Sunday, January 04, 2015
Sunday, December 28, 2014
Bad Credit Loans - A new attitude toward used car purchasing
Why buy a used car? Why not? According to Robby Stamps, automotive consultant and author of the online used car buying guide www.goodasnew.com, a recent automotive study showed that 45% of families earning $75,000 or more would consider buying a used car.
"The stigma attached to owning a used car is melting away," Stamps says. "Because of the competitive climate to sell, cars now are a different animal. In the past 10 to 15 years, there have been tremendous improvements in technology, design, and metals."
Cars are--to borrow a slogan--built to last, with lengthier warranty options. For example, you could purchase a 3-year-old car and it will still fall under factory warranty. Some warranties are good for up to seven years or 100,000 miles.
"This is also becoming more of a buyer, s market," explains Darryl Brooks, author of How to Save Thousands on Your Next Car (Consumer Consulting Services, $16.95) and president and CEO of Consumer Consulting Services, owners of the buying and leasing site www.autobysave.com. "The growth of leasing has loaded the marketplace with used cars. Consumers have more of a choice."
Why are many people still skeptical? Cars have advanced, but the depreciation curve, usually determined by banks, has not. "There is no reason why a 4-year-old car with 40,000 miles should be worth 35% less than when it was first purchased. That car is an excellent bargain," says Stamps.
FINDING YOUR PEACH
There are several places to buy a used car--new car dealerships, used car dealerships, auctions, and private sellers. Where you buy will depend on what you're looking for and what you're willing to spend. Used car prices could range from $1,500 to $60,000. New car dealerships are likely to charge the most for a car.
"Used cars are bought very cheap by the dealership, because the seller is usually anxious to get their new car," explains Brooks, "so the markup is high. They tend to make at least a few grand in profit, with the consumer thinking they got a great deal. But a reputable dealership will sell sound cars and will offer financing."
Used car dealerships offer the widest variety, particularly of hard-to-find vehicles. These cars come from various places, including auctions and leasing and insurance companies. You may have significant history to consider. But, Stamps says, mom-and-pop dealerships usually meet your specifications on a car, or come close.
Auctions can be a great place to buy luxury vehicles--but not a public auction, warns Brooks. The quality of the cars sold is questionable, and you typically won't know what you're getting until you've bought it. Contract with a dealer or auto broker to buy at a closed dealer auction. The contract fee ranges from $500 to $1,500, but you could save up to $2,000 on the price of the car.
Buying from a private seller could be the least expensive route, since most private sellers just want a decent profit. It can also be the most exhausting, since it requires locating, calling, and then visiting each one. The car's history may be more questionable. Private sellers tend to mask the truth.
SAVVY SHOPPING TIPS
* Don't believe just your mechanic. "Mechanics are notorious for misdiagnosing an auto problem," offers Stamps. "Get an extended warranty to protect yourself. You will have to spend at least $5,000 to $6,000 to get a car that's eligible for a warranty."
* Don't believe long-standing industry references as reliable sources. Stamps explains that "blue books" often list inflated retail prices to protect the car dealers, their biggest subscribers. "Many dealers advertise that their prices are below blue book rates. It's a ruse to make consumers think they're getting a bargain."
* Establish a budget beforehand. Factor in car options, loan rates, and insurance. Stamps uses this as a guideline: Subtract your fixed expenses (rent, credit card payments, utilities, etc.) from your monthly take-home pay. Use one-third of what remains for your monthly car payment and maintenance.
* Never buy the first year's production of a new model. Says Stamps, "No one knows for sure how a new model is going to perform in the real world."
Before You Buy
* Do extensive test drives before you purchase any vehicle.
* Check out these Websites: www.edmunds.com for True Market Value (TMV) pricing; www.autotrader.com to review vehicles that meet your requirements and budget; and www.warrantybynet.com for extended warranty information and free quotes; www.autobysave.com for money-saving tips; and www.goodasnew.com is the most comprehensive site for used car purchases.
* Run the Vehicle Identification Number (VIN) through www.carfax.com for a complete car history, including odometer reading.
"The stigma attached to owning a used car is melting away," Stamps says. "Because of the competitive climate to sell, cars now are a different animal. In the past 10 to 15 years, there have been tremendous improvements in technology, design, and metals."
Cars are--to borrow a slogan--built to last, with lengthier warranty options. For example, you could purchase a 3-year-old car and it will still fall under factory warranty. Some warranties are good for up to seven years or 100,000 miles.
"This is also becoming more of a buyer, s market," explains Darryl Brooks, author of How to Save Thousands on Your Next Car (Consumer Consulting Services, $16.95) and president and CEO of Consumer Consulting Services, owners of the buying and leasing site www.autobysave.com. "The growth of leasing has loaded the marketplace with used cars. Consumers have more of a choice."
Why are many people still skeptical? Cars have advanced, but the depreciation curve, usually determined by banks, has not. "There is no reason why a 4-year-old car with 40,000 miles should be worth 35% less than when it was first purchased. That car is an excellent bargain," says Stamps.
FINDING YOUR PEACH
There are several places to buy a used car--new car dealerships, used car dealerships, auctions, and private sellers. Where you buy will depend on what you're looking for and what you're willing to spend. Used car prices could range from $1,500 to $60,000. New car dealerships are likely to charge the most for a car.
"Used cars are bought very cheap by the dealership, because the seller is usually anxious to get their new car," explains Brooks, "so the markup is high. They tend to make at least a few grand in profit, with the consumer thinking they got a great deal. But a reputable dealership will sell sound cars and will offer financing."
Used car dealerships offer the widest variety, particularly of hard-to-find vehicles. These cars come from various places, including auctions and leasing and insurance companies. You may have significant history to consider. But, Stamps says, mom-and-pop dealerships usually meet your specifications on a car, or come close.
Auctions can be a great place to buy luxury vehicles--but not a public auction, warns Brooks. The quality of the cars sold is questionable, and you typically won't know what you're getting until you've bought it. Contract with a dealer or auto broker to buy at a closed dealer auction. The contract fee ranges from $500 to $1,500, but you could save up to $2,000 on the price of the car.
Buying from a private seller could be the least expensive route, since most private sellers just want a decent profit. It can also be the most exhausting, since it requires locating, calling, and then visiting each one. The car's history may be more questionable. Private sellers tend to mask the truth.
SAVVY SHOPPING TIPS
* Don't believe just your mechanic. "Mechanics are notorious for misdiagnosing an auto problem," offers Stamps. "Get an extended warranty to protect yourself. You will have to spend at least $5,000 to $6,000 to get a car that's eligible for a warranty."
* Don't believe long-standing industry references as reliable sources. Stamps explains that "blue books" often list inflated retail prices to protect the car dealers, their biggest subscribers. "Many dealers advertise that their prices are below blue book rates. It's a ruse to make consumers think they're getting a bargain."
* Establish a budget beforehand. Factor in car options, loan rates, and insurance. Stamps uses this as a guideline: Subtract your fixed expenses (rent, credit card payments, utilities, etc.) from your monthly take-home pay. Use one-third of what remains for your monthly car payment and maintenance.
* Never buy the first year's production of a new model. Says Stamps, "No one knows for sure how a new model is going to perform in the real world."
Before You Buy
* Do extensive test drives before you purchase any vehicle.
* Check out these Websites: www.edmunds.com for True Market Value (TMV) pricing; www.autotrader.com to review vehicles that meet your requirements and budget; and www.warrantybynet.com for extended warranty information and free quotes; www.autobysave.com for money-saving tips; and www.goodasnew.com is the most comprehensive site for used car purchases.
* Run the Vehicle Identification Number (VIN) through www.carfax.com for a complete car history, including odometer reading.
Monday, February 11, 2008
Is credit-card debt cramping your cash flow?
Mention the word downsizing and what usually comes to mind are negative images of job loss and financial deprivation. But downsizing can be viewed another way--as a carefully structured plan to reduce and even eliminate your debt.
There's no special secret to achieving effective debt reduction, but there is a path you should follow. As a financial counselor, I guide my clients in moving beyond practical skills, like checkbook balancing and budgeting, to exploring the emotional and spiritual traits that subconsciously affect their spending habits. Identifying and understanding your belief systems and attitudes about money and the core issues of why you create so much debt are essential to putting a successful debt-reduction plan in place.
I recall one client who had purchased a fur coat she could ill afford. At the time of her "retail therapy," she was angry and depressed because her husband was out of town on their wedding anniversary. After reviewing her spending patterns and leveling with herself, she finally acknowledged that many of her impulse-shopping binges were efforts to make herself feel better about voids caused by unmet emotional needs.
If you're tired of being overwhelmed by debt, living from paycheck to paycheck and wondering why you can't get ahead, there is a way out. When practiced consistently, these five simple steps are guaranteed to bring down the size of your debt.
THINK HOLISTICALLY If you want to change your spending patterns, you'll have to change your thought patterns. * Work on developing a more positive belief system about money. Because our beliefs are typically formed in childhood, we tend to either emulate or go 180 degrees from what we have seen, heard or absorbed from family members, friends and others close to us. What childhood experiences regarding money are you re-creating as an adult? What effects are they having on your current financial life? For instance, if you were raised with the message "Money is the root of all evil," you could subconsciously believe that money is bad. This could explain why you quickly get rid of money by spending it or giving it away.
Or you may believe "I just don't understand money," when in fact, it's high finance that you don't understand. Join the club! To better understand your finances, you don't need a Ph.D. in economics. Some simple arithmetic will do. Get clear about how much money comes in and goes out monthly. Balance that checkbook. These very basic measures can help keep you "in the light" about your money and make you feel more financially empowered. *
Boost your self-esteem. The way we handle money is a direct reflection of how we feel about ourselves. Dr. Brenda Wade, a San Francisco psychologist, recalls working with a millionaire client who wouldn't pay her Neiman Marcus bill. This particular woman's inner critic was constantly telling her that she wasn't good enough, smart enough or successful enough. Her sense of self-worth was so low that she always found ways to sabotage herself. One way was by not paying her bills, which created unnecessary drama and chaos in her life. For women who chronically need to raise their selfesteem, Wade suggests sitting quietly and affirming to yourself I am enough. I have enough. I know enough. I do enough. Repetition is a powerful way to reprogram your subconscious to accept these ideas as reality. *
Develop a prosperity consciousness. Meditate on positive affirmations that can help you envision a life of abundance, such as: All my wants and needs are met, because God is my source or I deserve the best that life has to offer. Visualize prosperity and success. Use your imagination to see your life as you would like it to be. Hold the vision of yourself being surrounded by loving, supportive and nurturing family and friends. See yourself living in your dream home and having an emergency savings account that will tide you over in case of need. Let your imagination expand as you consider all your heart's desires and see yourself with all your needs and wants met.
There's no special secret to achieving effective debt reduction, but there is a path you should follow. As a financial counselor, I guide my clients in moving beyond practical skills, like checkbook balancing and budgeting, to exploring the emotional and spiritual traits that subconsciously affect their spending habits. Identifying and understanding your belief systems and attitudes about money and the core issues of why you create so much debt are essential to putting a successful debt-reduction plan in place.
I recall one client who had purchased a fur coat she could ill afford. At the time of her "retail therapy," she was angry and depressed because her husband was out of town on their wedding anniversary. After reviewing her spending patterns and leveling with herself, she finally acknowledged that many of her impulse-shopping binges were efforts to make herself feel better about voids caused by unmet emotional needs.
If you're tired of being overwhelmed by debt, living from paycheck to paycheck and wondering why you can't get ahead, there is a way out. When practiced consistently, these five simple steps are guaranteed to bring down the size of your debt.
THINK HOLISTICALLY If you want to change your spending patterns, you'll have to change your thought patterns. * Work on developing a more positive belief system about money. Because our beliefs are typically formed in childhood, we tend to either emulate or go 180 degrees from what we have seen, heard or absorbed from family members, friends and others close to us. What childhood experiences regarding money are you re-creating as an adult? What effects are they having on your current financial life? For instance, if you were raised with the message "Money is the root of all evil," you could subconsciously believe that money is bad. This could explain why you quickly get rid of money by spending it or giving it away.
Or you may believe "I just don't understand money," when in fact, it's high finance that you don't understand. Join the club! To better understand your finances, you don't need a Ph.D. in economics. Some simple arithmetic will do. Get clear about how much money comes in and goes out monthly. Balance that checkbook. These very basic measures can help keep you "in the light" about your money and make you feel more financially empowered. *
Boost your self-esteem. The way we handle money is a direct reflection of how we feel about ourselves. Dr. Brenda Wade, a San Francisco psychologist, recalls working with a millionaire client who wouldn't pay her Neiman Marcus bill. This particular woman's inner critic was constantly telling her that she wasn't good enough, smart enough or successful enough. Her sense of self-worth was so low that she always found ways to sabotage herself. One way was by not paying her bills, which created unnecessary drama and chaos in her life. For women who chronically need to raise their selfesteem, Wade suggests sitting quietly and affirming to yourself I am enough. I have enough. I know enough. I do enough. Repetition is a powerful way to reprogram your subconscious to accept these ideas as reality. *
Develop a prosperity consciousness. Meditate on positive affirmations that can help you envision a life of abundance, such as: All my wants and needs are met, because God is my source or I deserve the best that life has to offer. Visualize prosperity and success. Use your imagination to see your life as you would like it to be. Hold the vision of yourself being surrounded by loving, supportive and nurturing family and friends. See yourself living in your dream home and having an emergency savings account that will tide you over in case of need. Let your imagination expand as you consider all your heart's desires and see yourself with all your needs and wants met.
Tuesday, June 28, 2005
Steps to building good credit
Many experts say that having no credit can be just as bad as having bad credit, because there is no history to say if you are a good or bad risk when requesting loans.
Building a good credit record is no easy task. It may be frustrating and tedious at first, but following are some tips to make the journey to credit freedom a little easier.
* Try a secured card with a banking institution for 6 to 9 months.
A secured card is very much like a savings account where you may put $500 down as a deposit, which serves as collateral. Some institutions will issue a credit card with a credit limit usually no greater than the amount on deposit. Make sure the issuer reports your timely payments to one of the three major credit bureaus. By using your card responsibly and paying what you've spent every month, you will see your credit score improve.
* Establish credit by applying for one or two credit cards.
Setting up revolving debt credit cards like Visa, MasterCard, American Express, Discover or any department store credit cards is important to your credit history because it's a self-managed account and you know you have to pay an installment at least once a month. Financial advisors warn you to use them carefully and pay them off on time each month, or at the very least, pay the minimum amount required.
* Keep credit card balances low.
Don't "max out" your credit cards. Credit scores are based upon what percentage of the credit line is being used.
* Pay your bills on time.
How you've paid your bills in the past can indicate how you'll pay in the future. Credit scores emphasize your recent payment record, so if you've been late, start paying on time.
* Don't apply for too many loans or new accounts.
Requesting a lot of credit in a short time span may prompt lenders to be concerned that you won't manage your debt well.
Building a good credit record is no easy task. It may be frustrating and tedious at first, but following are some tips to make the journey to credit freedom a little easier.
* Try a secured card with a banking institution for 6 to 9 months.
A secured card is very much like a savings account where you may put $500 down as a deposit, which serves as collateral. Some institutions will issue a credit card with a credit limit usually no greater than the amount on deposit. Make sure the issuer reports your timely payments to one of the three major credit bureaus. By using your card responsibly and paying what you've spent every month, you will see your credit score improve.
* Establish credit by applying for one or two credit cards.
Setting up revolving debt credit cards like Visa, MasterCard, American Express, Discover or any department store credit cards is important to your credit history because it's a self-managed account and you know you have to pay an installment at least once a month. Financial advisors warn you to use them carefully and pay them off on time each month, or at the very least, pay the minimum amount required.
* Keep credit card balances low.
Don't "max out" your credit cards. Credit scores are based upon what percentage of the credit line is being used.
* Pay your bills on time.
How you've paid your bills in the past can indicate how you'll pay in the future. Credit scores emphasize your recent payment record, so if you've been late, start paying on time.
* Don't apply for too many loans or new accounts.
Requesting a lot of credit in a short time span may prompt lenders to be concerned that you won't manage your debt well.
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