing
C A R B U Y I N G S T R A T E G I E S 25
Common Dealership Financing PitfallsCommon 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.
• 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.
C A R B U Y I N G S T R A T E G I E S 26
Deal #3: The Trade-inDeal #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?
•Trading vs. selling outright
•What is a fair price?
•What is dealer willing to pay?
•What if you owe more than it’s worth?
C A R B U Y I N G S T R A T E G I E S 27
Legal RightsLegal 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
•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
C A R B U Y I N G S T R A T E G I E S 28
Complaint ResolutionComplaint Resolution
•Dealer/Point of Sale
•Regional Manufacturer’s Representative
•Professional Associations
•State Attorney General/Office of Consumer Affairs
•Armed Forces Disciplinary Control Board
•Dealer/Point of Sale
•Regional Manufacturer’s Representative
•Professional Associations
•State Attorney General/Office of Consumer Affairs
•Armed Forces Disciplinary Control Board
C A R B U Y I N G S T R A T E G I E S 29
Sources of HelpSources of Help
Sources of Help Handout
Sources of Help Handout
C A R B U Y I N G S T R A T E G I E S 30
Print your Certificate
Click on the following link to add your name to the certificate and print it:
Car Buying Strategies