Finance - How To Beat The Auto
Dealers |
By Michael Russell |
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Finance. Pretty broad term. If you look up the word finance in the
dictionary you will find the following definitions.
Noun
1. The science of the management of money and other assets. 2.
The management of money, banking, investments, and credit. 3.
finances Monetary resources; funds, especially those of a
government or corporate body. 4. The supplying of funds or
capital Verb
1. To provide or raise the funds or capital
for: financed a new car. 2. To supply funds to: financing a
daughter through law school. 3. To furnish credit to.
Certainly more than enough material to cover. An associate of
mine in the early years of his career after graduating college
with a finance degree spent a good number of years in this
field. He certainly has a wealth of knowledge to share on a
variety of financial topics. So in this first of a 3 part series
he is going to enlighten you on the verb side of this equation.
More specifically definition number 1. To provide or raise the
funds or capital for. Like financing that brand new car of
yours. He offers this observation and advice.
Financing
anything can be a costly proposition especially if you don't
know what you're doing. This is especially prevalent in one area
especially, financing a new car.
Rather than bore you
with a lot of information that you don't need I am going to
provide you with what information you DO need so that when going
to finance that brand new luxury sedan it doesn't end up costing
you a fortune.
1. The first thing you have to do is
determine your financial situation. How much can you afford to
pay each month? Financing a car is a long term proposition. Most
new car loans run for about 60 months, or 5 years. That's 5
years of your life that you need to be prepared to meet a
financial obligation or your car ends up repossessed So don't
finance a payment that is more than what you can afford each
month.
2. Decide what car you want and what you'd be
willing to accept. Maybe you want that new Lexus but at $1200 a
month financing it's just way beyond your means. Maybe that $500
a month Chrysler is more in your pocket book range. Sometimes we
have to settle for what we can afford. Remember, a car is a
means of transportation. You spend less time in your car than in
your place of employment or your home. Maybe you just want to
get something that will get you to where you want to go.
3. Do your homework. There are a boat load of car dealerships
out there. Don't just settle for the first one you see. Shop
around. Compare prices of competing dealers. Many times if you
bring an ad in from a dealer that is offering the car you want
for less money you can get an even better deal from the second
dealership. Don't worry. Everybody does it.
4. Don't
settle for the rate the dealer gives you when financing your
car. Ask him what the buy rate is from the finance company. If
you think that rate is too high tell him you want him to try
another finance company. If you're still not happy with the rate
then try your local bank. Many times you can get a better rate
just by looking around.
5. Don't let the dealer load you
up with things you don't need like a tow package, undercoating,
rust proofing and a lot of other junk. This will just add to the
price of the car and the amount being financed.
6. Put
down as much as you can afford. This will lower the amount
financed and therefore lower your monthly payments.
If
you follow these simple 6 steps you will find that you end up
leaving the dealership with a monthly payment you can live with. |
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