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Financial Fundamentals

3 Things to NEVER Say When Buying a Car (Reaction)

β€” Alexandra Ardelean

In this video, I'm going to react to a list of things to avoid saying when buying a car, based on a video from a father and son who work at a dealership. Let's see if I agree with their advice.

Reacting to Car Buying Advice

The video I'm reacting to is from a father and son who work at a dealership. They're sharing word tracks that salespeople use to guide customers towards closing deals. Let's see if I agree with their advice.

Company Philosophy

Before we get started, I want to share my company philosophy. My company is Ramsey, and we advocate for paying for cars in cash and only buying used cars until you reach Baby Step 4. We believe in the power of no debt, even with car purchases.

Word Tracks

The first word track is about monthly budget. The salesperson asks how much the customer wants to spend per month, and the correct response is to focus on the out-the-door price rather than monthly payments.

  • Salesperson: "What's your monthly budget?"

  • Customer: "I don't have one."

  • Salesperson: "Well, how much do you want to spend per month?"

  • Customer: "I don't know."

The second word track is about how much cash the customer plans to put down. The salesperson asks how much cash the customer has, and the correct response is to focus on the out-the-door number first.

  • Salesperson: "How much cash do you have?"

  • Customer: "I don't know."

  • Salesperson: "Well, how much are you planning on putting down?"

The third word track is about trading in a car. The salesperson asks if the customer has a trade-in, and the correct response is to separate the transactions and focus on the out-the-door price first.

  • Salesperson: "Do you have a trade-in?"

  • Customer: "I don't know."

  • Salesperson: "Well, what do you think it's worth?"

The video emphasizes that dealerships prefer customers who finance as it leads to more profit through interest and potentially higher car prices.

Personal Thoughts on Advice

I agree with most of the advice given in this video. It's important to know your budget and not be swayed by monthly payments or cash down offers. Using cash sets clear boundaries and prevents overspending on a car.

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Finance Manager Interaction

The video transitions to discussing interactions with finance managers at dealerships.

Finance Manager Questions

When finance managers ask about monthly payments or loan terms, it's important to be prepared with pre-approval from a credit union and understand where payments should fall.

Monthly Payment Considerations

  • Finance Manager: "What payment are you looking for?"

  • Customer: "I'm pre-approved at my credit union for 3% for 60 months, so I know my payment should be around $300."

Loan Term Considerations

  • Finance Manager: "How long do you want your loan term?"

  • Customer: "I'm pre-approved at my credit union for 3% for 60 months, so I know that's what I'm looking for."

The video advises asking for a breakdown of costs for additional products like extended warranties and considering that financing these products adds interest costs.

Cash Consciousness

Using cash makes buyers more conscious of their purchases and less likely to overspend on add-ons or extras.

Final Thoughts on Car Buying Advice

It's important to do your research and have an intentional plan when buying a car. You are in control of the process, so don't be afraid to ask questions and stand firm on your budget.

Disagreement with Financing Options

While I agree with most of the advice given in this video, I personally disagree with financing options for cars. Cars are depreciating assets, so it's best to save up and pay with cash.

Resource Offer: Ramsey Car Guide

For more information on smart car ownership and maintenance without debt, check out our car guide linked in the description below!

Conclusion

If you found this video helpful, please share it with others who may need help negotiating car purchases without debt. And remember, take control of your finances so you can create a life without debt!