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Transcript

S3|E21: August Newsletter Recap · Life. Money. You.® Podcast

• 0:12
  SPEAKER_00: Hello everyone and welcome back to another episode of the Life Money You Podcast.
• 0:18
  SPEAKER_00: I'm Danny Bushik, program manager and your podcast host.
• 0:22
  SPEAKER_00: And today, we're talking about something that can have a major impact on your finances for years to come: buying or refinancing a vehicle.
• 0:30
  SPEAKER_00: For many of us, a car is the second largest purchase we'll ever make after a home.
• 0:35
  SPEAKER_00: Yet, it's surprisingly easy to focus on the excitement of finding the right vehicle and overlook some of the financial decisions that can cost thousands of dollars over time.
• 0:46
  SPEAKER_00: The good news?
• 0:47
  SPEAKER_00: A little preparation goes a long way.
• 0:50
  SPEAKER_00: Today, I'll walk you through three smart moves that can help you make a confident car buying or refinancing decision while keeping more money in your pocket.
• 1:00
  SPEAKER_00: So let's get into it.
• 1:02
  SPEAKER_00: Move number one, know what you can actually afford.
• 1:06
  SPEAKER_00: Not what car do I want, but what can I actually afford?
• 1:11
  SPEAKER_00: It's easy to fall into the trap of shopping based on a monthly payment alone.
• 1:16
  SPEAKER_00: Dealers know that extending a loan term can make a payment look more attractive, but lower monthly payments don't necessarily mean you're getting a better deal.
• 1:26
  SPEAKER_00: In fact, longer loan terms often mean paying significantly more interest over the life of the loan.
• 1:34
  SPEAKER_00: When building your budget, remember that the car payment is only one piece of the puzzle.
• 1:39
  SPEAKER_00: You'll also need to account for insurance, fuel, maintenance and repairs, parking or tolls, and registration and licensing fees.
• 1:50
  SPEAKER_00: One of the biggest mistakes people make is assuming they can afford the payment without considering the total cost of ownership.
• 1:58
  SPEAKER_00: My recommendation: start with your budget first and use an auto loan calculator to see how different loan amounts, terms, and interest rates affect your monthly payment.
• 2:10
  SPEAKER_00: I'll leave ours in the show notes for you.
• 2:13
  SPEAKER_00: The goal isn't to buy the most car you qualify for, it's to buy the right car for your financial situation.
• 2:19
  SPEAKER_00: Moving on to move number two.
• 2:24
  SPEAKER_00: Walking into a dealership without understanding your financing options is a little like showing up to negotiate a salary without knowing the market rate.
• 2:33
  SPEAKER_00: You're automatically operating from a weaker position.
• 2:37
  SPEAKER_00: So before applying for a loan, take a little time to prepare.
• 2:41
  SPEAKER_00: Review your credit report, pay down credit card balances if possible, compare financing options, and consider getting pre-approved.
• 2:51
  SPEAKER_00: Pre-approval is one of those small steps that can make a huge difference.
• 2:56
  SPEAKER_00: When you know exactly how much you're approved for and what interest rate you're eligible to receive, you gain confidence and control over the buying process.
• 3:06
  SPEAKER_00: And here's something many people don't realize a dealership's advertised low interest rate offer isn't always the cheapest option.
• 3:15
  SPEAKER_00: Sometimes, those special financing deals require you to give up manufacturer rebates or cash incentives.
• 3:24
  SPEAKER_00: In certain situations, accepting a slightly higher interest rate while taking advantage of available rebates can actually save you more money overall.
• 3:33
  SPEAKER_00: That's why it's so important to compare all your financing options before deciding.
• 3:39
  SPEAKER_00: The takeaway here is simple.
• 3:41
  SPEAKER_00: Know your numbers before you start shopping.
• 3:44
  SPEAKER_00: And lastly, move number three, do your homework and negotiate confidently.
• 3:50
  SPEAKER_00: The more information you have before stepping into the dealership, the stronger your negotiating position becomes.
• 3:56
  SPEAKER_00: So start by researching vehicle values, reliability ratings, and reviews.
• 4:02
  SPEAKER_00: Compare prices at multiple dealerships, and get a sense of what people are actually paying for the vehicle you're considering.
• 4:09
  SPEAKER_00: If purchasing a used vehicle, don't skip the basics.
• 4:13
  SPEAKER_00: Test drive it, review the vehicle history report, and have it inspected by a trusted mechanic.
• 4:21
  SPEAKER_00: A few hundred dollars spent on an inspection can potentially save thousands in unexpected repairs later.
• 4:28
  SPEAKER_00: And if you're trading in your current vehicle, compare the dealership's trade-in offer with what you could receive through a private sale.
• 4:34
  SPEAKER_00: A private sale often results in more money, sure, while a trade-in offers convenience.
• 4:40
  SPEAKER_00: Neither approach is right or wrong.
• 4:42
  SPEAKER_00: It's simply about understanding the trade-offs.
• 4:44
  SPEAKER_00: One negotiation tip I always like to emphasize is keep each component of the transaction separate.
• 4:52
  SPEAKER_00: Negotiate the vehicle price, your trade-in value, financing, and add-ons and warranties all individually whenever possible.
• 5:03
  SPEAKER_00: When everything gets bundled together, it becomes harder to understand what you're actually paying for.
• 5:09
  SPEAKER_00: And finally, remember this be willing to walk away.
• 5:13
  SPEAKER_00: That may be the most powerful negotiating tool you have.
• 5:17
  SPEAKER_00: If the numbers don't make sense, trust yourself enough to take a step back.
• 5:21
  SPEAKER_00: There will always be another vehicle and another opportunity.
• 5:25
  SPEAKER_00: Let's quickly recap today's three moves.
• 5:29
  SPEAKER_00: First, know what you can actually afford by focusing on your total transportation costs, matches the monthly payment.
• 5:36
  SPEAKER_00: Second, prepare your financing ahead of time by reviewing your credit, comparing options, and considering pre-approval.
• 5:44
  SPEAKER_00: And third, do your homework and negotiate confidently by researching vehicle values, separating each part of the deal, and being willing to walk away if necessary.
• 5:54
  SPEAKER_00: A vehicle can be an incredibly useful tool, but it shouldn't create unnecessary financial stress.
• 6:00
  SPEAKER_00: The most prepared you are before you buy or refinance, the more likely you are to make a decision you'll feel good about for years to come.
• 6:08
  SPEAKER_00: Thanks for spending a few minutes with me today.
• 6:10
  SPEAKER_00: For additional resources on car buying or refinancing, visit our website at lifemoneyu.com and check out our virtual library.
• 6:19
  SPEAKER_00: Until next time, remember, life happens, money matters, and we're here for you.
• 6:25
  SPEAKER_00: As a reminder, Life Money U is a financial well-being program owned by BCU, a credit union fiercely committed to your financial well-being.
• 6:33
  SPEAKER_00: Through LifeMoneyU subscription, you get credit union membership eligibility and access to a boatload of money-saving products and tools, one of which is free financial coaching.
• 6:43
  SPEAKER_00: So you can meet with a financial coach on your time to talk through boosting credit, crushing debt, or building an emergency savings fund.
• 6:50
  SPEAKER_00: We hope to have you on the next one.
• 6:51
  SPEAKER_00: Thank you all for joining.