New and Improved!

carbuyer

My name is Michael Fischer. I have been selling automobiles for almost forty years. I began way back in 1973 at Kohlenberg Ford in Burlingame CA . I have had the good fortune to sell automobiles across the United States and have worked with and sold for some of the top manufacturers in our country. The bottom line; I love cars, auto racing, engines and just about anything that has to do with automobiles! Along with these blogs on buying a car will be links to local racing concerns and people who race in and from Phoenix.

In 2003 I had a bit of a physical set back. While I was recovering I decided to return to college. Currently I am attending Arizona State University. I chose to study Social Media Marketing. This seemed like a natural segway to a blog providing information about purchasing the right car for you. The…

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With Tony Stewart at Infineon in 2007 when he won the championship.

This is one of the hardest parts of negotiating a car deal at a dealership. The reasons are simple. First, because most people are emotionally attached to their cars, and second, because they expect to get a much higher amount for their trade. The first point I can’t do much to help you with. When you make the decision to turn in “Betsy” you have to remember that she is just a piece of metal, and has been rusting since the day you bought her. We are to store up treasure in heaven where moths and rust cannot reach. On earth we are visitors, and everything here is temporary! So we shouldn’t get “attached” to physical things. That preaching being done, we as Americans enjoy our cars. Betsy was a great car for her life with you, but today she’s a hunk of metal and she can save you money.

The second point is harder to examine. The value of a trade in is always a point of contention at the dealership. The best way to find out how much your trade is worth is to do some more research. The first idea is to check with Kelly Blue Book at:   http://www.kbb.com/whats-my-car-worth/    and check for the wholesale and retail value of your vehicle. Please remember that if you try to sell your car yourself, your “customer” doesn’t pay taxes on the deal at all, so that is an added incentive to make private buyers pay more for your car. On the other hand your buyer will also know where you live and who you are. This may be a point of contention if something unforseen happens to the vehicle. Please be vigilant and careful if you decide to sell your car personally. It can be fun! Plus, if you like to dicker you may enjoy the process and you will usually get more money for your car if you sell it yourself than you will get at a dealership. There are several reasons for this:

  1. When you buy a car from a top flight store, they usually offer at least a 50/50 ninty day warranty on cars they sell. If they do not they usually offer extended warranties. While we will not go into the pro’s and con’s of that today, they must have the vehicle go through their shop and pass a safety inspection and smog test before it can be resold. This costs the dealership money.
  2. Dealerships are in the business to make money. They buy low and sell high. Most dealerships you will do business with will make “passes” at your trade when you visit the store. They usually start the appraisal process an average of two thousand dollars under wholesale bluebook value and work their way up.
  3. Dealerships employ a lot of people in the shop, the offices that support the dealership, the sales department, and through these people the entire community. Dealerships are labor intensive places. Dealerships also pay huge amounts in taxes to local communities, support local sports, charitable ventures, and do lots of advertising.

There are several ways to get an idea of how much you will get for your trade, but there is only one sure fire way. It’s time to get your feet wet at a dealership! If you follow my suggestion at this stage, you will have a much better experience when you go to finally buy your car.

1. Pick three cars online that you believe you will be interested in. Make these three cars by different manufacturers.

2. Call each dealer and ask for a sales manager. If you know a friend in the business, they may have someone in mind at a dealer you want to visit that will help you. If you don’t know anyone in the business, write me and I’ll find someone for you regardless of what car you want or where you live.

3. Make an appointment to go see the sales manager. Tell him you are not interested in driving cars yet, and that you are getting appraisal values from three dealerships to help you decide which car you want to buy and how much you can afford. Any sales manager worth his salt is going to “turn” you to one of his best representatives. This also gives you a chance to start a rapport with the man who will do the actual math on your car deal. This is always a good idea!

4. If you are pressured to do ANYTHING, or if you have trouble getting an appraisal, you are talking to the wrong dealership. A top flight store will be happy to do your deal your way. If they make y0u feel anything less than totally comfortable, GET OUT!!!! On the other hand, if you feel comfortable and see the model you want and have the time, go for a test drive. Just remember, WE ARE NOT BUYING YET!!!!! After you have the appraisal in hand, you should be able to leave the store without a problem. Take note of the people you talked to and the car you drove if applicable, as this will help you make the final decision on which car you will eventually purchase.

That should be enough for today. Go forth and appraise my friends! God bless. truthbymike@facebook.com hemimike@yahoo.com, @4hemimike, on twitter.

Richard Petty Driving Experience at PIR in Phoenix!

We now have a general idea of how the numbers work for a new car with no trade involved. So far the math has been fairly simple. Today we’re going to throw a trade in into the mix. At this stage I don’t want to get into negotiation about trade values or used car values in general. We will go into that in the near future. For today I want to re-hash the numbers in a car deal using a pre-set amount for a trade so we can look at the numbers again. Our trade vehicle is an exceptionally clean high mileage vehicle, so we negotiate a three thousand dollar trade in amount. For clarity, we’ll use the same new car numbers we did in “The car, the car deal, and the math. Part 2” so we’ll eliminate confusion and you will be able to see the difference having a trade in makes to the car purchase math.

MATH WITH TRADE INSTEAD OF CASH

  1. The price of your car is —————————————-25000.00
  2. The value for your trade is ————————————3000.00
  3. AMOUNT TO BE TAXED IN THE DEAL ———————–22000.00
  4. Sales tax is (see notes below) ———————————-2046.00
  5. Plate fees ———————————————————-420.00
  6. Title fees ———————————————————–4.50
  7. Registration fee —————————————————8.25
  8. Postage fee ——————————————————–4.00
  9. Air pollution fee————————————————–1.50
  10. Documentation fee ———————————————-489.00

Total is —————————————————————24973.25

MATH WITH CASH

  1. The price of your car is —————————————25000.00
  2. The down payment is ——————————————3000.00
  3. AMOUNT TO BE TAXED IN THE DEAL ———————-25000.00
  4. Sales tax is (see notes below) ———————————2325.00
  5. Plate fee ———————————————————- 420.00
  6. Title fee————————————————————4.50
  7. Registration fee ————————————————–8.25
  8. Postage fee ——————————————————–4.00
  9. Air pollution fee————————————————–1.50
  10. Documentation fee ———————————————489.00

Total is —————————————————————–25252.25

 

Notes—- The reason for this simple illustration is to help you understand the mechanics of a car deal. If you think you can sell your car for more money than a dealership will give you, always remember that at a car dealer you are only taxed on the difference between the amount of the new car, and the amount of the trade. If you sell your car for cash, the amount you sell it for had better be at least the amount you want, plus the eventual loss you will experience when you use cash instead of the trade. For older cars, or cars in less than perfect condition, this will be hard to do. As your trade value goes up, the amount saved in taxes on a new car rises as well. Don’t forget to factor this into you trade plans!

Next we’ll talk about trade in values! How are you doing so far? If you have questions please write me at truthbymike@yahoo.com or see my site at truthbymike@facebook.com

 

The calm before the storm.

We are almost ready to go shopping. The last thing to get a good idea about the actual numbers in a car deal. This sounds complicated, but in reality it’s fairly simple.

Any car dealership works like this:

  1. The price of your car is ——————————25000.00
  2. Sales tax is —(see notes below)———————–2325.00
  3. Plate fees are (see notes below)————————420.00
  4. Title fee is —————————————————4.50
  5. Registration fee is ——————————————8.25
  6. Postage fee is ———————————————–4.00
  7. Air pollution fee is ——————————————1.50
  8. Documentation fee (see notes below)—————– 489.00

9.   Total is ——————————————————28252.25

First note— Sales tax is different in every state, and in some states it’s also varies in different counties,  so you should find the tax rate for major purchases in your area. I found a quick site that allows you to simply enter the zip code for your area and get the tax ratio at—–    http://www.zip2tax.com/z2t_lookup.asp?inputZip=85032 —–           Once you have the tax ratio (mine in Scottsdale is 9.3% just multiply 25000.00 by 9.3% to get the sales taxes.

Second note — Plate fees are different for different states as well. You can call your local DMV for help or go to—  http://www.azdot.gov/mvd/RegRenewal/RenewalInfo.asp   —this will give you an accurate amount for your plates, but it’s a set amount that is non negotiable, the money goes to the state. There is an option in some states to purchase new plates for more than one year when buying a car. This is completely up to you but remember that if you pay the extra money in the car deal, you will be paying interest on that money for the term of your loan. This does not apply if your purchase interest rate is zero. But that’s still ahead.

Here is our first point of contention in a car deal. The infamous “doc fee”. We’ve all seen it, every dealership has it, and it’s a small chunk of change. The doc fee is referred to as the documentation fee for the paperwork for your deal. The real truth in my experience is that the doc fee pays for the title work and registration of your car, and it also pays for the lights, the building, the gals behind the scenes working in back to do your paperwork, to transfer all the documents to insurance companies and banks and the DMV, and everyone else associated with your car. I have seen many customers work for hours to get every penny of profit taken out of a car deal, and then try to avoid paying the doc fee as well. While I understand that our goal is to get a great deal, we also have to remember our values in some instances. God loved us so much that he GAVE his only son so we might live. We are supposed to be cheerful givers as well. Paying the doc fee is a reasonable request for a “brick and mortar” store to ask for a reasonable service. There comes a time when cutting more money is not a good thing as Christians, and we should show a certain amount of generosity in everything we do or it will not be blessed or annointed. That is my view as a Christian.

More next time. If questions write me at truthbymike@yahoo.com

The car, the car deal, and the math.

Posted: June 17, 2011 in Uncategorized
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My first race car, Soap Box Derby, San Francisco, Ca 1970

To this point we’ve talked about getting your credit together, getting some trade in information, and getting everything ready to go shopping. So let’s go over our list:

  1. Credit is checked at the bank or online and any issues are repaired.
  2. You have applied for a loan at your bank and are approved for an amount at a rate you can live with.
  3. You have your loan approval in your hand.
  4. You cleaned your trade.
  5. You have a current insurance voucher in your car.
  6. You got your current payoff if there is a loan on your trade, or your title if you own it outright.
  7. You went online and did some research to find a ballpark value for your trade in, and have that in hand.

Congratulations! You are among the few people in the entire country that is actually ready to go shop for a great deal on a terrific car! Most people buy at the spur of the moment or without the proper planning and don’t do nearly as well as you will when you find the car you want. But that brings us to the next step. Finding the car you want AND can afford!

In the old days, (1950’s and 60’s) there were only three major players in the car market in the USA. Today there are nearly as many car makers as there are people who buy them! What kind of car are you looking for? What model of car would make you happy and fill your needs? Do you ferry kids? Do you want a cool looking ride with deep growls and chirping tires? Perhaps you are looking for a toy hauler, or a work vehicle. What about a gas miser? There are a thousand types of car, and a thousand prices for them. This is a decision only you can make, but I can give you some suggestions to help you on your way.

No matter what kind of car you want to buy, you are probably going to need help narrowing down the field. There are manifold cars in every class, (pun intended) and knowing where to look for clues as to the best built, best safety rated, most attractive, and closest fit for you is your choice. You can join consumer reports at a fee and get all the information on all the cars marketed in the USA. If you want to avoid the cost you can go to sites like edmunds.com. Local dealerships have also come a long way online. Today you can go to the website at the dealer you plan to visit and find all the information about the car you’re interested in. Most of the really good sites allow you to “paint” your car and add the interior colors you want online, and see if that combination is available at that store, along with all the additional equipment you are looking for. Please remember that these sites are biased towards their own products. One of the best sites I have seen is at the North Scottsdale Volkswagen site in North Scottsdale, Arizona.  http://www.vwnorthscottsdale.com/HomePage    This is a terrific site. You can also search for good deals on financing your car at a top flight dealer site. REMEMBER, WE ARE SHOPPING FOR OUR RATE AS WELL AS OUR CAR! So let your fingers do the walking and research the car you are looking for. If you have a neighbor who has a car similar to what you have in mind, don’t be shy, go and ask him/her about their ride! Everyone loves to talk about cars. Especially their car. You might even make a new friend, and get an opportunity to invite them to church Sunday! Remember also to ask for a referral to the salesman who sold them their car if they got a good deal. The more information the better the decision. Next we’ll talk about shopping in person. Visiting a dealership.

If you have any questions or comments please write me at truthbymike@yahoo.com

Andrea Robertson, Robertsonrace.com first woman to podium at the Lemans 24 hour endurance race since 1931 CONGRATULATIONS!

The trade in is one of the most difficult parts of negotiating for a new vehicle. Everyone has an idea of what their car is worth, and it seems like that amount is often higher than the “appraisal value” dealers are willing to pay. Before we start to analyze the truth about trade-ins let’s get rid of a few myths about negotiating the value of your trade.

First- DO NOT park down the street and walk to the dealer, and then announce you have a trade after negotiating the sale price of the car you want to purchase. Often this requires everyone to go back to square one and start over, because the taxes change, the license fees change, and the whole deal will look different.

Second- DO detail your car!!! You can improve the value you receive for your trade by hundreds, sometimes thousands of dollars just by having it clean and smelling good when the manager looks it over at the store. If he can see the car on his used car lot, or easy to wholesale to someone who will buy it without having to do lots of work it will be worth his while to give you a good appraisal value.

Third- Do know your exact payoff. Knowing your payoff so the dealer doesn’t have to go search for your bank’s information will make your negotiation go faster, and get you out in your new car sooner.

Fourth- Do MAKE SURE YOU HAVE A CURRENT INSURANCE VOUCHER IN YOUR CAR! It is amazing how often I see customers come in to buy a car with expired or non-existent insurance information. It is not only required before a dealer can release you in your new vehicle, it is the law in every state in the country. You must have current proof of insurance in your car at all times.

Fifth- Remember that any dealership will run a car fax on your trade. This is standard procedure for every major dealer in the country today. If you’re car has been in an accident it will probably show up. Keep in mind that most stores offer car fax when they sell you a car, so if your car has been in an accident and repaired it will be worth less as a result. You should go to   http://www.kbb.com/whats-my-car-worth/ to get a solid idea of what the dealers will be showing you for your trade in. This is a guide only and is not cut in stone, but it will give you an idea of the value of your car. Also notice that the trade in value is not as high as the retail “sell it yourself” value. That is because you are accepting all the risks of selling your own car. These include people knowing where you live and who you are. If there is a problem after the sale, you may have a problem. You do the advertising, you negotiate the price, and you accept the responsibility.

Sixth -and most important-  There are several realities that are just facts about trading a car. Dealers take cars in at wholesale and sell at retail. That is what they are in business to do. A good dealer will take in your car, detail it, safety inspect and repair it, offer a warranty to the next owner because of the inspection and repair done by the shop, and sell the trade at a profit after all that work is completed. Dealers are expensive to operate and the competition is fierce. A really good dealer will do the very best to make you an offer that is honest and will allow you to get your new car at an affordable price and still allow them to refurbish the trade and make a few hundred dollars after all the dealing is done. That is the honest truth. If a dealer tries to offer a trade in amount that is much lower than everyone else, RUN! There are still good and bad dealerships in every city. This is sad, but true. Do your homework, ask friends who have had good experiences who they recommend, or write me. I will find you a good store with a good sales representative for ANY make or model.

If you need more advice or want to talk to me, write me at truthbymike@yahoo.com  and I will do my best to help.

AJ Foyt

Before I start my insights into how to finance a car I have to mention one fact. According to biblical principals we are not supposed to borrow money. While this is true, it is also true that cars are a necessity in the USA. It is also true that vehicles have come a long way over the last ten years. Safety and longevity in all the major manufacturers products have made giant strides. So newer cars are safer, and more expensive than ever before. The idea of saving up to buy a car is noble, and Godly, but not very practical today. So the next best thing we can do is to be the best stewards of the blessings bestowed upon us and find a responsible arrangement for a superior product.

So, you want to buy a car. Congratulations! If you prepare correctly you will have a great time and get a terrific vehicle. Most people are more worried about the type of car they want than they are about the actual terms of the sale. This is not the right way to approach getting a new car.

The first thing to consider is what your budget can handle. There are several online budgeting tools that will help you do the pencil work; “bankrate.com” is one that comes to mind that will help you compute how much loan you can afford and how much it will cost. Remember to add the taxes in your area, if applicable, as well as the license fees to get a more accurate idea of how much you can truly afford. I have had hundreds of people come to me over the years thinking they have their payment all figured out, and are aghast when they get their figures because they forgot the taxes. Your department of motor vehicles will get you a ballpark figure, as will any top car salesman. If you can’t find one, write me and I’ll do my best to help.After you have subtracted your rent/mortgage, added all your expenses per month, put away your 10% tithe, and looked at what is left please remember to pay yourself too. Some people have forgotten this important step and ended up living to pay for their car. I do not want anyone to end up this way. Your car payment should not be more than 25% of your total free income after your bills are paid. THIS SHOULD ALSO INCLUDE YOUR INSURANCE PAYMENT! Your free income is all your free money after all your expenses per month.

For the sake of time and to help clear up confusion I’m not going to cover leasing today. That is a horse of a different color! When you have decided what you can afford to pay per month for your car, the next step is to figure out what you can afford for a down payment. This is the easiest way to reduce your monthly payment and increase the caliber of car you can afford! Save a good down payment to earn more car for the money. Your trade in is also part of your down payment and appraising the trade is a subject for another day.

Now you have a good idea of what you will use for a down payment and what you can afford per month for your car. The next thing to research is your credit. Your credit rating is gleaned by looking at your “Isaac Scores” . Your Isaac Scores are at the top of your credit report history and are a number that usually ranges from 500 to 900. The better the rating, the lower the interest you can qualify for. According to new rules going into effect this year, you should be given a copy of your credit report average Isaac Score, see:>  http://www.scoreinfo.org/Disclosure-Notices/Credit-Score-Disclosure-Notice.aspx   <if your Isaac Scores are used by anyone to determine interest rates in your case. If you go to “bankrate.com” you can plug in an interest rate and get a monthly payment, but is your credit good enough to get you the rate you want? That is the question! The next step in your preparation to go shopping is to go by your local bank. There are two reasons for this. First, your bank’s loan officer will go over your credit with you and pre-approve you for a loan. If you have credit problems or small collections on your report, your bank will be happy to help you clear them up. If they are not willing to take the time to help, you need a new bank! The second thing your bank will do is give you an approval for a loan at a specific rate of interest. Please remember that most dealers have their own financing which they will offer at a better rate than the bank, and some also offer special financing for good credit, I.E. zero interest loans. If you don’t want to go to the bank to research your credit rating, you can get a copy of all three credit reporting bureaus for free at   https://www.annualcreditreport.com/cra/index.jsp    < It is always easier to shop knowing you already have a loan at an acceptable rate, and the dealership will be willing to compete for your finance business by beating that rate. So when you go shopping for your car, you always shop for your interest rate too! The best deal is the best car for the best rate, not just the best car.

If you need help or more information write me at trthbymike@yahoo.com or go by truthbymike@yahoo.com.