Helping Clients Become Savvy Shoppers
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Transcript of Helping Clients Become Savvy Shoppers
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Helping Clients Become Savvy Shoppers
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Ronald Montoya,Consumer Advice Editor
• B.A. in Journalism from California State University, Northridge
• Worked at Edmunds.com since 2008
• Written over 70 advice articles and over 700 blog posts
• Bought and sold over 30 cars for Edmunds Long Term Fleet
• Worked at car dealership for five years
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Window Shopper to Savvy Shopper
• What can you afford?
• How much of a down
payment?
• Research car values
• Avoid becoming a monthly
payment shopper
• What is a fair deal?
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How Much Can You Afford?
• Edmunds recommends that the total of all vehicle expenses
stay within 20 percent of your take-home pay
• Expenses include insurance, monthly payment, fuel costs and
maintenance
• If you are buying used, stick to the bottom of your budget so
you’ll have money for repairs
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Know your credit score to see what rates you will qualify for
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Down Payment Trends
• Edmunds recommends 20 percent down payment for new cars
• A new car depreciates about 22 percent in the first year
• A low down payment instantly puts a buyer "upside down" in his car purchase
• A larger down payment helps you pay less interest on the vehicle and build equity
• Down payments are especially important for buyers with poor credit (680 FICO and below)
• The average used-car down payment was 11 percent; the recommended is 10 percent
California 17.76%
National Average 11.06%
Oklahoma 6.83%
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Monthly Payment Shopper• Don’t buy a car with blinders
on
• Monthly-payment shoppers don’t see the bigger picture — the purchase price of the car and some extras the salesman might slide into the deal.
• Avoid getting caught in the dealer’s four-square
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Assessing the value of a car
• Edmunds True Market Value
(TMV) is an effective tool, but
it is important to get the
correct details
• Prices can fluctuate based on
trim levels and options
• Have the dealer e-mail the
window sticker or invoice to
have the best match
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Edmunds.com True Market Value
• Edmunds TMV lets you know
what others are paying for the
car in your area
• This is a good reference point
for making an offer
• Makes you aware of the invoice
price
• Keep in mind that it is an
average, sometimes you’ll pay
less sometimes a bit more
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Used Car Values
• It is important to note the
correct options to get an
accurate price
• Useful for buying and selling
• Trade in prices are lower,
private party are better, but
you must sell the car
yourself
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What’s a fair deal?Buying
• Not always the lowest price
• Five year loan
• TMV or better
• 20 percent down
• Incentives
• Quality of service
Leasing
• Three year lease
• Little to no down
• Lease special
• Low fees
• High residual value
• Quality of service
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Final Tips
• Know what you can afford
• Research the value of your trade in and the new car
• Make a 20 percent down payment for new cars and 10
percent for used
• Don’t be a monthly payment shopper
• A fair deal is more than just the price of the car