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Car Buying Process
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Hello everyone.
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Don’t Get Taken for a Ride Presentation.
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Gregorio Alcantar.
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Financial Literacy Coordinator here at Cal State
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Northridge.
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Master's in Counseling 2006.
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the Chat Box, please put whether you are a CSUN student
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or alumni.
Welcome to the Car Buying Process My name is
I’m a Financial Aid Counselor and a
I’m also an alumnus.
I received my
Now, before we begin, in
Please take a moment to follow the link in
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the Chat Box to take our survey after the presentation.
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And, we’ll go ahead and remind you at the end of our
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presentation.
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into four parts.
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the car buying process.
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is very important because students, alumni, individuals
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who are interested in buying a car, would be great if
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they actually were informed what steps are important
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and necessary to take to be a well-informed consumer.
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And so the way I'm going to break this down is going to
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be budgeting.
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about the legwork that has to be done way before you
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even step inside the dealership.
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about picking a car which involves a lot of research.
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Then we're going to talk about when you’re actually
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there at the dealership buying the car, the negotiation
Okay, so this presentation is broken
And so these are the four steps to
This presentation, I believe,
So we're going to talk a little bit
We're going to talk
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process.
And then we will end with the importance of
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what happens after you have your car and, believe it or
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not, there’s also a cost involved with that as well and
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that will be under “Maintenance”.
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work has to be done way before you start the car buying
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process, in terms of when you start going to the
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dealer.
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budgeting.
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need to determine how much can you afford to spend.
Okay.
So a lot of
So the first thing, let’s talk about
Before you start shopping for a car, you
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And what I placed here is a chart or an excel breakdown
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of a budget, which includes both income and your
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expenses.
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purchase a car, you need to find out how much car can
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you afford.
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indicator there, car payment, you need to include that
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as part of your budget. It definitely begins by
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reviewing your budget and see where you are with your
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other expenses.
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where your money is going.
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budget is a way to determine where you are at this
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moment and where you want to be.
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goals is the buy a car then you need to budget so that
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you can plan for that expense.
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You need to be real.
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guidelines.
And as you are considering getting ready to
And so as you can see there by the red
And then the budget really helps plan
Okay.
I tell individuals that the
And if one of the
How much can afford?
And here are some
You should not have a car payment that can
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take up more than 20% of your discretionary income
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after paying your regular expenses.
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that mean?
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can see here we have our budget again.
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expenses and there are variable expenses.
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expenses are those expenses that you need money for
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that are important, kind of think of your survival
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expenses, right.
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expenses, which are expenses that don't usually happen
Okay, so what does
So, if I go back here for a moment, as you
There are fixed
Fixed
And, then you have your variable
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every month and are always continuous.
When you talk
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about discretionary income, that’s money after you
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address your expenses and you have money left over.
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that money left over is more so, for example, when
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you're paying for your Netflix subscription, you're
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going to the movies or you're going to eat out.
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like that.
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you’ve budgeted and you’ve come up with discretionary
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income, then 20% of that seems like a good manageable
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guideline for purchasing a car or for putting for a car
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payment.
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then I'm looking at about a $400 car payment.
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going to go higher than that, then something has to
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give in terms of my budget.
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adjustments.
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budget and you’ve determined that, okay this is how
So that is discretionary income.
So
Things
So once
So, if my discretionary income was $2000,
Okay.
If I was
I'll have to make
So now that you've looked at your
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much car I can afford or my expenses are in order, and
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now you still can't go into the dealership, you still
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have to do some more work and that involves picking the
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car.
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that are very reputable and these are websites that you
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go to, to get good information on cars.
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important because it also gives you bargaining power.
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If you're very knowledgeable about the car that you
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want, that you like to buy, and you know everything,
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the in’s and out's about it, then when you're at the
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negotiating table they can't, they can't throw a fast
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one on you.
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you don't already know.
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helps.
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Yes, if you're interested in shiny bells and whistles,
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that's fine.
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really seeking here.
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Review reliable sites for information, as I mentioned
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the Kelly Blue Book is a very good site.
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another one.
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you to definitely use those as a way to research your
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car.
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importance of picking a car, how much car do you really
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need?
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websites, you want to look at the type of car.
Now, I have placed here some examples of places
Research is
They can't really tell you something that
And so it really, really
You want to pick a good car that’s reliable.
Okay.
But it shouldn't be the main thing you're
Reliable is really the key here.
Cars.com is
And Carfax is another site and I invite
So, as you continue to review the
And as you're looking at those books or those
Are you
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interested in a compact car, are you interested in a
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sedan, in a sports car, in a truck, in a two-door and a
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four-door and then we can just keep going on and on;
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right?
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considered.
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because you are commuting from far?
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wear and tear?
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Do you live close to campus?
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interested in Apple's Car Play, the bells and whistles
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that's when you start getting into that, heated seats,
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power windows.
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and down?
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in mind when looking and picking your car.
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also want to identify your needs versus wants.
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may think that this has to do with what we mentioned
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earlier in terms of your budget and expenses, and fixed
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versus variable.
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car.
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off some of the wants for a lower price.
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example, if you really like the Apple’s Car Play, but
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you really like something else about the car that's
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more important.
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particular -- you know, what do they call it? -- add on
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or additional, I’m missing the word -- object that can
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be part of the car.
All those things have to be looked at and
Will you drive it much?
Do you need a car
Is there a lot of
Are you going to be in traffic a lot?
Car features, are you
Are you okay just using the manual up
And those are some things you want to keep
Now, you
Now you
But, it also involves regarding the
You need to prioritize.
You may need to trade
So, for
Then are you willing to sacrifice that
Select three or four choices that
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meet your needs and research the features of each car.
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That just kind of goes with trying to pick some cars or
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makers and seeing and comparing what are some of the
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good things on each car that you like.
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and con's list.
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recommendable.
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one is the best option for you.
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must fit within your budget.
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lose sight of that.
That's very good.
Make a pro’s
That's very
I compare your choices and weigh which
Any car you evaluate
And that’s really, never
Your budget is really your
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guiding force.
And if you’ve already determined that
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this is how much car or payment I'm going to make, then
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kind of stick with that.
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help you out there at the table.
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to say that it's important that you want to evaluate,
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the car you evaluate must fit within your budget.
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want to share a story that I had heard.
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individual asked another, you know “What's going on?
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feel that you're so nervous, you're jittery.”
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“Yeah, I know I haven't been able to sleep, and you
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know, regarding my car.”
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back and say, “Why haven't you been able to sleep, are
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you afraid they're going to steal the car?”
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“No, I can't sleep because I don't know how I'm going
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to make next month's payment.”
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that situation.
And then it's really going to
The reason why I want
I
So one
I
He said,
So the other individual goes
He said,
You don't want to be in
Now there's a, here's a chart that
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talks about three different things to think about or
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different ways to picking a car or when it comes to
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purchasing a car.
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a brand new car, and there's a used car.
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of them offer their pro’s and con's.
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leasing first.
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that you're making with the dealer to use the property,
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which is the car.
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property that you have an agreement for a specified
So, there's leasing, there's buying
And all three
Let's talk about
When you lease a car, it's an agreement
It's not your property; it's their
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time and a monthly payment.
Think of it almost like
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renting.
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it.
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the lease.
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rent it for five months, I'm sorry five years, then at
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the end you are welcome to purchase it if you like.
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People can afford to lease expensive cars then they
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would be able to finance.
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those who are interested in getting a car every two
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years, and don't mind the whole depreciation value or
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really concerned about that.
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deal with that but it's usually for high turn around in
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terms of vehicles.
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payment, no trade-in to worry about, new car every few
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years.
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nothing.
You don't own the car.
You're only renting
The car is available for purchase at the end of
So, if you agree to a five lease term or
So leasing is an option for
The leasing kind of helps
Advantages, there’s no down
But just know this, you owe nothing, you own
And you may pay penalties for excess mileage,
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wear and tear.
Which basically when you're leasing,
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then they say yes so we're leasing if for five years
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you can't use more than 1000, 1200 miles per, 12,000
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miles per year and so you have to be careful that you
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don't go over that.
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And for, when you actually buy a new car, it may be, it
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definitely is, it may be more expensive, it loses value
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when it's driven off the lot.
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Cars depreciate the moment it is driven off the lot.
There's also buying a new car.
And that's just a fact.
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There's less maintenance, however there's less
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maintenance on a brand new car.
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of after you buy the car there's not a lot of expenses.
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And yes, you save a lot on repairs.
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vehicle, because you bought it out right.
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the great things about new cars, especially with laws
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that have, if you're in the state of California is
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there's no smog checks for at least seven years.
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you look into possibly considering a used car, you can
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save a lot of money because when you buy a used car
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there, you don't really worry about the depreciation
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values, especially that big drop in depreciation as
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opposed to a brand new car.
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a used car, it's almost true to the actual cost and
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when you look at the Kelly Blue Book, you can actually
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see the true cost there.
So, there's not a lot
You own the
And one of
When
Because when you're buying
It may need more repairs,
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it's possible.
But a used car actually means about a
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year or six months old as well.
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four or five years, it can be just, you know, six or a
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year old.
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actual value occurred for the car, that's what I
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mentioned basically that you don’t have to worry about
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depreciation as much because you know the actual.
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you keep the warranty.
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important to keep in mind.
That's fine too.
It doesn't have to be
The actual value bought at
And
This is something very
So as I mentioned to you,
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if you are interested in a relatively new car, slightly
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used, somewhere in the used area, and you bought a car
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which is about a year or two years old, know that the
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warranty that‘s still on the car goes with the car.
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And so you are still able to take advantage of those
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benefits.
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don’t assume you have to buy a used car, that's
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something I recommend to consider, but you don't have
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to.
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the right price, and you decide to keep it for a long
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time, you could save hundreds of dollars in the long
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run.
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that you have.
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pick the car out and you’re trying to see which car
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feels right.
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your choice to see if the car lives up to your
So, something to keep in mind as well.
Now,
Because, if you find the right new car, you get
So, I just want to present you with three options
All right.
So you're still trying to
Please consider test driving the car of
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standards.
Is it comfortable?
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How fast does it stop?
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important to you should be considered.
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shop.
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a very, it’s a major purchase.
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Take your time.
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this purchase.
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helps to leave your wallet in the car, especially, if
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you're window shopping and looking at cars and test
Try the car on.
Does it drive smoothly?
Every detail that’s so
Don't window
It's all about the feel.
It's
Does it feel right?
Don't be in a hurry when shopping for
One of the tips I like to give is it
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driving.
Do not, you know, car salesman are there,
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they know their job well.
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know, to sell you the car, to make money and things
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like that.
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saying when you’re ready.
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test drive, dealerships are definitely willing to go
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ahead and allow you to do that.
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tip I like to give.
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is not enough cross-shopping.
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to, and by cross-shopping I also mean when you go to
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different dealerships too, because they all have,
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although there may be a suggested manufacturer's retail
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price, dealers have different incentives and different
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perks or different prices that they add on or do not
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add on that can help you save.
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not on the lot that is a very big mistake.
They have the right to, you
But also you want to have the upper hand in
And if it's really just to
But that's just the
Common mistakes when picking a car
And you definitely want
Settling for what is
If you have
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been doing your research and you have been really
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looking at all the different aspects of the vehicle
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that you're interested in and you know exactly what car
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you are, then if that particular lot does not have the
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car, then you don't have to stick with that.
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go somewhere else or you can work with that dealer and
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say okay could you go ahead and get the car.
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story I bought my car, what is it 12 years ago, 14
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years ago, and I still remember like it was just
You can
Personal
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yesterday.
I knew exactly what car I wanted, I knew
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what color I wanted it, I knew what feature was going
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to have inside, and if the dealer didn't have it that
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was fine.
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when I actually got to the dealer, and I said this is
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the car I want and I pointed to it.
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hanging from, I don't know, they propped it up so that
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they can see it.
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you take this other car that's here, it's ready to go.
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I said, “No I want that car.
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And so you know, it's what you want.
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drive, no, do not skip the test drive.
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the car.
Buying more car than you need is also a
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mistake.
Okay.
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important to you.
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okay.
I was going to go to the next.
Okay.
I remember
It was actually
And the guy said, “No no, why don't
That's the car I want.”
Skipping the test
You got to feel
Again know what you need, know what is
Stick with that and you should be
So now, let's go ahead and get into
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negotiating.
Now, as I mentioned before, before I
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start here is that dealers or salespeople, car salesman
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have the right to make money and they have the right to
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go ahead and sell you the car and do what they have to
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do and that's fine.
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just want to be that well informed.
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something that will help you in that process.
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about determining a fair price and I'll explain exactly
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what that is.
But when you walk in there, you
And so here's
This is
You get to decide what price you think
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is fair before you make an offer for a car.
When you
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look at the Kelly Blue Book, for example, as a resource
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it actually offers that type of information so that you
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already have a number in mind as you walk in there.
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Publishes great information and information on all
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models and for all years.
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year of the car you are considering you can find an
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estimated fair price for it.
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a more detail.
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have a, kind of like an upper hand if you want to think
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of it that way is the preapproval process.
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preapproval is the process of getting a new or used car
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loan prearranged through a bank or a credit union.
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before you even walk inside a dealership, you've
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already worked with a bank or a credit union, worked
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out the details about financing a vehicle.
By looking up the model and
And I'll explain that in
One of the things that also helps you
In
Got the
So
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terms and conditions, got the correct rate, you're very
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comfortable with the payment that you’re going to make.
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And so with this preapproval letter is something that
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they give you and saying okay, this is something you're
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telling the dealership, I've already worked out the
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details in terms of the negotiation process, I know
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what kind of car I want to get.
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going to pay for it.
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going to be able to buy it here at this place.
I know how much I'm
I just want to make sure if I'm
And so
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it saves a lot of time too.
Now, if you are going to
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go ahead and purchase the car and finance your car,
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this chart here on the right is basically wants to
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share that the FICO score is very important.
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is tied to credit.
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the car, more than likely you're going to buy it on
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credit.
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score, which is between 500 and 589, then whether you
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go to a bank or credit union or the dealership
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themselves, you will expect to pay more for your car
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because you're going to pay a high interest rate.
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if you go all the way towards the end of the chart, if
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you have a credit score between 720 to 850, then you
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because you are a person who is responsible with
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credit, the lending institution is more than willing to
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go ahead and have you pay a lower interest rate on that
The FICO
And so if you are going to finance
And notice the bar is, if you have a low FICO
Or
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particular loan.
So, that’s just something to keep in
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mind too.
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these are some of the things you want to avoid.
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unnecessary add on’s.
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there, if there is something in the research that
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falter that you missed or something like that and they
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kind of catch it, they may just start adding other
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things that, you know, hopefully if you did your
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research you already thought about.
Common mistakes when negotiating.
All right.
And so,
Buying
So when you're
So, buying
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unnecessary add on’s is a mistake, a common mistake.
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Alarms, sound systems, floor mats, seat covers,
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navigation, those are fine any other way, right.
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said they have a right to make a buck.
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monthly payment, that's definitely a big mistake too.
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One of the questions that will come up again they like
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to ask and we like to answer it is how much would you
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like your monthly payment to be?
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say $200, and then in the end you're buying a $50,000
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car because they guaranteed your $200 a month, but
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you're buying more car.
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to pay cash.
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you say you want to pay cash, usually what they say is
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with that is they will negotiate the price lower,
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something like that.
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Maybe not consider.
As I
Focusing on the
And then, you know,
Saying up front that you want
That is something that I don't know, if
But, it's a big expense already.
Being clueless about financing,
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that's why you're here in this webinar.
I'm actually
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sharing with you that it’s important to understand how
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the financing process works.
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then there's stuff they can slide in there, right.
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Negotiating down from the sticker price.
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show you how to negotiate from the bottom up instead of
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from the top down.
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that's if you're really interested in trading in your
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car.
Because if you don't know
I'm going to
Fumbling on the trade-in.
And that will come up.
And
You definitely want to
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let the trade-in weigh at the end or not bring it at
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all.
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Negotiating and determining a fair price.
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I'm going to, let's see, I had to go over this over
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myself many times as well.
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explain it very clear.
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car or the, actually the manufacturer's suggested
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retail price is the price that's shown on the tag in
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the car's window.
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price is also shown in the car's window.
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a picture and how that looks like.
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a new car usually lies somewhere between the sticker
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price and the price the dealer pays for it.
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usually known as the invoice price.
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fair price I didn't say used car, okay because that's a
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whole different thing.
Or consider donating your car instead.
Okay.
Okay.
So
But let's see if I can
So, the sticker price on the
Also known as the MSRP.
The sticker
I'll show you
The fair price for
It's
Now notice for the
But for a brand new car the
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fair price is somewhere between sticker price and the
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price the dealer pays for it.
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the dealer's invoice is approximately 90% of the
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sticker price for compacts and subcompact cars and 84%
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for a certain selection of vehicles.
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a little more in detail.
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between three to sick percent over the invoice price.
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Let me show you what I'm talking about.
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So, here's an example of what you see on a car, right,
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or a sticker price, the information about the vehicle.
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All right.
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this is the manufacturer's suggested retail price.
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That's not the actual price of the car, that's what the
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manufacturer is saying, this is what we recommend, and
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this is what I think the value of the car.
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what we suggest.
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That is kind of like the total.
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like if you are buying a pair of jeans.
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price of the car.
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suggested retail price.
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at the bottom that is the final price on the window.
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The dealer invoice is the price the dealership paid.
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So when they get the vehicle, they purchased it for a
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lower price, way lower than the other top two, the MSRP
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and the sticker price.
Now according to AAA,
I'll explain that
A fair price is likely
All right.
So look at the top right at the MSRP.
And
But that's
The sticker price is at the bottom.
Think of it almost
That's the
So, the MSRP is the manufacturer's
The sticker price is the price
The fair price is trying to be
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right in the middle between that dealer invoice, which
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is that low price that they paid for it, and then that
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sticker price.
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as you can see in the bottom right corner, so the
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sticker price would be 100%.
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what's the cost of the car?
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You paid 100% plus taxes.
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car 90% of that price.
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want to pay anywhere in between that.
So you want to be in between that.
So
So, let's say okay,
Here's the money, right.
But the dealer paid for the
They got a break.
Well, you
Because again,
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they do have a right to go ahead and make a buck or
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two, right.
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less than 90% of that, no, no.
I don't even think they
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will give you the time of day.
So you want to
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negotiate between 94 to 97% of the price of the car.
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So, if you go ahead and take, again the Kelly Blue Book
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also gives you information about what, kind of what the
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dealer paid, but I'm already giving you an idea.
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about 90% usually.
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get a number.
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ahead and ask your questions.
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can go ahead and probably give you some examples.
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Okay.
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Statements like: This is the only car I want; and this
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is just what I'm looking for; and wow, and no.
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weakens the bargaining position.
Because, if you say you want to pay way
And so you can go up from that and
I hope this part makes sense.
All right.
It's
Now go
And then at the end we
Continue talking about negotiations.
That
Because then you’re
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tapping into emotion.
And, I got to give props to car
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salesman.
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101, because, they really know how to tap into that.
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And so, that's one of the things you don't want to do
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that.
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help you either.
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your initial offer lower than the top price and then be
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prepared to negotiate.
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that dealer price, so between that 94 to 97% range.
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car buying service allows you to choose the vehicle
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features you want and service will locate it in
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negotiating the price and arranging for delivery.
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the end I will show you that there are places that you
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can go to where you don't have to go through all this
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process yourself.
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through the companies that can do this for you.
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just basically say this is the car I like, this is what
18
I want to buy, this is how much I'm willing to pay or
19
this is how much I want to finance.
20
Everything else is handled by the organization.
21
there they are right there.
22
negotiate, you can go through other means to purchase a
23
car.
24
For example, Costco.
25
member, for example, not only are you saving, for
You know I do think they take Psychology
And I think shopping with emotion doesn't really
So don't reveal your emotion.
Make
So, you want to start above
A
At
The negotiating, this is all done
So I've outlined three.
You
And that's it.
Oh,
If you don't want to
They are just examples.
If you are already a paying
19
1
example, on that gallon of milk, right?
You can save
2
even for purchasing a car because for members only they
3
already bring down the price and also try to stay
4
within that 94 to 97% price that I'm talking about that
5
you want it to be the fair price.
6
service, for example, that works closely with credit
7
unions.
8
them know I'm interested in this kind of car, I want it
9
to be this much old, two- or three-years old, these are
Autoland is a
You can walk into your credit union and let
10
the features I like, this is how much I would like to
11
pay, I'm like to check the financing.
12
it.
And then they go ahead and do what they have to
13
do.
And then they call you and tell you they found the
14
car.
15
Would you like to test drive it?
16
too.
17
about CarMax, in doing research, I found out that, with
18
CarMax, their tag line is “There’s No Haggling.”
19
There's no negotiation.
20
price you pay.
21
that 94 to 97% is.
22
money, but they are promising that they have the lowest
23
price you will find anywhere.
24
that’s something that if, you know, just want to go,
25
they won’t, you can’t even, don't even try it because
This is what it is.
And then that's
Would you like to see it?
So that's pretty good
And then CarMax, CarMax, one of the things I like
Okay.
The price that you see is the
They've already accounted for where
Yes, they are going to make some
And so, for example,
20
1
they won't even give you the time of day to negotiate
2
it.
3
some figures.
4
kind of goes into, it's a lot of information, but I
5
always been kind of mentioning that it's important to
6
look at whether you're going to finance your car
7
through a finance institution or unless you went
8
through the preapproval process you've already talked
9
about the terms and conditions.
That price is what you get.
It doesn't hurt.
Always try to ask for
Okay.
And so, this
Whether your car loan
10
is going to be 36, 48, 60 or 72 months.
Do you know
11
that if you extend your time to pay your car back,
12
you're going to have lower payments, but you’re going
13
pay more interest over time.
14
in mind.
15
the car dealership.
16
is at the end of the day, car dealerships are
17
definitely interested in keeping your business and
18
keeping you a longtime customer.
19
consider their financing, which is something you can
20
always explore.
21
doesn't, then you’ve already went to your financial
22
institution.
23
want to keep in mind when it comes to financing with
24
the car dealer.
25
programs.
That's something to keep
You could also finance your vehicle through
Now, one of the things I believe
One of them is to
If it works for you, great.
If it
But here's some examples of things you
Most manufacturers offer similar
And, in the end sometimes car dealerships
21
1
are owned by one major company, so the financing is
2
usually from the same company any ways.
3
as well, are you planning to finance through the car
4
dealership or you're planning to finance through your
5
financial institution?
6
definitely come more prepared with the preapproval.
7
You've done all that work so that it helps a lot in the
8
negotiation especially, because you’re saying this is
9
what I can afford and that is what I can pay.
But know that
My advice is that you should
And I
10
just want to so if it is going to work out with you
11
here.
12
covered picking a car which is research, and then we
13
covered the negotiation process.
14
four part process is the Maintenance.
15
the car off the lot.
16
bought a brand new car, you another bought a used car.
17
Okay great.
What happens the day after that?
18
after that?
Months after that?
19
be maintained and do you know there's costs involved
20
with that as well.
21
TCO which is the Total Cost of Ownership.
22
only focused on the first three things, but what about
23
that fourth thing?
24
Because depending on what car you buy it may have
25
certain maintenance and repair requirements.
Maintenance.
So, we covered budgeting.
We
The last part of this
So you’ve driven
You either leased it or you
Weeks
Well, the car has to
There's something I like to car the
Because, we
That really covers the whole gamut.
The
22
1
owner’s manual will always tell you what that is and
2
when your car needs to be serviced.
3
change the oil every few thousand miles.
4
engine tune-up every 20 to 30,000 miles, but it really
5
depends on the car, right?
6
new car, with technology nowadays, a car can last you a
7
very long time before it needs any service or oil
8
change.
9
should definitely plan for unscheduled repairs, like
Typically you
Have a major
Especially if it's a brand
But definitely follow the owner’s manual.
You
10
flat tires, broken belts, leaky hoses.
Maybe if you
11
bought a used car or even if you bought a new car,
12
again, I'll disclose about myself, I bought that brand
13
new car 14 years ago.
14
car, I was still under warranty, my transmission blew
15
out.
16
I'm glad that it was covered under warranty.
17
it wasn't.
18
myself.
19
terms of having a car for maintenance, the cost of
20
operating a car the part of the whole total package,
21
fuel, gas; right?
22
fuel efficiency of your car.
23
if you've gone to the gas station you have noticed
24
three different numbers right; 87, 89 and 92, so
25
depending on the manufacturer’s requirements you need
In four years when driving the
And so as you can see, it can happen; right?
And
But say
That would be something I would have to get
Here's some other things to consider when, in
The cost of gasoline depends on the
What does that mean? Well
23
1
to go ahead and put the correct octane.
That's what
2
they call it.
3
they usually use the higher octane.
4
101, if you use higher octane, usually the fuel burns
5
faster and you'll be going to the gas station more
6
often.
And so, that's something you need to keep in
7
mind.
Whereas 87, which is cheaper on the side with
8
the gas, but it usually reserved for trucks, and
9
smaller vehicles, small SUV and things like that.
Usually for high performance vehicles
And so, Science
It's
10
a little different, but there's a price difference
11
there and you’ll definitely want to keep that in mind
12
as well.
13
property due to normal wear and tear.
14
depreciating, as you can see by the image here, every
15
day the car is depreciating; right?
16
you're maintaining the car that's just how it happens.
17
You can look at the Kelly Blue Book as a guide and you
18
can see.
19
depreciates.
20
cars do not depreciate faster.
21
example, that the Honda and the Toyotas depreciates
22
slower than other cars.
23
miles driven increases, the physical condition begins
24
to deteriorate, the mechanical difficulties arise.
25
that's all part of the depreciation process.
Depreciation and decline in the value of the
Well,
Even though if
It gives you kind of like a chart on how it
Now some cars depreciate faster, other
All right.
I know, for
As a car ages the number of
Also
And
24
1
styles and consumer tastes change over time.
This, you
2
want to be careful about this.
3
driving my car for 14 years, it's still the same car
4
and yeah, I've seen new cars.
5
interested in a new car, but you know I have also have
6
to keep things in mind as well.
7
cause cars to lose market value as well.
8
cars depreciate as I already mentioned.
9
is one of the single, greatest costs of owning a car.
Because, I’ve been
You know, I've been
All these factors
Now, about
Depreciation
10
Especially one of the ways to keep that in mind is
11
let's say you buy a car, a brand new car, and as you
12
know it depreciations very quickly within its first
13
year.
14
different car.
15
long run because you lost that money in the
16
depreciation.
17
run on gas, and we find ourselves having to do that.
18
The car will retain more of its value over time if it's
19
well maintained and has fewer miles on it at the time
20
of sell.
21
keep in mind.
22
are some makers and type of cars that maintain their
23
value and they hold their value more, refer to the
24
Kelly Blue Book, for example, with more information on
25
that.
In the year two or three, you decide to get a
You're going to lose more money in the
Gasoline is the second.
You know cars
Easier said than done, but it's something to
Okay.
And there are some, as I mentioned there
So we're getting near the end.
I want to
25
1
leave with you seven signs that you bought a good car.
2
Sign Number 1:
3
often, will last you at least 10 years.
4
to a car for 10 years and its done good with very low
5
maintenance, you have a reliable car.
6
you love.
7
driving it.
8
milk, you want to go in your car.
9
lot. That’s great.
It's reliable.
It does not breakdown
If you hold on
Number 2:
You enjoy getting into the car.
A car
You enjoy
Even if it’s just to go buy a gallon of
You love your car a
Re-sale Value:
Means that after
10
seven years, which is usually a good marker.
Your car
11
is still worth at least half of its driven off price.
12
That's a good car.
13
New cars are more expensive than used.
14
Efficiency:
15
money for the gallon, more miles for the gallon.
16
Down Payment: You placed a large down payment and you
17
are saving on interest.
18
and you were able to put a lot up front, then you’re
19
financing less and therefore you're paying less
20
interest.
21
Interest Rate: which is tied to the first one is
22
because you're financing less.
23
recent, a very good FICO score.
24
affordable interest rate, which means you're going to
25
save hundreds of thousands, hundreds of dollars over
Insurance: Very affordable. Right.
Must I say more?
Right.
Fuel
We can more
The
So, if you financed your car
You bought a good car.
And finally the
And also you have a
You have a low and
26
1
time as you are financing this car.
Okay.
And the
2
last key I would like to leave you with is the Key to
3
Car Purchasing Success.
4
the Key to Car Buying Purchasing Success is to know
5
what you need, Number 1; have done the research, Number
6
2; and you don't budge and you are reasonable at the
7
negotiating table.
8
I've had placed here some resources that helped me in
9
putting together this presentation.
And that is, that is to know,
And with that I like to thank you.
And I invite you
10
to use them to do more research or to just get more
11
information here.
12
Thank you so much to the Alumni Association for
13
allowing me to be here and to do this webinar with you.
14
And at this time, we will go ahead and open up for
15
questions that we may have from you folks in the
16
webinar.
17
first question of the evening:
Q
18
And, so with that thank you so much.
All right.
Gregorio, thank you.
So, our
When you plan on buying a used car, how much
19
mileage should the car have and how old should the car
20
be?
21
A
Okay, great question.
So, this is the first
22
part, how many miles should the car have?
A general
23
rule of thumb is that a car should not exceed more than
24
a 1000 miles a month.
25
So 1000 miles x 12 months, which is a year, would be
So, usually about a 1000 miles.
27
1
12,000 miles.
So, if you use that as a marker, then
2
you can then go ahead and determine for the used car
3
how many miles, how many miles the car has.
4
car is five years old, then 5 x 12 would be 60,000
5
miles or less, is a good used car.
6
part -- Jonathan -– excuse me what was it?
7
should the car be?
8
Well, that really depends and it also depends on your
9
budget.
So, if a
And then the second
How old
How old should the car be?
Okay.
Because you did the whole research at the
10
beginning, and you determined okay at this time I know
11
that we in your audience, we may have some college
12
students at this time and you are interested in buying
13
a used car.
14
small and you can only afford $200.
15
what kind of used car $200 can get you.
16
point it’s really more about is it a reliable car.
17
Does it have what it need for the time that you're
18
going to actually hold the car?
19
buying a car that's a little bit higher in terms of
20
price, but also it's a used car, I would say if you
21
stick within the three year mark, three to four years,
22
three years actually sounds good.
23
that’s good because, as I mentioned, you do keep the
24
warranty of the vehicle.
25
you.
And, maybe right now your budget is very
But at this
If you are thinking of
Three years or less,
All right.
Your next question here.
Well, I'm not sure
Perfect.
Thank
28
1
2
3
Q
Will I get a better deal at the end of the
year for a new car?
A
Oh, yes.
I heard of that.
And, I actually
4
agree with that.
I also listened to a podcast about
5
that, car dealerships and one of the things I found,
6
that yes, at the end of the year car dealerships and
7
this is part of their business process has to make
8
certain quotas.
9
throughout the year, then they don’t have nothing to
If they have been successful
10
worry about.
But if they haven't and that's through
11
the dealership or that company has not made certain
12
quotas -- that's the best word I can come up with –
13
then what happens at the end of the year, they’re
14
rushing to make a sale of a vehicle, then they're
15
willing to give you a lot of saving, a lot of, they’re
16
willing to be more flexible with the negotiations.
17
Yes, they do want to make some money, but they're
18
willing to sacrifice a lot because in the end they
19
would like to make their quotas.
20
If they are successful in selling the cars they need to
21
sell especially by end of year, then they win in the
22
end when they're working with the company or the maker
23
they get their incentives there.
24
can get more deals towards the end of the year.
25
answer is yes.
What does that mean?
But for you, yes, you
The
29
1
Q
Thank you.
Our next question, which is the
2
best way to present a car in order to negotiate a
3
trade-in.
4
A
Oh, I see.
Okay.
So, if you are going to
5
trade in the car, what’s the best way, well, first of
6
all, you definitely want to make sure you are very
7
honest and disclose everything about the car; right?
8
It helps to have your folder for all the maintenance
9
that was done on the car.
Any work that has been done
10
on the car, all that is important.
11
introduce the trade-in at the end after you’ve done the
12
negotiation.
13
determined the terms and conditions, and so you have
14
this total out-the-door price that you're going to go
15
ahead and be willing to pay for.
16
would recommend that you introduce the trade-in, so
17
that you can then see it taken off from that total
18
amount.
19
the conversation, do you have a trade-in or are you
20
willing to trade in my car, but it just gets lost in
21
the negotiation process and you don't want to do that.
22
It's something you want to present after.
23
parking around the block, that’s cool.
24
definitely just keep that at the end.
25
Q
And you want to
You have given the car, you already
At that point, I
Sometimes they’ll ask you at the beginning of
Awesome.
Thank you.
If it helps
Otherwise,
How does the
30
1
negotiating process differ when you are leasing a car
2
rather than buying a car?
3
A
Oh, very good question.
What is the
4
difference between negotiating a leasing and buying a
5
new car?
6
I think there's less negotiation, because remember,
7
you're renting their property.
8
of determine, they dictate, how it is you're going to
9
use this car.
Well, I think that with the leasing, there’s,
And so they really kind
What the price is for renting and things
10
like that.
11
negotiation there.
12
you are owning the car, it's going to be your car, then
13
yes, there's more leeway there than leasing.
14
15
16
Q
And so, there is not really that much
Awesome.
Now, as buying a new car, because
Thank you.
Our next question, can
you explain how Costco can help finance cars?
A
Okay.
So, Costco is an example of a company
17
that you can go and, well, if you visit the local
18
Costco, I'm not sure if they have a – what do you call
19
it? – like a booth where you can talk about cars or car
20
program, their auto program, usually you have to call a
21
1-800 number.
22
all, they are an example of a company where they
23
already determined the price for the car at a lower
24
price for their members only.
25
Costco member cannot go and work through them and to
But the way they can help is, first of
So, I if I am not a
31
1
get this vehicle.
2
they’ve already have worked with these car makers or
3
these local dealerships, if that's what they're working
4
with in the business and have already determined this
5
fair price for you.
6
them.
7
when you work with, for example, with Costco, it's
8
already you just go pay the price that they determined
9
it is.
10
Q
11
questions here.
12
A
Sure.
13
Q
So, we have a question, how and where can I
14
It's only for members only.
But
And so, you just have to work with
And there's really no negotiation on that end
Awesome.
Thank you.
Just a couple more
get my personal FICO score?
A
15
How and, okay good.
One of the ways that,
16
well, for FICO score, it's a little different.
Let me
17
first, before I answer that question, let me say that
18
one of the ways to check your credit worthiness is to
19
check your credit report.
20
government now allows Americans to go ahead and check
21
their annual credit.
22
your annual credit report.com, I believe that’s the
23
site.
24
and then see, make sure that it's really reflects a
25
history of your credit worthiness.
And, I know that the
To check your credit score and
But, you can check all three different bureaus
The reason you want
32
1
to make sure that's all in order is because all that
2
information affects the FICO score.
3
question where do you get that information, usually you
4
have to pay a fee.
5
type in FICO score, you will get all these companies
6
that are willing to go ahead and give you this
7
information for a fee.
8
that you can also go to your banking institution.
9
Maybe they will just charge you a small fee, but they
To answer your
And if you went on Google, then
And so, I’ll just basically say
10
are willing to run your credit and then actually get
11
that number for you.
12
go online, and then follow their instructions and then
13
go ahead and get the score that way.
14
All right.
15
we have for tonight’s presentation for our Car Buying
16
Webinar with Gregorio Alcantar.
17
the last slide in the Chat Box, if you haven’t done so
18
already, please indicate whether you are a CSUN student
19
or alum and lastly take the survey and let us know how
20
we did.
21
other webinars available to view online.
22
archived on our website at www.csunalumni.com.
23
were a bunch of questions that we weren’t able to
24
answer tonight.
25
feel free to email us at [email protected] and we
Otherwise, you can go ahead and
Thank you.
That looks like it’s about all
You can see there in
If you like this webinar, we do have several
They are all
There
So, if you do have further questions,
33
1
will be happy and pleased to respond to you.
2
event coming up is December 3rd, called Better
3
Advantage Points.
4
of our other events online at www.csunalumni.com.
5
I believe that’s it for tonight.
6
folks for joining in tonight and we’ll see you at our
7
next event.
8
Our next
Feel free to check that out and all
Thanks.
And
Thank you so much for