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Location: San Jose, California, United States

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Monday, July 25, 2005

Buying Car Tips- Lease

This is the summary of my car buy TIPs. These information was reposted together to help people who want to buy a new car from beginning. Some information can be also helpful when you want to have a used car as well.

Chapter One: Research

Research your financial ability to afford a car. Including credit, cash and finance cost. I also like to include insurance into the budget since it is almost a fixed cost.

Research the car or SUV you would like to get based on how you want to use it and your affordability.

Get a loan calculator that will help you figure out dealer’s finance tricks. Dealer will think you are serious and not want to mess with you.

Chapter Two: Sales & Sales manager & Dealer

Dealer is a location where you can acquire your car. More cars one the lot will cost dealer money for insurance, bank interests, maintenance and other invisible costs. So you are doing them a favor. Dealer make money on car’s price, Service (major), used car (2nd Major) and commission for your loan. Dealer will not sale a car because they want to loss money. You can not beat that.

Sales are the bottom of the food chain. They rely on your business. Sales can make little money $100 or little more to sale a new car or $500 or more to sale a used car. Their commission can be increased because internal bonus (weekend, month end, season end annual end, quantity.) If a sales person can sale X amount cars per week, he will receive a bonus. Sales get more bonuses on cars that sale at extremely high price. Special marked cars (normally stay on lot more than 4 weeks.). The best time for you to buy a car is end of week, month or year. Sales can not offer you a price without asking for sales manager.

Sales manager is the boss behind sales person. They can make deal give you free stuff. He has extensive sales experience and makes money on quantity not on individual deals. He is the person you want to watch out for.

Chapter Three: Psychological Games

1. Test Drive. The test drive is to create a invisible emotion relationship between the car and you. Most buyers can not find problems just by a 5-10 mins test drive.

2. Pick Sales. You don’t have to make deal with a sales walked to your car. Pick a sales person yourself. Stay away from Asian, Female or elderly sales person. Best bet is walk to a young white sales person who looks nervous. He will work for you.

3. Be polite. Polite people always welcome. Buy sales manager and sales person a soda can put them into a very strange position. If you drank a soda which pay by the sales person, can you just walk away from him?

4. Walk Away. This is the best weapon. When I say walk away, you have to stand up from a chair and walking towards the door. Don’t let sales stop you unless you have a taste of a fresh air from the lot. Don’t even hesitate to leave the dealer. They will call you back in 3 days most time. If not, then find another dealership and make your offer more realistic.

Chapter Four: Loan

You want to have 20% total price down to get a loan with good rate. (Assume your credit score is over 650.)
The best way is to get a approval letter from a local bank which you opened account for last 3 years. You make dealer to beat that deal.
Best length for the loan is easy finance 60 payments with no prepayment penalty. If you have good credit the best way is to purchase the car vs. lease.

Chapter Five Lease

Lease is for people who is first time buyer or just need a car for 3 years. If you get good credit your lease interests will be higher than purchasing interests. Disadvantage about lease is that you can only run certain miles on the car in the lease period and you can not have major scratch on the car either.
If you a first time buyer and have to enter a car you don’t like much, pick a short term lease.

Here is one of the link Short term leases - no money down! can compare the lease.

Thank you for reading these. I will post something about finance later.

From, writter:CarCrazier


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2:41 AM  
Anonymous Anonymous said...

Should I get a copy of my credit report before I look for a car? I thought there were places that would give you a car loan no matter what your credit score was like this place - Refinance Car Loan

4:29 PM  
Anonymous Antique Cars said...

Hi ,some great stuff here.Im an avid car lover and came across a site about Antique Cars# that I thought was worth sharing as they have some really fantastic resources,considering how old these things are now I really struggle to get good information so if you enjoy the vehicles of the past go like I do then take a look.

10:19 AM  

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