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MyFinanceOnline
Patrick West
UAB School of Business
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With the cost of both new and used cars, it is important that you are educated about buying a car. In this personal finance video series, we cover important topics such as doing your research, automotive terms, invoice pricing, negotiating a price, closing the deal, buying a warranty, trading in your car, low or no interest financing and much more.
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What should you consider when purchasing a new car? You are purchasing transportation and whether it is new or used is up to you. |
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Should you buy a new or used car? No matter what you decide the important thing is to get as much value out of your car as possible. |
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You go to buy a car and the car salesman starts talking a different language. In this personal finance segment, we cover some of the automotive terms and what they mean to you. |
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What you pay for a car can depend on the demand for that car. If the demand is high, you will probably pay the invoice price. If the demand is low, you will probably pay much less than the invoice. Profit isn't a bad thing for a dealership, you just want to pay a fair price for your car. |
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Most people purchase a car every 5-6 years, while most good car salesmen sell about 20 cars a month. Do the math-a salesman may sell 1200 cars between the time you buy a car, so who do you think is better at the car buying and selling process? |
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It is important to do your research as you get ready to purchase your next car. By using the internet, you can find out as much information as you want about a specific manufacturer's car. |
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In this personal finance segment, we cover some tips you should consider when you are negotiating the price of your next car. You may want to get a price quote from the dealership, then fax them back a counter-offer on what you will pay for the car. You can get more leverage in your negotiation if you are away from the dealership. |
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Have your salesman tell you what you will be offered at the closing table, such as financing offers, warranties, etc. Get a copy of the warranty to look over and not a sales brochure. You don't want to be pressured into making a quick decision on a product you haven't had a chance to study. |
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Purchasing a car should be a business decision, but for most people it is an emotional decision. You must always be prepared to walk away from the deal and not feel bad about doing so. If you feel that you can't walk away, you may end up buying the car on the dealer's terms and not yours. |
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Before you consider trading in your car, look on the internet and see what you car is worth. You must be realistic about the condition of your car. Know that you will get less if you trade it in versus selling it yourself, but selling it yourself can be a hassle. |
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The trade-in should be a separate transaction. If you have gotten all of the value out of a car, you may want to consider donating it to a reputable charity, instead of trading it in. A charity might have a good use for you trade in and besides feeling good about the donation, you may get some tax advantages. You should check with your tax advisor to find out more. |
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You see the TV commercials about low or no interest financing and it sounds good, but you need to understand what you are giving up to get these special interest deals. |
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