The Cost of Car Ownership

Fuel Average annual cost $1,681.50 or 11.2 cents per mile This number varies from year to year as gas prices rise and fall Click here to find out what your current or future car’s average MPG is. Source: http://www.moneyunder30.com/

Click here to see how much interest you could pay on your car loan. Finance Charge Finance charges vary per year depending on the interest rate and term of the loan (i.e. 48 months vs. 72 months) Click here to see how much interest you could pay on your car loan. Source: http://www.moneyunder30.com/

Watch Out for Low Monthly Payments Car dealers will ask what you want your monthly payments to be. You want a low one, right? Don’t fall for this. Typically, if the monthly payment is low, your interest rate and/or number of payments is high. This will make the total cost of the car higher. Car dealerships make their money on high interest rates, not the selling price of the car. Total Cost of Car Monthly Payment

Consider a Used Car Certified used cars are a better value than buying new There is more of a mark-up on used cars than new ones, so you can negotiate a better price. The MSRP (Manufactures’ Suggested Retail Price is usually only hundreds of dollars above what the car dealer pays for new vehicles

Source: http://www.balancetrack.org/teensandmoney/ch2.html Research Loans Compare the dealer’s financing with the loan you can get through your financial institution or other lenders. If you go to your financial institution before you start your car search, you will have a better idea of how much you can borrow and, thus, what cars you can afford. Furthermore, you may be able to get a better interest rate with your financial institution than a dealer. Even though dealers often offer incentives, they do not always have the best financing. Source: http://www.balancetrack.org/teensandmoney/ch2.html

Real Life New Car Example Nissan Dealer #1 MSRP “Our Absolute Best Sale Price” Down Payment Monthly Dealer Interest Rate # of Monthly Payments Taxes & Registration (10%) Total Cost of Truck $22,350 $18,500 $7,000 $239 12% 75 $1,815 $26,740 Nissan Dealer #2 MSRP “Our Absolute Best Sale Price” Down Payment Monthly Credit Union Interest Rate # of Monthly Payments Taxes & Registration (10%) Total Cost of Truck $22,350 $19,500 $7,500 $242 1.49% 60 $1,950 $23,970 In the examples above, if you just looked at the sales price, down payment, and monthly payment, Nissan Dealer #1 appears to be the cheapest, but you will actually pay almost $3,000 more for the truck after every payment has been made. 2016 Nissan Frontier

20% Rule Don’t spend more than 20% of your monthly take-home pay on a car payment.

Auto Loan Affordability Calculator Click here to see how much you can afford to spend on a car payment per month.

Depreciation Source: http://www.edmunds.com/car-buying/how-fast-does-my-new-car-lose-value-infographic.html

Insurance Average is $1,115 per year Cost depends on type of car, age of car, driving history, state you live in, etc. Source: http://www.moneyunder30.com/

Maintenance Average cost per year is $913.50 Maintenance includes things like oil changes, tires, brakes, engine repair, etc. Source: http://www.moneyunder30.com/

Registration The cost varies with newer vehicles costing more per year than older ones

Tips for Negotiation a Car Deal Keep a Poker Face If you see an item you want and exclaim loudly that it’s perfect and that you’ve been seeking it for all of your life, there is little incentive for the other party to negotiate. Always keep your cool and don’t display any unusual interest in the item. Source: http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/

Tips for Negotiation a Car Deal Don’t Make the First Offer The other party may offer a price that is a much better deal than what you initially had in mind. If you’re buying, consider the starting point to be the list price, but make it clear that the price is too high. Source: http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/

Tips for Negotiation a Car Deal Use Silence and Time as a Tactic Never respond too quickly to an offer. Pausing or even suspending negotiations can convey that you’re not desperate to close the deal and that you have other options. Silence can force a surprising amount of pressure on the other party as well. Source: http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/

Tips for Negotiation a Car Deal Be Willing to Walk Away If the seller won’t come down to the maximum price you have set for your budget, force yourself to walk away from the deal. If they already have your phone number, they will call you in a day or two. Source: http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/

Loans vs. Lease Running Time: 5:49 https://www.youtube.com/watch?v=wdgDV8JTYow&feature=related

On Your Own