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"Take cars, as another example. Say you put $4,000 down to buy a new car worth $24,000. You finance $20.000. Say you are charged 10 percent interest for 48 months. Your monthly payments are $507.20. You have paid not $20,000, but over $24,000. Plus, you probably have zero in your bank account. So now you have a shiny new car with which to drive yourself to the job you'd like to leave but can't, because you have no money saved. Hmmmm. How about if you reversed this scenario and paid $4,000 for a good used car, then invested that same $500 a month for the same 48 months at the same 10 percent interest, compounding monthly? At the end of 48 months you would have a car plus $29,605.92 sitting in your bank account. Hello? Is anybody listening?" lol
Source: The Simple Living Guide, a book, by Janet Luhrs page 34.
By Carol from Wyoming, PA
Realize how big a purchase a car is. It's the second-largest purchase most people make after buying a home. When you buy a home, you have so much help: a broker to help you find the home, and a mortgage broker for financing. An inspector, an attorney, a title search, a mover, and more.
But when you buy a car, nobody is there to help you. And the dealers want you to THINK you can waltz in to the dealership and buy a car in an afternoon... and you can, but you will pay much more if you do. So, just take your time and do a little bit at a time.
By Robin Segal
One way that car sales people try to rope you into a quick sell is by creating the impression that you NEED to buy now to take advantage of some deal. Or if you wait a day, the car won't be available. Dealerships and salespeople are out to make a profit off your purchase, not find you the best deal. Take your time buying a car, do plenty of research, shop around and don't be pressured into buying a car quickly. When you buy a car quickly, the dealer almost always wins.
This is the best time of year (Dec.) to buy a car! With sales being slow and the salespeople needing to meet the end of the year quotas, you'll probably be able to save thousands!
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We're looking to purchase a new vehicle for the family. Does anyone out there have anything that they found useful/helpful when they purchased their vehicle or have any tips that have been passed down? Or anything at all that you think we should know? I really appreciate it. Thanks a bunch.
By Sadie Lynn from USA
Look at the ratings on Cosumer Reports:
Beside checking Consumer Reports, which is great for comparing the various models against each other, once you are ready to make a decision -- if your choice is between two or three different car manufacturers, please call you insurance agent and ask him to give you a quote for each vehicle your interested in. You'll find that even though all the cars are similar in features, one manufacturer may have better accident experience.
I've done this for my last two car purchases, one in 1998, the other in 2008. In both instances, I liked more than one of the models. After checking with my car insurance agent, I picked the one that saved me approximately $13 a month less than the other. That's an extra $190 a year!
Also, if you are getting a car that's been used - whether by a dealer or other purchasers, order a Car Fax report so you can be sure the vehicle wasn't in a major accident, a flooded area, etc. It's the smart thing to do now-a-days.
Can someone please tell me if there is a law in Alabama preventing a dealership from charging more than the car/SUV is worth? I was overcharged by several thousand dollars, promised a huge discount with a "voucher" I received (which wasn't applied to the contract). Is there a website I can go to for information about fraud laws in Alabama (automotive only)?
If you think you have been a victim of fraud, contact the Alabama state attorney general's office. They should have a consumer fraud division. They would be your best bet for advice, and whatever help they give you should be at no cost to you.
What do you mean be charging more than a vehicle is worth? What are you going by to determine that. Dealerships are in the business to make a profit, they are going to charge more than what they paid for the vehicle to begin with.
Many dealerships will try to encourage you to trade in an unpaid for car and buy a new one, by rolling the remaining balance into the new loan. There are some good financial reasons to avoid this practice, as it benefits the dealer more than the consumer.