Buy or lease a car
Transaction Fees
money a car dealership adds to the purchase price of a car that covers the cost for employees of a car dealership handling all sales paperwork and deoartment of montor vehicles' transactions dealing with the sale of a car.
When looking around
reasearch amd compare interest rates at different banks and the credit union. search for lowest APR.
set a target & negotiate hard
set a target about 2% above the dealer's cost. Start bidding below your actual target and plan to wind up near that figure.
Upside down loan
- a loan is considered an upside down loan when you owe more money on a loan than the $ value of the item -A substantial down payment when purchasing a car will keep you from having an upside down car loan.
Great car price resoures
- kbb.com(kelly blur book)- access actuall price of your car -leasewizard.com- identifies the best current leasing programs in a region -edmunds.com-provides info about maufacturers.
Disadvantages of leasing a car
-If you plan to purchase the car at the end of the lease, it will be more expensive than if you bought the car new. -you are locked into the lease for a specified term.
Car leasing jargon
-capitalized cost- equivalent to the spelling price -Residual Vaule- the estimated worth of the car at the end of the lease.
Benefits of leasing a car
-lower monthly payments than buying a car -Much smaller down payments is required -Get to drive a new car every few years
Leasing a car
-you are paying to use the car during its first few years -Your are paying for the deprecation of the vehicle while you use it.
Tips for buying a car
1) make sure you are selecting a vehicle that is right for your needs 2) access the worth of your old car. 3) decide whether new or used is best for you 4) consider whether leasing or buying makes more sense for you 5) Research current interest rates at your local credit union and banks before you go to the dealer. 6) negotitate a lease or purchase price- before you buy 7) dont settle for "what do you want your monthly payments to be?" 8) Dont let the finance managment convince you into purchasing a lot of add-ons that could increase the price of the car.
Closed-End Lease
Sets a specific amount for the depreciation cost you will pay.
Open-End Lease
The leasing company estimates the depreciation cost and at the end of the lease it decides the exact cost and pay the difference.
Depreciation
a deacrease in the value of an asset with the passage of time, due in particular to wear and tear.
MSRP
cManufacturer's suggested retail price - the amount of money for which the company that produces a product recommends that it be sold for in stores.
remember...
you will have to pay the lender (bank or credit union) not only the total amount of $ you borrow to purchase a car but... you will pay finance charges -- interest.