Local Real Estate Comments and Ramblings

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A few car buying tips

In my life before real estate I was in the car business. Its a terrible business to be in but that's a different story.  Walking in to a car dealership actually really makes me nauseous. I got tired of having to beat people up (figuratively) to make a sale, putting up with obnoxious sales manages was a whole other story.

I much prefer helping people make sound financial decisions regarding the purchase or sale of their home.

If you are in the market to buy a car here are a few tips that I would give, In no particular order :

Figure out what car you want before you go shopping.

If you are financing, Arrange financing before you go shopping. Although I highly recommend NOT financing at all.. If you finance a car you are paying interest for the guaranteed depreciation.

Shop on the internet. All dealers have internet department now and they will quote you prices over the net.  Make sure you ask for the total drive out price including all taxes and fees.  They all have stupid junk fees.  Don't argue with it just shop around.

 

If you shop on the 'net, know what you want, and have your financing ready, you can avoid this guy ....                                                                                                   Just show up, meet the internet rep, go for a quick test drive and inspection, then sign the papers and go home. 

 

Buy used. The average new car depreciated about 10-15% the fist year and about 20-30% during the first 3 years.  If you buy a $30,000 dollar car that's a $9000 dollar depreciation loss. $9k is a lot to pay just to have a warranty and the new car smell. And remember , if you financed the car, you paid interest on the $9k. A 2 year old car with low miles is almost new and still has a little factory warranty remaining, plus it has already taken a big hit on depreciation.

If you are financing there is nothing wrong with using the dealer financing as long as you already have your own financing available.  Compare rates.  If they can compete then what's the difference? Just be sure of all your figures so the dealer doesn't try to slide anything in on the deal.

Again, my recommendation is to buy used and pay cash. Many states will make you pay sales tax if you buy used from a dealer.  Here in Georgia that is the case, but there is no tax if you buy from a private party.

Keep your cars for a long time and don't trade too often.  Cars are expensive and a terrible investment.  Keep it a long time and get your moneys worth out of it.

I could probably think of a lot more but this is enough to be dangerous anyway :-)

Good luck. 

If you are looking for somebody to help you make wise choices regarding the purchase or sale of your next home in Powder Springs, Marietta, Kennesaw, Acworth, Dallas, Hiram, or the surrounding areas of Georgia, please give me a call.

 

*****

 

 


Bob Southard
Broker - Owner  Atlas Realty Service LLC #75911

O:678-439-SOLD(7653)

CALL ME DIRECT: 770-656-9134

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Comment balloon 8 commentsBob Southard • April 10 2008 10:15AM

Comments

Thanks for the post.  I don't think I would ever buy a brand new car.  Although temping the hit you take in the first few years isn't worth it.  I'd rather have someone else pay for that.  Do you see a huge hit on resale if the car has over 100,000 miles?  I know most people have cut offs at each 25K, but isn't 100K a big one?  Also, is it better to sell by owner rather than trade in if you are buying from a dealer?  Thanks,

Ryan

Posted by Ryan Bretzel (Keller Williams Premier) almost 10 years ago

Ryan, yes it's a huge hit over 100k miles.  Almost all of todays cars are very well built and if they are well maintained I think 200k is the real breaking point.  I bought my Jag with 140k on it and my wifes van had 89k on it when we bought it.  The Jag (after 2 years) is up to about 160k now and the van is about 180k (after about 6 years). 

Selling your own car is sort of like selling a home FSBO.  The reality is that it is hard to do. Have a good idea what your is worth and make your decision. But from experience I would say go ahead and trade with the dealer. Again, know your figures before you get there. The other benefit to trading, here in georgia anyway, is that you only pay sales tax on the difference in price between your trade and the new purchase.

If you walk in to a dealership without being prepared you will be overtaken by new car(or used car) fever and the new car smell. It will be an expensive trip.

Posted by Bob Southard, e-Pro - Cobb, Cherokee, North Fulton (Atlas Realty Service, LLC) almost 10 years ago

I am so glad you mentioned buying used and paying cash... that is what my economics teacher said to do back in 1978.....

And it still holds true today!!

BTW... The next car I buy...I will buy at the auto auction and it will be a cash deal... I will pay the guy who takes me there $500 for the priviledge...

YIPPY!!!

=-)

Posted by Alexander Harb, Dallas, Texas Real Estate Investing (Knights Investing) almost 10 years ago

Bob:

The good news is the amount of research we are able to do today before buying.

Posted by » Bill Burress Nationwide Mortgage Originator (» Bill Burress Nationwide Mortgage Originator) almost 10 years ago
Great advice!  It really does make me sick when I see how they depreciate.
Posted by John Hersey, e-PRO Realtor (Berkshire Hathaway HomeServices Homesale Realty) almost 10 years ago

Bob,

20 years ago I would not even considered keeping my car over 100k miles....now I have made 200k on my last 3 and I am sure this current one will get there too.

I now do this upkeep because of the drastic depreciation cars have....

Posted by Daniel J. Brudnok, REALTOR, SRES, e-PRO,ABR,GREEN,CSP (Berkshire Hathaway Home Services Fox & Roach, REALTORS - Exton - PA License Number #RS225179L ) almost 10 years ago

Thanks for the advise.  Many consumers out there are unaware of how easily you can get youself into a care you shouldn't be in.  Thanks for the info.

Posted by Jacob Webster, Indiananulls Senior Mortgage Consultant (Sagamore Home Mortgage, LLC.) almost 10 years ago

I WOULD think about a lease, since the monthly payments are tax deductable......

BUT the gas milage would have to be fantastic...if I am going to lease a car.... I would not want the milage cost to be more than my lease payments.... I would get upset because as far as I know, you can't deduct BOTH lease payments AND milage...

Posted by Alexander Harb, Dallas, Texas Real Estate Investing (Knights Investing) almost 10 years ago

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