EP 24: How To Beat The Madness of Car Buying and Save Your Cash
Jan 17, 2024
George Dines
In this episode you’ll go through the car purchase experience and see the madness of dealerships, their ridiculous pricing, and the hidden add-on fees you might run into. Discover the auto auction specialist and save yourself time, stress, and a ton of money.
The car buying process has evolved over time and become a huge challenge. We'll go over what failing to meet a car payment means for you and talk about some of the questionable practices employed in the car market today, such as dealer markups on electric vehicles and mysterious add-on charges.
Whether you plan to buy a car or are just curious about the process, you should be prepared… so tune in!
Thank you for listening to The Millionaire Mindset Podcast with George Dines.
In this episode you’ll go through the car purchase experience and see the madness of dealerships, their ridiculous pricing, and the hidden add-on fees you might run into. Discover the auto auction specialist and save yourself time, stress, and a ton of money.
The car buying process has evolved over time and become a huge challenge. We'll go over what failing to meet a car payment means for you and talk about some of the questionable practices employed in the car market today, such as dealer markups on electric vehicles and mysterious add-on charges.
Whether you plan to buy a car or are just curious about the process, you should be prepared… so tune in!
Thank you for listening to The Millionaire Mindset Podcast with George Dines.
Welcome to the Common Sense Millionaire, where we work to promote your financial advancement in knowledge process and education so that you and your family become financially secure. This is the place I share Common Sense Action Steps that you can take today to assist your financial advancement. So sit back, grab a drink and let's get started. Common Sense Millionaire here, welcome back. So you want to buy a car At some point everybody says that I've even said that myself. Oh, I need to buy a car.
Speaker 1:
Well, I had that opportunity a couple of years ago and it's really a lot different than what's going on right now. Let me just tell you what happened for me. My car was stolen and was totally destroyed in a wreck by the thieves. It was very sad when I went to go pick up my documents and just saw everything was a shell. Okay, so I had to get another car, got the insurance payment and went shopping, and this time I decided I was going to do things a lot differently. I first started going to car dealerships and trying to talk with the folk at those dealerships and trying to negotiate, which was ridiculous. Pricing didn't make sense, options didn't make sense and there were all these add-on fees that didn't make any sense to me at all and it was confusing. So then a friend of mine was very nice to give me a phone number of someone who could handle all of the madness without me being involved, saved me a lot of time and, as we all know, time equals money. So I called the gentleman up and I told him well, you know, this is what I'm looking for. I need a blank, blank, blank. And he said okay, what color, what options? And I wrote all of that down, sent it to the gentleman. He says fine, let you know, I only buy used cars, I don't buy new cars. And current rule is the 410 rule no more than four years old, no more than 10,000. 10,000 miles a year. That typically covers leased automobiles, because people don't want to go over their lease allowance because that's going to cost them X amount of money per mile. So I'm looking for a lease car that is under warranty and has been taken care of, because the person who took out that lease does not want to be responsible for not taking care of the car.
Speaker 1:
So anyway, gentleman goes to the auto auction. Couple days later I have emails that have pictures of the vehicles that he was able to find. He could not find the car that was available for me. So he said look, I found these. They're similar in scope, take a look. Which one do you like? He gave me the mileage. One of them was under the 40k and had which was good for me under 40,000 miles. So I said OK, let's take a look at that.
Speaker 1:
The gentleman takes my choice, packs the car up, brings it over to his home. I drive out there, meet him at his home office and the car is there. I get a test drive and I said you know what? The car is perfect. He told me how much he paid for it at the auction, showed me the actual receipt. I paid him a fee on top, I believe. At the time I paid him $1,500 on top of what he actually paid for the car at the auction. That was his fee. He did tags, titles, license. That was it. No arguing with bogus salespeople or sales managers at the dealership. He got that for me. Everything is wrapped up. It's been wonderful. I still have that car. It's a fabulous car with no drama.
Speaker 1:
Now let's go look at today what the hell is going on in the car market. I have never seen such ridiculous stuff in my life. In particular, lots of new cars have dealer markups on them, especially if they're electric vehicles. They have dealer markups of like $5,000, $10,000, $15,000, which doesn't make sense, because when I go by to look at these places, the lots are full. They're full of cars. How can you be full of cars that no one's buying but you're marking them up? $5,000, $10,000, $15,000? It doesn't make sense.
Speaker 1:
There's other crazy things that are going on. If you're looking for a luxury car, especially the German ones, there was a feature I saw where the dealers are charging you a monthly fee for using the heat in the seats. You have to pay like $5.99 a month to be able to turn the heat on your seats. This is not, to me, an issue that the car manufacturers are crazy. This is an issue that the buyers are nuts for putting up with this kind of thing. I have never heard of any crap in my life. How do you have that kind of situation going on? Even with that, you still have to negotiate through the dealers financing in order to get the car out the door, and they're back to their old tricks of oh well, you're going to get this special paint that will keep your paint clean and clear of dirt or you've got, oh, we're going to put nitrogen in your tires. I saw that an ad for that one time where the dealer was charging $400 to put nitrogen in your tires because nitrogen is supposed to be better than just air.
Speaker 1:
What the hell is going on? On top of that, there are so many options in these cars that people are paying $1,200 or $1,200 a month in car payments. Does that make any logical sense? It's crazy. What's happening I'm seeing is that people are abandoning their cars because they can't make the payment, so they're turning it in. You're just saying, here, take this back, or they're letting the truck take it. And what happens there? Your credit is destroyed, okay, and you have a debt that you can't really pay back because either you don't have a job or your job doesn't support it. One of the theories out there is that a lot of people kept money over the COVID epidemic and because of that they weren't able to spend their money. So after COVID they went out and bought a really nice car to drive around, but now they've ruined their credit for the next seven years. What? I don't know what the heck is happening.
Speaker 1:
But if you have to buy a car, let's go through some of the things that you need to do. The first thing is don't go straight to the dealership. Go online, search your car out, find out what the options are, see what the detail of the pricing is. Okay, just get that straight. The second thing is after you've done that, figure out what stuff you don't want. You know that nitrogen and attire is a ripoff. You know that some special treatment for your paint is a ripoff. So go through what you don't want, take all those items out and then go back and compute what the price is Next. How much can you put down? I really do recommend that you try to put something down.
Speaker 1:
You don't want to 100% finance one of these cars at a ridiculous rate, especially right now. So now you're probably gonna be paying 78%. On the last car that I purchased, which I still have, I paid 1.74%. Okay, nobody's gonna see that right now. So figure out what the payment is going to be per month. Then figure out where you're gonna get the car financed.
Speaker 1:
There's a lot of choices. One is a regular bank. You could do the bank and see how that works out, and you could test a couple of banks, find out what their rates are and what their terms are going to be. Second, you can use the dealer's financing, but if you do that, those guys are sharks and they're about making money, not about giving you what you need. So how many times have I sat through one of those dealer meetings where they talk about oh, we've got this special shampoo for your seats or something like that that they're trying to sell as an add-on? Okay, so you could go to them and find out what they're offering and then compare that to what you're gonna find independently. Finally, I think the best shot is to find a very friendly credit union and join it. I think you will find that the rates for credit unions are a lot lower than dealer financing or bank rates, and that should be a good way to make sure that you've got all your bases covered in terms of how much money you have to put out of your pocket every month.
Speaker 1:
But I will say this it may be cheaper to get your car fixed. If that's the reason why you're shopping for a new vehicle At this point in time, then it is to buy a new car with an ungainly note. The other thing too. Let's be honest sometimes you let things go. You let repairs that should be done go and that creates problems in two ways. One, you can't drive the car and two, the resale value of the car will decline, with all of the drama that the company's fine with the car that you're trying to trade in. And just remember, if you are trying to trade in, you're not going to get what you think the car is worth. You can go online and look to see what the perceived value of that vehicle is, but you're not going to get that because the dealer is trying to make money. So those are just some of the things that you have to talk about.
Speaker 1:
The other thing is, and finally, do you really need the car that you're looking at?
Speaker 1:
Do you really need that?
Speaker 1:
Do you really need the flashy sports sedan made by one of the big companies in another country?
Speaker 1:
I'm not going to mention any of those countries Do you really need that?
Speaker 1:
Is that really necessary At this point?
Speaker 1:
That may not be a realistic approach to take on purchasing a car. Trust me, I've learned the hard way. I had my fun with cars and I'm done with it, and after some experience with dealers, I'm not going back to that. I've got somebody who's got me covered if I need to get another vehicle, and that's the way I'm moving, not buying a new car, because I'm not going to pay $5.99 a month so that I can have heated seats or air conditioned seats.
Speaker 1:
So all I have to say is, if you want to talk about this further, I'd be glad to get you in touch with the guy I work with, who can make the entire buying experience much less troublesome for you, and I think for most people it works out a lot better. So just let me know, give me, an email to me, that'll be fine. We'll get you going in the right direction. You've been listening to the Common Sense Millionaire, where you can learn how to go from zero to a million using Common Sense solutions to everyday financial issues. Make sure and subscribe to stay connected for more content, tools and help so you can advance towards your financial goals. If you need assistance or have questions, leave a comment or you can email me at george at commonsensemillionairecom.