June 27, 2012

1. Don’t trade in your car

It is a known fact that the dealership is only interested in making money off of you.  So when you decide to succumb to the convenience of trading in your car, know that you will get a lot less than if you had sold it.

2. They will try to up-sell you

The dealer will offer many deluxe options for your new (or leased) car, don’t fall for it! Especially if it is a leased car–you will be customizing their car that must be returned at the end of the contract, and with no refund for the customizations. If you want something added to the car, shop around for the best deal.

3. Get the proper insurance

.Worst case scenario: you get in a car accident directly after driving off the dealership lot.   You paid $35,000 for the car but as soon as you drove away its worth depreciated to $20,000.  The insurance company will only pay you what it’s worth, but you still owe the total of $35,000.  For scenarios like these, there is Guaranteed Auto Protection or GAP insurance.  This means the difference will be covered and you won’t be stuck with a $15,000 bill and no car.

4. Buy a car that makes sense

. Many people shopping for a car look for something they like now, but to get the most out of a car you must see yourself being able to drive it for the next 10 years.  Think of the repairs it will need and whether it will be worth buying the extended warranty. Whatever car you decide on, make sure it will fit your needs for years to come.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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