5 Mistakes To Avoid When Buying A Car

Mvelopes Car BuyingApart from Mother’s Day, the month of May also marks many college graduations. It is a time that college graduates trade in their dorm rooms for apartments or mortgages, and ditch their skateboards and vespas to upgrade to a real ride. But for many, buying their first car can be daunting and if you’re unfamiliar with how the process works, you may end up paying the price – literally.

To help you navigate the ins and outs of car buying, our Mvelopes automotive and financial experts, have put together some of the deadliest sins of car buying.

Don’t: Focus on monthly payment.home-slide-coaching

By focusing on the final monthly payment of your auto loan, you’re ignoring the full cost of your future vehicle. Lenders will be happy to offer you 7 to 9-year loans to make sure you get the payment you want because they know you’ll be paying more in interest over time. Instead, focus your negotiation on the actual price of the vehicle and try to only take a 60-month loan at most.

Don’t: Take a trade-in value for less than your loan payoff.

This is one of the most common car buying sins due to longer loan terms and new-car depreciation. People find themselves underwater in a car they can’t afford, so they come back to the dealership to trade it in for a cheaper car. The problem? The dealership is going to offer them way less than what their loan payoff is, but will roll the difference into a loan on another car. Now, if they needed to quickly get out of this new loan for some reason, they’d be in even more trouble.

Don’t: Tell the dealer you are paying cash for a used car.

People always make the mistake of bragging that they can pay cash and they want a discount for doing so. The days of getting
a discount for paying cash are long gone! That happened years ago when dealers had to wait to get their money from the banks. Today, deals are financed without delay. After you reveal you are paying cash the dealer now knows they will not make money on the financing so they will keep the price high.

Don’t: Tell the dealer that your old car was totaled.

By revealing that your old car was totaled lets the dealer know that you are without a car and will need to obtain a vehicle quickly. Salespeople are less likely to barter if they know your need is high.

Don’t: Go car buying when the dealership is busy.

By waiting for non-peak times (like weekdays or when the weather is bad) you ensure that salespeople are dedicated to you and you alone. When there is a lot of foot traffic in the dealership, it is easy for a salesperson to pass on your deal with the hopes of closing someone else’s. Everyone wants to shop on a Saturday, but possibly saving $1,000 by shopping on a Tuesday may be worth it.

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The last few days of October are the absolute best times to buy a car from a dealership? Most dealers are cutting prices near the end of the year to make room on their lot for all of the new year’s models. Also, many salespeople have sales quotas. If they haven’t reached their quota by the end of the month, they are more more likely to give you a great deal!

Financial Lessons Only Mom’s Can Teach

Mvelopes MothersThere seems to be special powers bestowed upon mothers. When it comes to homemade grilled-cheese sandwiches, mom’s do it best. When it comes to supporting you in your goals and aspirations, mom’s do it best. But what about when it comes to teaching children about finances? For Sharon Suchoval, a mother and social-media marketer in St. Louis, the greatest lessons about finances and money were not taught in her Econ 101 class or a fancy webinar provided by the local credit union. No, when it came to teaching her children about finances, Sharon’s mom did it best.

“My mom got divorced when I was five. She had five kids and very little money. However, the lack of income didn’t reflect the abundance of financial life lessons I learned from my mother. These lessons have stuck with me my entire life and I now share them with you.

Women are strong.

Women should always be able to take care of themselves because you never know what circumstances life can bring. My mother taught me to be self-reliant and prepare for the future. I don’t need to lose my job or experience a life-changing illness to see the value of hard work and the value of a savings account, I learned it from my mother.

The value of an education.

My mother taught me that finances, or the lack thereof, should never be a reason not to go to college and get an education. My siblings and I spent weeks and hours filling out scholarship applications and grant forms. Where there is a will, there is a way. At the time I was growing up, a college degree really put you ahead of most applicants, today it’s simply an equalizer. I didn’t have a crystal ball to understand the growing educational demands of the job market, but it didn’t matter because I learned it from my mother.

Give and be generous to others.

One day, an organization knocked on our door and gave my mom a $100 bill because they were told that we needed it. My mother vowed on that day to pay it back, and she has – many times over. Even some of the greatest financial experts conclude that giving to others is a shared habit of the wealthiest people in the world. However, I didn’t need to learn it from experts, because I learned it from my mother.

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Be honest.

Money and honesty go hand in hand. My mother emphasized the importance to keep a promise, especially financial promises. She taught us about credit and how it influenced your financial reputation. Since that time, I have always paid my bills on time and even maintained a 700-800 credit score. I don’t need to see the news that is littered with stories of insider trading, money embezzlement, and collection companies to see that it is wrong – after all, I learned it from my mother.”

This Mother’s day, take some time to reflect on the lessons you learned from your mother and consider the sacrifices she made to teach you. Sharon’s lessons are unique, but there are thousands of lessons in which mom’s do it best.

Comment below and tell us how your mom taught you about finances!

About Sharon Suchoval: Sharon is a mother and social-media marketer, living in St. Louis. She grew up in Chicago, Illinois with her mother and siblings. She continues to document her own lessons to her children through her inspiring blog, Advice for My Daughter.