10 min car buying guide

THE 10 MINUTE CAR BUYERS GUIDE

By John Rebry

January 2016

5 “C’S” SEMINAR SERIES

There’s a better way…

People who would consider purchasing a vehicle online

(result of a 2015 Accenture survey of 10,000 people in 8 major countries)

Today’s Overview and Objectives

• Our 5 ”C’s” seminar goal of this mini lesson is to make sure you will be better prepared when you go out and buy your first car and if followed is guaranteed to save you money...

#1 Rule : buy used – at least for your first purchase!

• Approximately two out of every three cars sold in America are used cars.

• Many consumers, especially individuals who are first entering the workforce, can’t afford to buy a new car.

• The cost of insurance is generally higher for a new car

• Buyers can usually afford more options and luxury items when they purchase a used vehicle

Why buy a used car?

Plus there’s lots of great inventory of 2 and 3 yr old vehicles – and many still have factory warranty!

The buyer of a used vehicle avoids a significant portion of the depreciation costs, which can be up to 40% of its value in the first two years.

DEPRECIATION!

How much does the average new car depreciate in value?

“300,000 is the new 100,000…..”

The average age of a vehicle on the road today is 11.4 years! Quality improvements by

virtually all vehicle manufacturers have dramatically increased the useful life of cars and light trucks.

Most newer vehicles come with a 100,000 mile warranty on the engine, transmission and drivetrain

Rule #2 : The 1/10th Rule – divide take your monthly take home pay by 10 – that should be your maximum monthly vehicle payment. Also - don’t borrow beyond 36 months….

How much should I borrow for my used car?

Why not borrow more than 10%?

Budget Item $$ per month

Food $400

Rent/Mortgage & Property Tax

$600

Credit Card $300

Fuel, Insurance & Maintenance

$400

Student Loan $150

Entertainment & Miscellaneous

$400

Retirement 10% of your take home pay!

If done correctly, it’s now safe – and economically advantageous - to purchase vehicles online

• Use reputable dealers • Be very careful purchasing older

vehicles this way • If you need more peace of mind,

obtain a purchase protection policy from your dealer

(eg. www.dealshield.com)

More Time Spent = Greater Savings

Ho

w t

o b

uy

a u

sed

car

Figure out

what you can

afford and

what you need

Go get your wheels!

Rule #3: Never buy any car without researching first!!!!

Find out what’s

available in that price range

When is the best time (and the worst time) to buy a used car?

RULE #4: TRY TO SELL YOUR CAR YOURSELF

• The dealer is generally going to give you $1,000 or more less than you could sell it privately.

• Check websites like kbb.com, nadaguides.com and edmunds.com to see what you can get privately

• Ask for a Carfax or Autocheck report

• See if a condition report (CR) or sellers disclosure (SD) is available

• If you are going to borrow, get “pre-approved” by your bank or credit union before buying

• DON’T RUSH !!!

Any other tips on making sure I make the correct purchase?

• Buy “used” and sell your car privately for your biggest savings

1

• If you have to borrow, don’t get overextended 2

• Make sure you are well prepared before buying anything

3

Today’s Mini Lesson Summary….

Resources and References

• MJR & Associates Inc. <www.mjrandassociates.net>

<jrebry@mjrandassociates.net>

• Obtain used car values at: <kbb.com> <edmunds.com> <nadaguides.com> <truecar.com>

• Accenture.com (Global Consulting)

• Wall Street Journal