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Location: San Jose, California, United States

He Bei, Inter-Mongolia, Beijing, Hamilton(Canada), Kingston(Canada), Ottawa(Canada), San Jose(US).....reach me @

Wednesday, July 27, 2005

Is this true or false

Monday, July 25, 2005

Buying car Tips - Insurance

To find the Cheapest car insurance as well as other insurance information , check with my other post.

For Canadian and British, check the bottom.

Normally save 10%.

Good luck.

Buying Car Tips- Finance

Finance a car is very important. If you can bargain $1000 off the MSRP, you can also give them back by finance the wrong way.

How much can you finance:
Your car’s OTD price should be equal or less than your annual gross income. Ex. If you are going to have a $30000 car, you better make at least $30,000 per year. Don’t forget you still need 20% down.

Example is an IS300 new. $30000 OTD. Purchasing interest is 3.9% for 60 payments.

You pay $30000 for the car and you drive it home. It is easy. You can also save money on insurance. I bet most people wont save money on insurance anyway.

My suggested down payment is 20% which is $6000. Most people who can pay cash are having good credit. The rest $24000 will be paid in 60 payments at $441. If you invest this $24000 wisely, you will have return at 5% (easy) comes $30801. Your total car payment in 5 years will be $264000. The difference is what you actually can save. This is very basic calculation. The rule is not to put all the cash into something that does not write off tax and does not have good future value.

$0 down is never to be a good option. You are financing the destination fee and tax which is have nothing to do with the car. When lender look at your loan structure, they more you put down more you will be able to get good deal. At some extreme conditions such as the car have high depreciation rate, your best move is to put less down but never to be $0.

To some economic cars, 10% is a good starting point, since it is a $15000 car lender will not be so excited about it.

If you just graduate from College or about to graduate in next 4 months, you can take advantage at a program for college graduates. You can receive up to $1000 cash towards down and lower interest. If you are in Army Services, there will be a program for you as well.

First time buyer:
There are lots of financial institute will finance a first time buyer especially a credit union. If you can show a good income and a good employment history, you can be financed. A big chunk of down payment will be very helpful. If you have an approval letter from a credit union for $24000 at 9.9% per year for 5 years. You are very likely to get same loan for 7.9% at dealer. Manufactory’s finance will normally beat banks for 2% to earn your business.

Debit to income ratio:
It is a number that bank will look at when you finance a car and house. It is your total monthly payment (credit cars, cars and mortgage or rent) / monthly earning before income tax. I prefer doing by monthly net income.

Your car is supposed to be ¼ and less of your monthly cash income to cover everything. Your mortgage supposes to be 1/3 of your gross income. This ratio is also a factor that decides your interest rate.

Home equity loan:
It is a loan that is against the equity of the house. It is the second loan right next to your house. It normally have a very low interest and very flexible to pay off like a credit card. You can extend the pay period as long as you can and pay interest only. The down side is if you can not make the payment, lender can take your house away. So my accounting suggested me that never do that. You don’t want to risk your house just because your car stuff.

Summery, most cars does not worth much money after 5 years. 7 years later your car will be history. So don’t put too much money on the car. Most people replace new cars in 3 year or before the car paid off. It is not a very wise idea.
From, writter:CarCrazier

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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