How do you make decisions when a major purchase is looming?

Sometimes you have a month or a few weeks to collect some information and cost totals.  Sometimes it is a more of an emergency situation.  Your car breaks down and there is no other way to get to work for example.  You may not have a lot of time to collect the information to go ahead with such a purchase.  Often I hear that individuals go to a dealer and take whatever is offered.  They often ask to see something in a practical price range, but often are steered to something pricier that they can not live without.  In getting the vehicle home, they find that the payments have far exceeded their ability to pay monthly.  Often enough, they take whatever financing is available as well as a warranty.  

So what should you do? It is important to know what your FICA Score is before doing any financing.  This score determines your interest rate.  You may notice a disclaimer on an advertisements, "well qualified buyers" for the low rates.  This is what they are referring to.  You should contact your bank or credit union to see what type of a loan they will offer you.  Also try AAA.  They will also assist you in the purchase.  The car dealership will steer you towards their financing as they get a cut.  They also get a cut by selling you the extended warranty.  Here is where you set the limit for the cost of the vehicle.  Never exceed this cost and keep it affordable.  Next, consider a used vehicle with low miles.  Many dealers certify previously leased vehicles at a great savings.  These vehicles have low mileage and are certified for the remainder of the warranty.  They often have many "bells and whistles" for you to enjoy.

Dealers...  They make their living from commission.  They will do whatever it takes to get you into that car immediately!  Be ready, take your time.  They will try to make every car affordable to you by extending the terms of the loan.  For example, you plan to spend $15,000 for the vehicle.  You should not go more than 36 months with the term of the loan, 48 if it is the only way. (thus the used vehicle).  The dealer may offer you the brand new model loaded.  He will make it affordable and keep it within your budget, BUT the term of the loan is now 60, 66 or 72 months!  Walk away.  Stay your ground.  Hopefully you have looked up a vehicle on Edmunds.com to find out the expected price.  It is tempting to take that offer when you are in the moment, much more difficult when the monthly loan is due.

In conclusion; Take your time, do your research and get the loan facts before you go.  Even if it is inconvenient for a few days, take a cab and take your time!

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