I NEED A NEW CAR

Wow! That’s exciting. Who doesn’t love getting a new car. It doesn’t have to be new new, but new to you. It’s also a little, or a lot, intimidating. It’s a large purchase. They say that for most people, it’s the second largest purchase they’ll ever make. And if you’re not a homeowner yet, it will be the largest, at least so far. Where do you start? So many questions. What car should I buy? Is the car I like a good one? Do I qualify? How much do I need for a down payment? New or used? Buy or lease? It can be overwhelming but it doesn’t have to be. I’m going to show you a step by step plan that will make your experience, simpler, faster and hopefully fun and enjoyable with a final decision that you can be happy with for years to come. 

Homework

The first thing you need to do is figure out is what car you want to buy. One of the biggest complaints people have when purchasing a vehicle is how much time they spend at the dealership. Buying a car does take some time. It’s not like running in to get a gallon of milk. Don’t go in to the dealership at noon to buy a car if you have a dentist appointment at 1p. You’re going to be late for the dentist. Give yourself ample time to make sure you see what you want to see and get all your questions answered.

There are websites that will advise you to get pricing from 5-7 dealerships. Some of you will take the time to do that, others won’t. Depending on the market you live in, you may not have that many dealerships available to you. You may be someone who wants to look at numerous different models. Or perhaps you have it narrowed down to 1 or 2 that especially appeal to you. Some people arrive with a stock number in hand. Others know exactly what they want although they may not have a stock number. Others come in with no idea. They want to drive this, and that, car, truck, SUV. Those are usually the people that spend hours and hours at the store.

Nowadays, most dealers have pictures of every vehicle on their lot on their website including descriptions of the equipment. Once you have figured the model you want, then you can start to narrow down the exact options you want and start pricing. Check out the PRICING page for more info on that. The more time you spend doing your homework, the less time and the easier it will be at the dealership. Obviously you want to check everything out in person eventually like, colors, interiors etc….  And of course drive the car. But if you have a good idea of what you want in general, it will be to your advantage. 

You also need to do your homework on financing. What’s your credit score? How much can you qualify for? What will my insurance cost me?

CREDIT SCORE

The higher the credit score, the easier everything gets. Does this mean you have to have an 800 score to buy a car. No, of course not. However, the lower your score goes, the harder it gets. Lower scores pay higher rates. You may have to put more down or not qualify for the car you want. That’s reality. You can still get into a car with less than perfect credit. And you can still get a decent rate with fair-good credit. Especially if you have good car credit. There are different ways to get your credit score. My bank supplies my FICO score online as does American Express. Keep in mind that there are 3 major credit companies(TransUnion, Experian and Equifax). They may not have all the same scores for you as they may not all be receiving all the same information. Credit Karma uses different metrics so it may be different from the others as well. Some lenders may prefer one particular agency. Others may pull all 3 and take the highest. It’s a good idea to know your credit score at all times but especially if you’re looking at making a major purchase like a car or house. Once you have your credit score, then you can check with your bank or credit union to see what kind of interest rate you might get.

PAYMENT

How much can you qualify for? And realistically, what percentage of your income should you personally allow for a car payment? There is some gray area here. The better your credit and the more money you make, the more flexible the lender is going to be. A good rule of thumb is to try to keep your car payment between 10-15% of your gross income. There are a lot of things to consider here. What’s your housing cost? If you’re young, your insurance will be higher. How much down can you put? You don’t want to be car payment poor. If you make $2000 a month, you don’t want to be strapped with a $500 car payment. You need to eat on a regular basis. You probably wouldn’t qualify for that anyway. But you should be able to qualify for a $200-300 payment.

About Me

My name is Fred Byers. I currently reside in Pawhuska Oklahoma after spending most of my life in Denver Colorado. I’m retired. From what? Well, I had a quite diverse professional life. I actually started out in life in the construction industry. I started as what is known as a hod carrier,(does all the grunt work for masons) and progressed into a mason for about 10 years. When I was 31, I decided that I didn’t want to be a bricklayer in my fifties so I went to broadcasting school and became a radio disc jockey in Denver. I stayed on the air for 7 years and then got in to the sales end of broadcasting. I took a short break from that and sold cars for a while but returned to broadcasting and continued with that until I lost my job at the age of 59 and decided to go sell cars for the remainder of my working life. I was very fortunate to land a job with a good store, great company and worked with a good group of guys until I decided to retire. Selling cars is certainly not for everyone, but I enjoyed it and now want to use my experience to help you and others who find purchasing a vehicle to be stressful, intimidating and at times scary. Hopefully I’ll help make it a much more enjoyable experience.

Pricing

How much should you pay for that car? New cars are pretty easy to price out these days. There are a number of websites that offer pricing. To name a few, truecar.com, edmunds.com, nadaguides.com among others. It can get a little tricky though. The first thing you have to make sure of is comparing apples to apples. You may be at the dealership telling the salesperson that your neighbor didn’t pay that much for the same model they just purchased. Apples to apples. Easiest way to compare is MSRP to MSRP. If you think you’re buying the exact same car but your MSRP is $900 higher, than the vehicle you’re looking at must have more options. Keep in mind also, that perhaps your neighbor is fudging a little on what they paid. Everybody likes to think they got the best deal and it’s possible they’re fibbing a little. Manufacturers often times offer factory incentives on their vehicles. When you’re pricing the car out online, you may see $30,000 MSRP but the average being paid in your area is $24,900. A discount of $5100 off MSRP. It could be $2100 discount from the dealer and $3000 manufacturer rebate. However, the manufacturer may be offering an either/or discount. 0% financing for 60 mos./or a $3000 rebate. Which is better? There are a number of factors to consider here.  This is where knowing your credit score comes in handy. What credit score is needed to qualify for 0%? If you don’t qualify for the 0, but still qualify to buy the car, $3000 is a nice discount. If the manufacturer is offering 0%/or a $1000 discount, the 0% is probably the way to go. So a lot of factors to look at when determining best price. We’ll go into more detail in financing.