CAR BUYING

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CAR BUYING
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90 of people in our culture purchase things they
cant afford.

• To impress people they do not like.
• Dont be one of them!

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It is said

• The car payment is the curse of the middle class.

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How do they convince you?

• http//www.pbs.org/wgbh/pages/frontline/shows/pers
  uaders/view/

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Affording the Car

• Save up until you can purchase with cash.
• Take out a personal loan
• Finance through the car company
• Lease the car with out a down payment.
• Mom and Dad buy it.

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To Get A Car Loan

• You need to have a past credit history
• or
• You need to have someone co-sign.

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What is a Co-Signer?

• Someone who is willing to guarantee your ability
  to pay off the loan. If you fail to pay they are
  legally responsible for the sum of the loan and
  will have to pay it in full.

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What is FICA?

• FICA stands for FAIR ISAAC CORPORATION. It is a
  score-based system that companies use to measure
  an individuals credit risk.

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Your FICA score is tabulated by

• 35 Debt history
• 30 Debt level (your ability to pay debt)
• 15 How long you have maintained debt
• 10 Type of debt you hold
• 10 New debt (you need to get new debt every 6
  months)

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In order to maintain a high FICA score what do
you have to constantly have?
DEBT!
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FICA Cont.

• In order to maintain a high FICA score you need
  to constantly purchase more than you can afford.
  There are ways around the higher interest rates
  but you do have to be creative.
• Put in a bigger down payment
• Use an underwriter (someone who writes your loan
  based on your ability to pay looking at things
  other than credit scores.)
• Pay cash

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Leasing the New Option
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Do the Math

• New cars paid with cash results in 82.00 profit
• New cars financed result in 775.00 profit
• New cars leased result in 1,300.00 profit
• What would you sell?!

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Do the Math The Break Down

• If you (rent) lease a car with a value of 22,000
  for three years, and then turn it in the car is
  only valued at 10,000, someone has to cover the
  12,000 loss.
• Your lease payments are designed to cover the
  12,000 in 36 months plus a profit this will
  equal over 333.00 a month.
• Bargain?!?!

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Did You Know?

• The Auto Industry does not have to disclose the
  amount of interest they are charging you with a
  lease.
• This is usually monitored by the FTC but they
  dont have the power here because you are
  renting not purchasing your car.
• The average leasing interest rate is 14

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Dont Forget the Tiny Numbers

• If you go over the allotted miles you are charged
  around 10-17 cents a mile.
• Excessive wear and tear will penalize you too.
  Now you have to pay money just to walk away for
  your car rental agreement.
• WHY?!?

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To Keep You Coming Back!

• Hey let me help you out. I will just roll in the
  charges for your last car into this brand new
  beauty, for only an extra 13.00 a monthWhat a
  deal

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The Excuses
But...
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Warranty

• Some people want to buy a new car for the
  warranty. If you loose 17,000 of value over
  four years, on average you have paid too much for
  a warranty. You could have completely rebuilt
  your car twice for 17,000!

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Picking Out Your Baby

• Resources to use

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Comparing Loans

• What to look for

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How to Negotiate the Deal
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Sources

• Created By Chantel Sukraw
• Resources
• Dave Ramseys
• Total Money Makeover
• Financial Peace