The invoice VS market value

May 26, 2009

Clients will ask me, “How much over or under invoice should I pay for my car”?

I am not as concerned about the invoice as I am getting a price that is below the market value. When gas was near five dollars a gallon, the market value of a Toyota Prius was between 3-5 thousand dollars over the MSRP (Window Sticker). So, if I could get a client a deal at window sticker, or a little over, it was still saving my clients thousands of dollars. At the same time Jaguar had a program that gave the dealer 6,000 dollars in incentives to sell a car. I could buy their car for 5,500 dollars below invoice. So does the invoice price matter? It only matters as it relates to the more important market value.

“My salesman told me”…

May 21, 2009

Remember that a salesman’s job is to take as much money out of your pocket as possible. (Insert shameless plug for Ed Car Guy here) My job is to save you as much money as I can and get referrals for more deals. Clients will tell me that their salesman told them, “You can return the lease whenever you want” (Yes, and you will have to pay a bunch of money to get out of it early) or they will say that they will “include” a CD player or warrantee in the deal. “Including” does not necessarily mean free of charge. They just include it in to your payment. The key to any car deal is to keep everything separate. That way you know what you are getting and what you are not getting.

The point is to get it in writing. Anything that is verbal is not worth the paper it’s NOT written on… Smiles, I think you get what I mean


May 18, 2009

 I am often asked “should I get an extended warrantee”? (Now the politely correct term is mechanical repair coverage) The answer is yes and maybe. Here is what I mean. If you are going to finance the car, then yes, I suggest that you have a warrantee that is at least as long as the financing. Clients will only have a 3 years or 36 thousand mile warrantee on their car. They finance it for 60 months (5 Years) or even 72 months. (6 Years)  What happens after the warrantee expires? It’s in the later years of the loan that they ask me, as the car is breaking down “Can I trade my car in… even though it has issues?” Remember there is still a balance due on your loan and now it also is in needed of repair. At this point in your cars life together you probably owe more then its worth. This equity position is called being upside down.

   What do I mean by maybe? Well, It’s very important when getting a extended warrantee to find out what it does and does not cover. There are several different kinds of warrantees. Some only cover the power train. That covers the engine, transmission, and other parts of the drive train only, which is defined as the 29 parts of the vehicle through which oil flows. These are the parts least likely to fail. That’s why they are usually covered for a longer period of time. Other warrantees will cover your car bumper to bumper… BINGO! That’s the one you want.

 There is another factor to consider in getting an extended warrantee of course it’s the cost. The Credit Union has very affordable plans. Be careful of the after market companies that try to sell you one over the phone or e-mail.

 The bottom line is that if you take some time now you can save yourself headaches later.