Your Money: A little car buying advice
Those who know me know I take great pride in saving money, and that is never more apparent than when the stakes are highest: car shopping! Of any purchase that we all make regularly throughout our lives, homes and cars definitely have the biggest impact on our bottom line. The good news is that when it comes to cars, the consumer has never been in a better position.What do I think the secret is to buying a car? Consumer Reports! For a small fee, you can purchase a “New Car Price Report” from http://www.consumerreports.com, and it contains a wealth of information about the MSRP, the price the dealer paid for the car, and the price they recommend you paying as a consumer. The report goes into great detail about every option possible for each vehicle, so you’re not just looking at the base model, but you know the value and the dealer’s cost of every option as well.I’ve brought this report to the dealership with me twice, and both times their bottom-line price was about $3,000 less than the dealer’s first offer. When I pulled out my printout from Consumer Reports, their price suddenly dropped by $3,000 and we had a deal! Sure, you can haggle more about trade-ins, interest rates and everything else, but if you want to know you’re getting a fair deal on the purchase price alone, you’ll know you are armed with some powerful information. Another big question is whether to lease or buy. Long story short, I normally recommend people purchase their cars outright. Sure, there is that original depreciation when you drive off the lot, but if you get a good enough deal, the price you paid should be low enough that you can turn around and sell your car at exactly what you paid for it. Buying is almost always the best strategy if you plan to keep the same car for a few years or more, or if you drive significant miles each year and would be facing an overage on miles. Let’s face it, if you live in Summit County, you tend to drive a lot of miles.Rather than explain my 101 reasons for purchasing a car, I’ll tell you the few times that leasing may work. Because the monthly payment for leasing is often cheaper than a full purchase, if you can lease a car far below your means and save the difference between your lease payment and what a car payment would be, you can end up with a substantial downpayment at the end of your lease that will help you purchase your next car. Leasing is also good if you insist on having the latest and greatest features every two to three years, regardless of the cost.Shopping for a new car can be a fun, fulfilling experience, especially if you go into it armed with solid information to help you save.Michele Knight, owner of Knight Accounting & Technology, is a CPA and QuickBooks ProAdvisor based in Dillon. For more info and to contact her, visit http://www.cpamichele.com.
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