How to Make an Intelligent Car Purchase in 2020


We always announce the typical car. Purchase is thirty. Nine thousand one zero five okay. That's what we've used a stat. That might be an updated stab at somewhere in that absorb park with. Daniel showed me that the actual new car price is thirty. Three thousand three hundred and twelve dollars. The difference is the negative equity meaning. There are so many people who are buying new cars that are under water. That thing negative equity is getting rolled into their new per so the dealership. Don't don't worry about make cnet even know where about making that whole. Just go ahead and roll that on in so you can buy this thirty three thousand dollar car for thirty nine thousand dollars so it's even worse because the interest rate on the negative would've equity loans is over seven percent which is unbelievable. That's incredible if you think about the opportunity cost of your army of dollar bills that hurt you. And the average linked linked of loan is over now six years. So if you bring all this together it made me. Also we need to do a public service announcement on how not Descru- store purchase purchase so we went and pulled the archives for the money show. We saw we have not done a show on purchasing vehicles in the last two years. We're like okay. What's going on in the world but this is something that we can help? People make better financial decisions on car purchases in twenty twenty. We've actually put it in steps. We're going to walk through some steps and how you should approach the car buying process some things to think about but before we do that we have to lay out what we consider kind of some ground rules to get your mind right. So take a deep breath in Dan and then these are the things we think. If you're going to actually even approach the subject of purchasing a car. How do you idiot proof and give yourself some ground rules rules on to approach this in a well rounded way? I love and I think Brian the very first one that you started with. And and I I've heard you counsel so many folks as they approach this when it comes to purchasing an automobile. Don't make an emotional decision right and look the car manufacturers the car dealers they know. This is an emotional purchase. That's why if you look at the ads. We're in the holidays right now. They do the crazy thing. You'll see you'll see a husband or wife give if some essay one surprise you and then it's usually the husband because for some reason I always put the husband. I've got a surprise for you. And then they go out and they have an SUV and a pickup truck in the driveway. With Golfo what idiot buys a vehicle without talking to their spouse. But somehow we're supposed to celebrate this and things that this is where things are so it's emotional and then I remember I can't remember. Volkswagen started with a little car on the guy's head because it was like a car. It's on it's on his brain but then it keeps keeps getting bigger bigger bigger bigger into. Because you just can't control yourself so the first thing you have to do is make sure your practical side is going to win out in this war war over your emotional side so promise yourself that you also you need to know and we're going to repeat this several times in the show he neither tell yourself we will not not be buying this car in person. We're GONNA be talking about phone calls. We're GONNA be talking about email. You gotTa keep the Home Court advantage us all those resources you also need to. I understand that purchase price trade in values. All those things are much more powerful than the monthly payment trap Bo. Tell them what they do. You Walk on dealership. What's the first question that a sales person always ask you okay? Well what are your monthly payment to be before you start talking about. What kind of car priced car? Why what what's it's your budget? How much you planning on spending a month? Well here's the dirty little secret you don't know just about any car they can put you. They can fit inside that monthly payment box. If you're starting the conversation conversation there you're starting in the wrong place and that leads to the last thing which is look opponent. Purchase transactions go have multiple components opponents. And you need to be standing on guard. You need to tune up your spidey senses on all components of the transaction. We're talking about the purchase. We're talking about the trade in the the finance and even the extended warranty or throw in that last meeting unique to be on guard through the entire process. That's the only way you're GonNa make sure that you don't walk into a deal that you'll financially struggling with for years it will be the tell that follows you around and I. I don't pay too broad of a brush here but unfortunately in in most circumstances when you go on a car dealership and when you meet with that car salesman the odds are that they are not trying necessarily to put you as their our number one priority. There ain't nobody at a car. Dealership is a fiduciary there's no legal obligation to ensure that you get the best deal so let's let's jump into to this because there's obviously some steps we can take this the priests ups that setting the table. Now let's actually move into step one. which is you got to know your budget? Yeah and I I love it Brian. What you said is know your budget not know your monthly payment amount? That's not what you need to know you need to know. How much can you budget to purchase car car purchases? It's amazing they even call these things assets because they depreciate so quickly that you need to get your mind right understand that it is all about how much much use you're going to get out of that. So that's why I tell you know your budget but also how do you view your relationship with your

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