Making a Major Purchase: Here Are Three Things to Consider
Know Before You Go
When buying my first automobile, a friend helped me and took me to the place where she purchased her car. Since I had never purchased anything major before, I did not shop around and stuck with that dealer. I was in a rush to get the car because I was tired of having to rent a vehicle when I needed one being that I no longer had mass transit at my doorstep. Lesson learned: start early, take your time so you do not make rushed decisions, and always shop around. Always read the fine print and all the printed material to catch something that may not have been discussed, but would have been helpful to know. Ask more questions than you think you should; you will be surprised at what you may learn.
Beware of Teaser Rates and Read the Fine Print
For the next car purchase, I had learned my lesson. Even though I did get stuck with the worst interest rate the first time around, I did not know I had other options either. Having done my personal finance homework since that first purchase, I got pre-approved before shopping around and was able to get a very low interest rate. I took my time shopping and looked at more than one location. I finally settled on two places and went with the location that offer the better final price. Now, the dealer did try to offer me their 0% option at the time, but when I looked at the new paperwork, the total car price had increased by $4,000. In my mind I said, “is he crazy?” When financing any item, you know you will have to pay interest; however, it is your job to pay as little as possible. So, I told the salesperson, “No thanks” and we moved on. Since I knew I was paying off my car earlier than the loan maturity date, why would I choose to pay the total amount of interest upfront in the cost? By paying the car off early, I was already reducing the amount of interest I was going to pay over the life of the loan. Taking their switch and bait offer would have cost me more in the long run. Beware of teaser rates and read the fine print.
Whatever is being offered, take your time and ask questions. I did ask the salesperson about the difference in price and whatever his reply was, still did not make sense for me to switch. Knowing what I was and was not willing to do and pay before I went, made this time around a better buying experience. I did learn to shop around, I knew what I wanted and how much I was willing to pay, and I read the fine print before signing anything. You do not have to make your final decision right there on the spot. You may need to go home and absorb and think about things even if the person puts a time limit on the offer. The same process goes for the other major purchase in our lives, a house. Most often you do have help with this purchase, a real estate agent, but you still need to understand exactly what you are getting into and not just focus on your feelings and emotions. Your name is on the title or deed, not anyone else’s. So, make sure you know before you go, read the fine print, and write your questions down so you do not forget anything. That one question not asked can change everything.
Written By: Michelle Alexander
AJM Financial, LLC