What is it about Spring that makes drivers start checking auto sales? Possibly, the dealers shoveling the snow around the lot, flying balloons, and setting up Specials as you drive to and from work contribute to the psycho-emotional instincts to browse the lot on the way home. Just as you have to mentally “see” yourself Debt Free, you can see yourself driving that one car parked in the same taunting space. Same game of imagery, but one is a Debtly-Pit, which hopefully you are about to exit! If you’ve read any of my coaching materials, you have already learned my pay-off rule: Once you’ve Paid-In-Full for your car or any debt or loan, Continue Making Equal Payments to Your Savings for Your Next Purchase! Then, whatever you decide to purchase, you will have CASH in the bank plus your Trade In dollars. At least then you won’t return to high monthly payments and finance charges.
Maybe it is time for you to begin shopping for a new vehicle. As difficult as it seems, you must exercise restraint! First, tell your very sacrificial self: “Yes, I do deserve a new (newer) car. Yes, I can afford one. Yes, I could qualify for a LOAN.” That should be the line that sets off the Debtly Alarm system and brings you to your senses! Can you afford the PURCHASE or simply the PAYMENTS right now? Your next declaration should be, I can afford payments, but I CHOOSE to use wisdom over Debt-Diving! If you can purchase a car now, play Deal the Dealer! Do your research before you even let a Dealer suspect you’re shopping! Here’s an objective Checklist to keep you from getting stung!
- Check every make, model and style for the very best car for your money. Not the cheapest. The bestyou can currently handle and NOT slide into Debt-Ditches. When you don’t like a car, you don’t take excellent care of it. You have to appreciate all that it is a vehicle to and from your source of income, whether it was your dream car or just a ride on the way to the dream. Never buy anything you can’t really appreciate. Over-spending and under-spending can cause buyer’s remorse. You will resent and abuse the vehicle and destroy your resale advantage.
- Check dealer re-sale for your current car as well as the one you’re shopping. Evaluate mileage, maintenance, fuel, parts, tire replacement. Be sure you won’t be sold a lesser car with higher costs to maintain than your faithful old car.
- Check the price margins from what you spent for your car against the price a dealer will now offer you in a trade. You KNOW right up front the Dealer makes money on “Up-Sell.” Avoid giving your car in trade to find you were sold a shell of a car, you now have to spend thousands to get even the simple basics you had in yours. (I bought in winter and did NOT realize my shiny red car did NOT have factory air conditioning!!)
- Check the history of the car you are shopping. Was it a rental, lease, flood or hurricane survivor? If you decide to lease (not recommended), you may be “settling” for something a dealer needs to keep in motion at your expense. You may be paying for things you originally didn’t even want. Choose the best deal for the dollar that will serve you well for a minimum of five years. Set your payments to pay it OFF in less than three years. Stay In Command of the Deal!
- Check your Auto Insurance. Please don’t make me tell you about the dream car I finally bought, only to find that my insurance almost doubled because it was a popular little sports car! I had a great driving record and insurance rate and didn’t even think….! Remember Depreciation? Insure for what you pay to replace the car, NOT its off-the-lot value. If you pay $25,000, drive it off the lot and get totaled, your insurance will only reward what it is worth. You owe $25,000. Insurance pays$15,000, and you have a $10,000 balance due to the bank and NO VEHICLE. If you are accident prone, check on a Guaranteed Auto Protection insurance that will cover the difference for you.
- Check your neighborhood, workplace, favorite hang-outs before selecting a car you’re afraid to park unattended. Sad thought, but sometimes your work or social life takes you into places where people do not appreciate your nice, shiny sports car. I took my ’65 Corvair convertible (Seafoam blue, matching interior, white top) to Geneva On the Lake with my best friends; danced and partied half the night, only to come out and find my pretty little convertible top SLASHED!!
Because most of us need a car for transportation, NO ONE will admit that buying a car is Emotional Spending. Since it is, just do that right now. Then, take command and do your check list. It’s great to feel great about your purchases. You respect and care better for things when you have invested feelings. Feelings are not always real. Cash is. So, get out your New Car Bug Spray and cover yourself with Debt-Guard! Meanwhile, polish the winter drabs off your faithful car, invest a little in it, and let it be good to you another year or two. Whatever you spend on shining it up will be much less than what you would pay just in finance charges for a new one.