Posted by @Yanet Cross on our Facebook Group
Because I have seen so much incorrect information being shared about New Car Purchases, I have compiled a Basic List with the knowledge that I have gained throughout these years when it comes to this. Educate Yourself People. Don’t fall for the 🍌 in the fucking tailpipe. Anything i say, can be Researched. Don’t believe me, just Google it boo. I am not in the business of giving out wrong information!
So, on to the List. Let’s get you Informed.
- First thing first, Get your credit in order. The thicker your credit file, the lower your Interest rate. You never want to get into a loan where you pay more on the interest & less on the principal.
- Budget for the car. Buy a car you can afford. The rule of thumb is to not spend more than 15% of your monthly income on the total cost of the monthly vehicle expense. Your loan payment isn’t the only expense that you incur monthly for the car. You need to take into account the insurance premiums, GAP Insurance, maintenance costs, and fuel. Don’t forget to add toll fees as well as licensing fees & registration fees to your calculation. You don’t want your car to be one of the primary monthly expenses, especially since it’s likely to depreciate.
- Get pre-approved before going to the lot so that you don’t have to give the dealerships your information. However, if you decide to not get pre-approval, let’s discuss Inquiries. Dealerships have been known to run your credit multiple times with different lenders giving you hella inquiries. For example, if your credit is run through 25 lenders in that one day, you will have 25 hard inquiries. If the next day you go to another dealership and they run your credit 20 more times, you will have 20 more inquiries. That’s a total of 45 hard inquiries in just those 2 days and by Federal Law, you will have ALL 45 inquiries listed on your file and they will remain listed on your file for 2 years; HOWEVER, because those inquiries were for shopping around to find the best rate and were done within 30 days (used to be 14 days)- those 45 inquiries listed will only hold the weigh of 1 Inquiry when it comes to your Fico Score. This goes for Auto & Mortgages. The inquiries are reported individually but are factored into the algorithm as 1 if done within a certain time frame. Read this twice or three times until you understand it please and don’t let nobody tell you different or confuse you!
- Take your Time and Research EVERYTHING on the type of car you want to purchase. You can find out just about anything you want to know about a car online. Edmunds, NADA, Consumer Reports, and Kelley Blue Book are great places to start researching cars in your price range. If you are considering buying a new car, your goal is to find the “invoice” price of the car, not the MSRP. The “invoice” price is what the dealer paid the manufacturer for the car. This research will come in handy once the price negotiations begin.
- Never feel pressured to get something you don’t want just because they say it’s a good deal. Never leave the lot with a vehicle you do not want. Remember, you will be stuck with this vehicle for a few years!
- Everything is Negotiable. This is why you do your research prior to going to the dealerships and why you research vehicle prices, rebates, discounts, military rebates, etc.
- Get Quotes from several different dealerships. You don’t have to visit them, you can do this online, by calling, or by sending an email. Always shop around!
- Always Test Drive the vehicle, get a Vehicle History Report AND an Inspection. Don’t rely on the dealership inspection. The inspector needs to place the car on a lift to inspect damages underneath, which cannot be detected when the car is on the ground. If it means making the sale, the dealership should be happy to oblige. Dealerships that object to the inspection may have something to hide. The inspection cost is estimated between $50 and $100 dollars, but even if it’s higher, the expense is worth it. The inspection will reveal any repairs that the dealership needs to undertake, as well as an unreported accident.
- Be prepared to walk away if you don’t get what you want! Never rush to purchase a car. Don’t buy a car based on emotions. The first visit should be reserved to gather information about the vehicle, as well as to test drive it. Once you’ve acquired the necessary information, you need time to get a second opinion, hire an impartial inspector, and make a logical decision. Don’t worry about losing the purchase because you didn’t buy it the same day. If it’s meant for you, it’ll be there when you return.
- Know your Fees: Whether you obtain financing or pay cash for the vehicle, you’ll incur additional purchase costs as well as post-purchase costs. Most buyers aren’t aware of the exact amount of the purchase fees. Some salesmen add it to the car finance, which alleviates the financial blow that you suffer when making a purchase but bears the cost with the monthly installments. Don’t be afraid to ask the salesman about the dealership fees. These are usually hidden from you and become evident after you sign the papers. Ask the salesman for a breakdown of the purchase fees, which should include sales tax, registration, and documentation fees, as well as the dealer-specific fees. The running costs are vital, and the you need to know the breakdown of each cost. Expenses such as fuel consumption and maintenance run into thousands of dollars per year. The fuel cost should be easy to estimate if the driver knows the car consumption and average miles traveled in a month. For the maintenance costs, You should ask the salesman for a maintenance report of the vehicle.
- Always check the warranty, if any. Don’t purchase extended warranty if it is already included in your loan. Don’t know, ASK!
- Buy based on purchase price, not monthly payments. The worst thing you can do is over pay on a vehicle that is not worth it and then be Upside Down as soon as you leave the lot.
- If you purchase New, protect your asset. Always get GAP & FULL coverage Insurance. GAP, which means Guaranteed Asset Protection, is the difference between the actual cash value of a vehicle and the balance still owed on the financing. You don’t want that balance to hit your credit & drop it!
🎤🎤Final thing and the MOST IMPORTANT thing: READ ALL DOCUMENTS BEFORE YOU SIGN, NOT after😒. If you don’t understand what you are reading, ASK. Get a second opinion. Don’t sign unless you are comfortable with ALL TERMS. 🎤🎤
Hope I have educated You & You learned something new. Knowledge is Power my people. Stop allowing others to take advantage of you because you are not informed.