Posts Tagged ‘cars’

 By Andile “Ace” Magxaki

Buying a car.

1. Make sure you are getting the right vehicle.

This seems obvious, but you could wind up an unhappy car owner if you haven’t thought carefully about how many people and how much luggage or gear you need to carry.

2. Assess the worth of your old car.

Whether you plan to trade it in or sell it, your current car can be an important factor in your budget. Checking the right website and maybe your local newspaper will give you a realistic valuation. Selling it directly instead of just trading it may also mean a considerable difference in what you get for it, though it may take a while longer to reap the benefits.

3. Decide whether new or used is best for you.

Cars are built better now than in the past, so used cars make a lot of sense. However if you weigh up the odds of old versus new and the costs involved, you may well end up leaning towards a new car.

4. Consider whether leasing or buying makes more sense.

Leasing provides lower monthly payments than buying with an auto loan. But it’s not for everybody. If you don’t have money for a down payment or if you trade your car every two or three years, you may be a good candidate for a lease.

5. Do your homework and set your target price.

The Internet has made it easier than ever to find out the dealer’s cost for each vehicle and its options. That’s the first step to getting the best possible deal.

6. Shop for money before you shop for the car.

If you plan to buy with a loan, check your credit options or local bank quotes online to find the lowest rate. Getting a pre-approved loan will give you added confidence in negotiating a good price.

7. Negotiating a lease.

In the complicated world of leasing, the dealer will have the upper hand unless you learn how to be streetwise and how to negotiate the various segments of a lease deal.

8. Negotiate a purchase.

If you are doing it yourself, get quotes from several dealers, keeping the focus on the dealer’s initial price, which you will know from your research. You may be able to get quotes without going to showroom after showroom.

9. If you hate bargaining, consider using a car-shopping service.

Car-buying services, such as Web sites or discount clubs, make things easy with pretty good, no-haggle prices. But with most of them, you get quotations from only one dealer. Consumer services that shop several dealers near you may deliver even better prices.

10. Don’t let the deal-closer close out your savings.

The finance manager isn’t there just for the paperwork. He or she wants to sell you high-profit financial and mechanical add-ons. These are seldom worth the money.

 Creating a budget

1. Budgets are a necessary evil.

They’re the only practical way to get a grip on your spending – and to make sure your money is being used the way you want it to be used.

2. Creating a budget generally requires three steps.

– Identify how you’re spending money now.

– Evaluate your current spending and set goals that take into account your long-term financial objectives.

– Track your spending to make sure it stays within those guidelines.

3. Use software to save grief.

If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.

4. Don’t drive yourself crazy.

One disadvantage of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.

5. Watch out for cash leakage.

If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it’s time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.

6. Spending beyond your limits is dangerous.

But if you do, you’ve got plenty of company. Studies show that people within a certain income bracket spend more money than they bring in. This doesn’t make you an automatic candidate for bankruptcy – but it’s definitely a sign you need to make some serious spending cuts.

7. Beware of luxuries masquerading as necessities.

If your income doesn’t cover your costs, then some of your spending is probably for luxuries – even if you’ve been considering them to be filling a real need.

8. Create a type of tithing system.

Aim to spend no more than 90% of your income. That way, you’ll have the other 10% left to save for your big-picture scheme.

9. Don’t count on probables or hopefuls.

When projecting the amount of money you can live on, don’t include dollars that you can’t be sure you’ll receive, such as year-end bonuses, tax refunds or investment gains.

10. Beware of spending creep.

As your annual income climbs from raises, promotions and smart investing, don’t start spending for luxuries until you’re sure that you’re staying ahead of inflation. It’s better to use those income increases as an excuse to save more.