Tuesday, June 10, 2014

Time to fix the Broken American financial system

Did you know that...

Traditional financial services are not working for most of the American population.  Money gives people options, and without options, it holds people back.  Many hardworking Americans do not have a bank account or do not have access to traditional financial services. They rely on cash and checks and tend to turn to alternative financial services, like check cashers, pawn shops, money order services and payday lenders, making them stuck in their financial situation because of the amount of fees it requires to use those alternative services.  

The good news is that while it is a large issue, it can be fixed.  There is new technology, new ideas, and affordable financial service products to help people who can't access the traditional services* so that consumers avoid those alternative services that rob hard workers through unnecessary fees.   

This issue is very important to me.  Many times on my blog I talk about money.  

I know that 89 billion dollars can go a long way making our world and our families happier if they didn't went into unnecessary fees of businesses that rob people instead of helping them.  

Watch this powerful documentary about this issue HERE

*opinions are my own and not of American Express

Monday, June 2, 2014

How to Wheel and Deal on A New Car Like a Lady

Dave's car got hit by a clueless driver.  Thankfully no one was hurt.  People aren't replaceable - but cars are.

Time to shop for another one!

We decided that we would replace the archaic 17 year old Honda Accord with over 200K+ miles with a brand new 2014 Honda Accord Sport fresh off the factory belt.

Yeah!  Our first new car ever for the both of us!!!!

When people (*ahem* men!) found out we were shopping for a new car

"Why are you wanting to buy a NEW car?"

"I would never pay to buy a new car.  You lose so much money, like $5K on depreciation"

I simply had to nod when I heard that, because they didn't understand how the business works when it comes to making money off cars, especially new ones.

How much markup is there on a new car?  Depending on the brand and model, very little, around 4-6% as a factory to dealer incentive when offered.  By selling the car at invoice price, the dealer is already getting about 4%.

How much markup is there on a used car that is 1-3 years old?  About 15-30% range.  I think that's a pretty significant difference.  Plus the manufacturer warranty is expiring by then, you have to determine the mileage and other stuff about the condition of the car - stuff I had no knowledge or time to learn more about.

The way I saw it, shopping for a new vehicle was easier, because the only thing I had to determine and deal with was the PRICE.

Before going shopping we looked up four things:

  • The MSRP of the car at the manufacturer's website - only suckers pay retail for anything! 
  • What other people in our area paid for the 2014 Honda Accord - about 12% lower from MSRP-this was something we couldn't pass up! 
  • The dealer invoice price - every Honda dealer pays the same price and all get the same incentives, rebates etc from the manufacturer
  • What dealers in our area were offering to sell the car.  We went to three dealerships.  

Doing this, we had a pretty good idea of how much we should really pay for a new Accord and asking the questions that mattered - everything tied to the price of the car.

For a lady, bringing your man isn't enough; you need your man AND a plan.  We talked and agreed about what we planned to do at each visit "We are not buying tonight.  We need to ask about X, Y and Z.  And most importantly we need to ask 'Can you beat our best price of $_____'"

The thought of car shopping and negotiating seems foreign and intimidating to most of the female population.  If you are apprehensive about talking to car salespeople, think this way:

This is YOUR money - not theirs.  You're the one in charge!  Don't agree to anything you did not ask for.  Simple as that.  All dealers want you to be their buyer and not their competitor's; if they can't offer what you want, you go to another dealer.  With new cars, they can't throw the "Someone else will buy it" because you can always order the car if it's not in stock.

We negotiated for a week bringing Baby in tow to all three dealerships.  She turned out to be really helpful, because when we didn't like a price that was offered, and wanted to leave, we said something to the extent of "Well it's getting close to her bedtime, we would like to talk more but we need to leave now"  The task of the car salespeople is trying to get you to buy TODAY.

We keep going back and forth from dealerships every night (minus Sunday) until two out of the three dealers couldn't beat our best price offered, "Go buy it from them."

Yes, it's possible for inexperienced car buyers to wheel and deal at a great price on a new car.  By great price, I am talking BELOW fair market value.  Even with the taxes and fees, we paid less than what the car could sell for in 5 years.

You don't need to bring me to your negotiations for a new car.  I know YOU CAN DO IT, not be fooled by anyone, and succeed.

Once you know what you want to buy, you
-Do your price research...this is a must.
-Ask questions about the price and the itemized quotes, out-the-door price.
-Keep it cool.  Don't be swayed by your emotions.  Listen to the salesman and pick out key words that he or she will say. "You said X, so are you willing to do this for Y?"
-Don't set an appointment.  Just walk in when you're ready to talk.
-Read stuff online about common car sales techniques, there is great information worth reading.  You will not be swayed by any type of car salesperson personality either.
-If you have awesome credit, financing the new car is better in the long run, especially if there is a killer interest rate.  (If financing through the dealership - they will try to trick you at the very last minute getting you on a higher interest rate, so keep an eagle eye out.  I knew we qualified for a 0.9% instead of the 2.7%, I told them to fix that upon my review before signing)

We felt so super with our new car purchase.  Even the head honcho of the dealership came up to us and said we beat him and didn't make any money on us (I'm sure he made some but not as much as he hoped)  The night before purchasing he even tried to be aggressive and get us to buy on the spot "Take it or leave it" but that didn't work along with his gruff stature and demeanor.  We just left and came back the next evening saying

"We will buy this car tonight but only if you take out X, Y, Z...and A!"

Before leaving, he asked

"What do you do for a living?"

"I'm an analyst"

"What do you analyze?"


"Aaah...I see.  Man you're good" and smiled.

Bye bye Dave's car.  Thanks for the happy memories.  

Hello gorgeous!  (Dave)
2014 Honda Accord Sport