How to Purchase Your Next Car with Confidence.
The №1 Way To Loose Cash When You Buy a Car.
The №1 way to loose a bundle of money when buying a car is to buy only what you want, and not take a few minutes to extricate yourself from those wants to determine if what you want will conform to and compliment what you need.
What type of transportation do you need?
Think about this for a minute. You might need reliable and affordable transportation, but you probably want that transportation to be stylish don’t you? We all want to look better, impress our friends, and enjoy a bit of luxury. There’s absolutely nothing wrong with that, but it will probably save you some money if take a moment to step outside yourself, and analyze what you need first, and use that analysis to temper your wants.
Try to avoid impulse buying on such a huge expenditure as an automobile. No matter what someone is trying to sell you, the salesperson who is successful at making a lot of money is the person that whetted your appetite for benefits (wants), and backed those benefits up with features (needs).
The salesperson might say “Think of all the money you’ll save on gas. This model gets 29 miles per gallon.” Right there, the salesperson buttered you up with a benefit, and backed it up with a feature.
When companies sell weight loss products, they don’t say “Losing weight can help prevent heart disease” They say “Summer is right around the corner. This product will help you look great in a swimsuit. It can help you lose 15 pounds in 30 days”
See what I mean? Keep an eye out for this type of wordplay from any car salesman you might be talking to. There’s nothing wrong with them trying to make the sale in the manner they have been trained to do, just don’t let it lead you astray from what you have already pre-determined is a good, rational balance between;
- What you need and,
- How you have tempered your needs with what you want.
Here’s a few items that you can consider when you “Step outside yourself” and determine what kind of car (or truck) you need.
The first test is to honestly determine whether it is more financially sound to have your present vehicle repaired. If it is going to cost more than 50% of the current retail value of your car, then it’s a good idea to get another one.
What features best suit your needs? Does it snow a lot where you live? If so maybe you should look for models with 4 wheel anti-lock brakes. A 4 wheel drive is also something that is much safer in snowy conditions.
Do you live in Florida? You’ll most assuredly need air conditioning.
Do you have back problems? Look for a model with lumbar support that suits that particular need.
Do you have four kids and two dogs? If so then get that Mustang convertible out of your mind at this time and start considering a van or large SUV.
Of course make sure beforehand that the product (of your need tempered with your want) will fit into your budget. The monthly payment should
NEVER exceed 8% of your gross monthly income.
My gross monthly income is $_________________X 0.08
My maximum monthly payment is _____________
Also, a good rule of thumb to use in calculating your monthly payment is to use $25 X each $1,000 borrowed.
I.e.: If you finance $20,000 then your monthly payment should be very close to $500. Of course I’m going to tell you how to find the best interest rate, and if you qualify for a very low interest rate, then that may get your monthly payment down to less than $25 per $1,000 borrowed. Using the $25 factor per thousand borrowed (rule of thumb) is a good way to keep you on the side of budgetary caution.
While we’re on the subjects of money and needs, you should also take into account that if you get what you want, and justify (to yourself) a huge monthly payment, then that can have an adverse affect on some other true needs, such as your children’s college fund, health insurance, retirement savings etc.
Now, hopefully you are in the correct frame of mind. You’ve stepped back and you’ve gotten that extremely expensive “Dream Car” out of your mind.
You’ve analyzed that what you need is
- Reliable
- The features that will serve your needs best.
- Affordable.
Every person is unique in not only their needs, but also in their wants. I think it’s safe to say that almost everybody wants to look successful though. When someone buys a new car, one thing that is certainly going through their minds is how their friends and family will see them as at least “doing OK”.
This site is all about saving you money, so while we all have our wants, don’t let the “want to look good” or any other kind of peer pressure cause you to transfer several thousand dollars from your bank account to that of a car dealer.
That’s what this whole beginning process is about. Remember to remain “outside yourself looking in” when you consider your wants, and make sure those wants conform to and compliment your needs, not the other way around. That’s the #1 mistake that most people who lose a lot of cash make when buying a used car.