10 Tips to Vehicle Ownership…

1.) Determine how much you can afford. (Your total transportation expense) should only be 10-15 percent of your bring home pay (not gross pay). 

Example: If your take-home pay is 3,000 dollars monthly (after taxes), your car payment, fuel, automobile insurance, car maintenance should only be 300-450 dollars per month. What percent of your income do you WASTE on your vehicle? Remember to calculate all fees associated with the car. Categorize each vehicle expense into these categories.

A.) Vehicle Payment (includes interest)

B.) Taxes, tags, fees

C.) Parking

D.) Fuel/Maintenance (cleaning, oil changes, tires, etc.) 

E.) Accessories 

2.) Find the vehicle that suits your personal needs. Forget those fancy brands and focus on the utility/functionality of the car. 

3.) Purchase a used car, if at all possible. New vehicles lose about 20 percent the first year, then 15-25 percent each year after that. Based on this analysis, it’s best to find a car 2-3 years old and purchase. Consider pre-owned vehicles with warranties! 

4.) Finance cars when interest rates are less than 5 percent. Never pay cash. I hear ole timers say, “I paid cash for it.” I repeat, finance if possible. Your money can make you more in an investment instead of a depreciating asset.  Why pay cash for a car if you can take that cash and invest in the S & P 500 and gain 7-10 percent returns and finance that car for 1.99 percent interest? Only an illerate investor would!

5.) Know your credit score prior to your purchase.

6.) Purchase a vehicle with the future in mind. If you are thinking about a family, don’t purchase a subcompact car or corvette! 

7.) Get a pre-approved loan. Figure out your interest rate before you even begin car shopping. If it’s higher than 5 percent, DO not purchase a vehicle. Do things to get your credit better before purchase. 

8.) Never purchase a vehicle on the same day of test-driving or window shopping. Always walk away and leave emotions aside. Don’t be afraid to use prices from one dealer to pit against another dealer to get the best deal possible. 

9.) Don’t negotiate on payments. Negotiate on the bottom line. When a car salesperson keeps asking about “the monthly payment” you are looking for…RUN! This is a sales tactic.

10.) Avoid any vehicle loan over 60 months. Buyer Beware! If you have to finance longer than this, you cannot afford your vehicle.

Sources: https://cars.usnews.com/cars-trucks/best-car-buying-tips#6) -Don’t-Buy-Too-Soon