Posts Tagged ‘buying a car’

Save Money When You Buy a Car

Tuesday, March 23rd, 2010

Things to know

Buying a car can be a huge burden on your wallet. You see young kids buying new cars with loans all the time. I have tips for everybody on this subject.

The first thing I suggest

My first tip is to buy an old car, never a new one. When you drive off the lot the car loses a couple thousand dollars in value. This means that buying a car that is a couple years old is going to save you thousands of dollars. It will be more expensive and less practical to buy a new car for your first car.

What you need second

For you first car you need to buy an old car. Chances are that you will sell your first car quickly. This means you probably won’t plan on keeping your car for long. The best way to save is to buy a car form the nineties rather than this year. If the first car you buy doesn’t work properly then the price will reduce significantly. You need to make sure the car is working well enough to last you through college or a few years of working.

The Third Tip I Have

Hopefully you can pay for your car in cash. If you are trying to buy someone’s car then cash is going to look a lot better than anything else to that person. Doing this will work with more than just cars, it will work with everything. Many people are going to sell you things for cheap when you have cash in your hands. If you pay in cash you need to get a contract. Being able to show proof of purchase will keep you protected.

Tip Number Four

Make sure that instead of taking out a loan, you save up for the car. Don’t take out more of a loan than you need to for your car. In the end you will appreciate your car more and save a lot of money. Paying back a car loan will cost you so much interest that it isn’t worth it. To buy your first car you need to take out as little loan as possible.

My fifth suggestion

If you are going to put so much money into a car then you need to take care of it. To help your car run long you will need to treat it right. Changing the oil should be done often along with checking the engine. Try to keep yourself from going on too many long trips with the car. Remember to keep it clean on the inside and outside. Hopefully this helps you to find a car that will run for a long time and will be inexpensive.


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Buying or Leasing?

Monday, November 30th, 2009

Buy or lease for a new set of wheels?

As is the case with every other common dilemma, there is no slam-dunk answer. Each option has its own benefits and drawbacks, and it all depends on a set of financial and personal considerations.

[Answers about buy or lease]

First, your finances. Affordability is clearly key, and you need to ask the question of how stable is your job and how healthy is your general  financial situation. The short-term monthly-cost of leasing is significantly lower than the monthly payments when buying: you only pay for“the portion” of the vehicle’s cost that you use up during the time you drive it.

If you have a lot of cash up front, then you can opt to pay the down payment, sales taxes - in cash or rolled into a loan - and the interest rate determined by your loan company. Buying effectively gives you ownership of the car and that feeling of “free driving” that goes on providing transportation.

For example, you want to get a car that’s a luxury model, but don’t have the cash to pay for it upfront, then you are better off leasing the vehicle. In comparison to buying, leasing won’t require you to have a huge amount of money for the down payment of a vehicle, allowing you to pay a smaller amount similar to interest rates that you get when getting a loan.

However, these benefits have a price: terminating a lease early or defaulting on your monthly lease payments will result in stiff financial penalties and can ruin your credit. You need to make sure you carve out the monthly lease payment in your budget for the foreseeable future, at least for the duration of the lease.   

car means to you: are you the sort of person to bond with the car or would you rather have the excitement of something new? 

If you want to drive a car for more than five years, negotiate carefully and buy the car you like. If, on the other hand, you don’t like the idea of ownership and prefer to drive a new car every two to three years then you should lease.

Next, factor your transportation needs: How many miles do you drive a year? How properly do you maintain your cars? If you answer is: “I drive 40,000 miles a year and I don’t really care much about my cars as I don’t mind dealing with repair bills”, then you’re probably better off buying.

Leasing is based on the assumption of limited-mileage, usually no more than 12,000 to 15,000 miles a year, and wear-and-tear considerations.

Unless you can keep within the prescribed mileage limits and keep the car in a good condition at the end of your lease, you might incurhefty end-of-lease costs.

Article by: [Mike B.] , find out more about [Here] .


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Leasing A New Car

Monday, October 26th, 2009

Getting a new auto always involves decisions.  Pay cash or finance?  Buy or lease your new car? 

There’s no right or wrong answer.  Cash upfront, financing, and leasing all have benefits and disadvantages.  As is the case with each other common dilemma, there is not any slam-dunk answer.  Ultimately it boils down to personal choice and a collection of basic financial issues. 

First, affordability is clearly key.  How how stable is your job?  How good are your finances?  If cash flow is a concern then leasing with its short term regular payments is a good option.  With a lease, monthly costs are seriously lower than payments when purchasing.  Of course , with a lease you just pay for a fragment of the vehicle’s’s cost — the part used up in the time you drive it. 

buying an auto with cash is a choice of course.  Or you could decide to make a giant downpayment and still lease of finance.  You could decide to pay the down the payment or sales taxes and charges.  Otherwise all of these extras are rolled into the loan. 

With any type of financing the IR is set by the bank and lendor.  It pays to shop around for a good rate.  Often the dealer has special financing but many times your local bank is the best shot. 

Suspect you want to get into luxury models but can’t afford the initial cash to buy the car.  If you’ve got a good job and credit you are likely a good applicant for leasing.  Unlike buying, leasing gives you the choice of not needing to fork out the down-payment upfront.  And the rate of interest will be similar to what you would pay if you bought the car but you’ll only be financing a fraction ofthe total car costs. 

Leasing does have its hazards though.  Terminating a lease early or defaulting on your monthly lease payments includes stiff fiscal penalties.  Your credit could be ruined.  As with any loan or financing, you need to ensure you carve out the monthly lease payment in your budget for the obvious future, at least for the duration of the lease. 

Besides the financial aspect, making a buy or lease decision relies on your own particular lifestyle choices and preferences.  Think about what the car means to you : are you the kind of person to bond with the vehicle or would you rather have the fun of something new?  If you want to drive an auto for at least 5s years, negotiate carefully and buy the automobile you like.  If, on the other hand, you don’t like the idea of ownership and wish to drive a new car every 2 - 3 years then you need to lease.  Next, factor your transport wants : How many miles do you drive a year?  How correctly do you maintain your cars?  If you reply is : “I drive 40,000 miles a year and I don’t truly care much about my cars as I do not mind dealing with repair bills”, then you’re probably better off buying.  Leasing is based on the presumption of limited-mileage, usually not more than 12,000 to fifteen thousand miles a year, and wear-and-tear considerations.  Unless you can keep within the prescribed mileage boundaries and keep the auto in a good shape at the end of your lease, you could suffer hefty end-of-lease costs.

Read more: discount auto insurance


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A Fresh Perspective on Buying A New Car Versus Leasing

Sunday, September 27th, 2009

In the past, we’ve looked at the “buy versus lease” equation from the perspective of a relatively healthy economy. In a robust economic environment, there are more benefits to purchasing a vehicle than leasing one. The only exception is the inability to drive a new car, truck, or SUV every two or three years. Because of the thoroughly ravaged economy, it is worth taking another look at the comparison.

Here we will approach the issue first by revisiting how the leasing process works. I'll describe the key factors that influence which deal is more appropriate during this sluggish economy. I’ll also explain a few of the dynamics that have changed in the industry over the past year.

How The Process Works

The negotiations for a lease are similar to those when purchasing a vehicle. After choosing the model you'd like to drive, you and the dealership need to agree on the price. This price is referred to as the capitalized cost. Much like your monthly payments on the purchase of a car are based upon a financing interest rate, your monthly lease payments are based upon a money factor. Incidentally, dealerships often try to obfuscate the money factor in the same way they obfuscate the interest rate. That should imply the importance of negotiating this factor upfront.

In addition to the purchase price, you and the dealer will agree upon a residual value. This is the value of the leased vehicle at the time you return it to the dealership. The lease agreement will detail annual mileage caps, maintenance items, turn-in fees, and other factors that can be negotiated.

Does Today’s Turbulent Economy Change Things?

The question is whether it makes more sense to choose a leasing arrangement over buying a car outright given the current recession. Indeed, the industry has gone through significant changes over the past couple of years. Credit markets have tightened, which has made it far more difficult for consumers to qualify for auto loans. Automakers and dealerships have responded by expanding their lease portfolios.

For a certain type of prospective car buyer, leasing arrangements are more attractive than ever. Not only are dealers more willing to offer better terms, but buyers who may want to get rid of their vehicles after a few years can simply turn them back into the dealership. They won’t be forced to unload their vehicles on a soft market.

The Frugal Driver Is Better Off Buying

Even though some leasing terms offered by dealerships are advantageous, most frugal drivers will be better off buying their vehicles outright. After depreciation, the cost of an occasional repair and the replacement of worn parts if far lower than a perpetual string of monthly payments.

The lease industry has become more attractive for the buyer that places a high value on driving a new car every few years. For most drivers, buying and maintaining the same car for its driving life is far less expensive.


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