Fix your credit pointer #3

Credit History is important!

Basically, the longer the better.

A long history paid on time will be a strong foundation for a good score.

Do not close credit accounts with a long history. If you have a card that has been open since 1992, GREAT! Keep it, even if you don’t use it or just use it periodically. If you do not like the terms of that card call and see if you can change the terms rather than cancel the card. Make sure the account number does not change! This is very important. (A few years ago Citi Bank aggressively tried to change as many of their card holders from Visa to Mastercard because it was less expensive for them. This changes your account number and starts your history over again. This negatively affected peoples credit. Don’t do this!)

Hybrid values plummet

It is all about supply and demand. I find it amazing how often we as a nation forget that. If we would just look back at history we would see it glaring at us. Gas prices have dropped. We stopped consuming at such a high rate and started figuring out ways to save. Suddenly the demand has dropped so much that the price of gas has fallen from $4.00 a gallon to in some places $1.50. All of that screaming about windfall profits was a joke. The profits were not the problem, supply and demand was. Now that America has cut back on our fuel consumption we see gas drop and at a record rate.

This brings me to my point of this post, the hybrid. For those of you who paid crazy dollars for hybrids when gas went up don’t look now. In fact ignorance may be bliss and not reading the remainder of this post may help you. It can be very depressing. I have access to Manheim auctions. This is the largest Auto Auction chain in America. They have at least one auction in every major city in the US. Three to four months ago I watched the Toyota Prius Hybrid bringing more at auction for used vehicles than the invoice was on a new vehicle. 2008 models were selling for $28,000 at the auction simply because people would pay more for a barely used Prius to get it now rather than wait for six months to get the new one they ordered. A Prius identically equipped just four months later sold for $10,000 less. $18,000 was the consistent price for that vehicle. This means that if you gave $30,000 plus to a dealer for that over priced Prius it has dropped in value $12,000 in just four months all because of supply and demand. Trade value is now $18,000. I feel for you if you were suckered into over-paying for your hybrid, however, you can learn from this. Don’t buy with emotion. Buy smart. Be willing to wait for the best deal. You will never make up the $10,000 you wasted in fuel economy. So learn from it. If you do it won’t be wasted.

Fix your credit pointer #1

Pay down all credit cards to less 30% of your credit line.

A balance over yor credit line will devistate your score. Having a few credit cards with a zero or near zero balance really helps your score. The ideal would be three cards with zero balances and a two year plus history.

Fix your credit pointer #2

Pay your bills on Time!

I know, wow that was a wealth of information. Of course we all know this but what we don’t know is the importance of it when we look at the details.

The last six months is the most important payment history. Create a six month history of perfection with your payments and you will see an increase in your score. If you made a house or car payment that was more than thirty days late three months ago, wait three more months before you buy and it will help you.

Each payment will weigh differently on your score as well. House payments are huge. The easy way to remember is the higher the payment the more it will affect your score.

My Top Ten Mid Size Sedans to get you the best bang for the buck

This segment rates all midsize sedans in total cost of ownership.

1.Honda Accord- There is not much to say other than, what a great car. Appearance, quality, fuel economy, etc. it is all here. I tip my hat to Honda, this vehicle is clearly the King of its’ class!

2.Toyota Camry- Always a great car, the most recent redesign was great. Overall an absolute top pick. The Accord just has too much this time around.

3.Chevy Malibu- This is the sleeper of the bunch. Fuel economy is not the best but it is near the top. Style is great. Comfort is above average and JD Power gave it the highest rating in initial Quality. The only big negative is resale value, traditionally poor but that could change with everything GM has done to improve this vehicle. If it does, look out Toyota and Honda, you might actually have a real competitor!

4.Nissan Altima- Price is the best selling point for this car. It is above average with everything. It will cost you a couple of grand less than a Camry or Accord. That really helps. Not a bad choice by any means, it does, however, feel like a couple grand less car when I drive it.
5.Buick Lacrosse- The highest marks in quality and comfort are the selling points for this vehicle. Poor marks in fuel economy and resale value hurt it. It is a vehicle that generally sells to the older crowd and GM is very aware of that. It is evident in the appearance and basic user friendly controls.

6.Volkswagen Passat- Excellent in resale and initial quality. Very trendy. One of the more expensive cars in initial price in this segment. Fuel economy is below average.

7.Subaru Legacy- If you do not get the all-wheel drive version it really isn’t worth it. They are known for their all-wheel drive and trendy personality which drives most of their customer base to come back time and time again. Financially speaking it would be hard to consider this car over a handful of others in its class.

8.Ford Fusion- Have you seen those commercials where someone test drives a Fusion and then tells you they like it better than the Accord and Camry. Well, I am not saying that they are lying but Ford must have found the handful of people that actually believe that. The initial cost is low but the resale will be poor. In the end it will cost you more to own one of these than it will to own a handful of other cars. There is nothing about this car that justifies doing that. If you buy one, lease it and wait for one of those notorious Ford give away leases.
9.Hyundai Sonata- This vehicle is improving every time they redesign it but it still has a bit to go.

10.Mitsubishi Galant- below the big guys across the board. The Galant does not excel in anything. It just seems blah when you drive it. Horrible resale value has been a problem. If you buy this car you need to be willing to push for the best deal possible. Even then, I am not sure if it is worth it.

I want more car; The Prius is too small, what then?

                Gas prices are high and that is important to you but not enough to sacrifice a comfortable ride.  You want more size to your car but still want the best deal. Great, let’s look at the midsize sedans and see which ones the best bang for the buck. Again, what car will give you the lowest cost of ownership with an added size comfort? There are a few factors we must consider. There is the initial cost. Fuel economy is huge right now, but not everything and it may change. Resale value will be a big deal and you can’t afford to overlook that in this segment. Reliability will be an issue and this segment you can add comfort, enjoyment and style.

·          Initial cost – What will it cost you every month? You may even pay cash for it. Either way this is an obvious factor that almost everybody considers. Just remember there are other factors. If car A is $2,000 less than car B that does not always make it the best deal. If you lose that $2,000 and then some in fuel economy or resale value wouldn’t it have been better to pay a little more up front for overall savings. I say yes, especially when some of these cars can swing another $5,000 to $10,000 when you add up the other factors.

 

·         Fuel economy – This one is huge right now and it sounds like it may be here to stay and may even get worse. This is just one part of the equation.  Purchases should not be made on fuel economy alone. What you need to realize is the less mileage you drive the less weight this should have on your decision. The more you drive the larger factor this becomes. The more you spend at the pump the more this will affect you. However, the more you save on fuel economy by driving many miles it will adversely affect resale value. Please understand that this is just a factor. Fuel economy is just one part.

 

·          Resale value- This is the most important part that always seems to be overlooked. The majority of the people I have spoken with never consider this. It is hard to know what the market will do in three or five years from now but most cars are pretty consistent with resale value. Generally the more reliable or rare the car is the better they are at resale. Which is why the Japanese makes, especially Toyota and Honda do so well. They have a reputation of reliability. Sports cars tend to do well also simply because there are substantially less of them.  Right now the number one car in resale is the Honda Accord. The improvements in style, coupled with reliability, have made it a stand out. Resale value can be affected by you, the driver, as well. Did you keep it well maintained and can you prove it with records? Did you put a ton of miles on the car? What kind of miles, highway or stop and go traffic? Did you wash it and wax it regularly? The better looking the car is the more you will get out of it in the end.

 

·         Reliability- This is a big issue many people overlook as well. You can avoid costly repairs by just owning the vehicle while it is under the factory warranty but the reliability will affect you when you go to sell or trade it. People will give less money for a dime a dozen poorly built vehicle even if you took great care of it. Buying reliability in the beginning is always a plus. Just make sure you get your money back in the end.

 

·         Comfort and Style- This is obviously a personal decision all though if the masses agree that one particular car is unattractive you may want to steer clear. You don’t want to lose your shorts down the road when it is time to trade or sell it. With that being said; make sure you like the car. There is a reason you are not buying a cheaper car and if you are going to spend the money make sure you like it. After all every month it is you who writes out that check and sends it into the bank. It is a lot easier to send it when you like it! So go sit and test drive everything before you decide.

 

 

Now let’s discuss this class of car in detail. First of all there are hybrids in this class. There is the Toyota Camry Hybrid, Honda Accord Hybrid, Nissan Altima Hybrid and Chevy Malibu Hybrid to name a few. Of course all of these makes are available in the non hybrid version as well. The two best as far as fuel economy is concerned are the Camry and Altima. However neither improve highway driving more than 3 miles per gallon. They do offer 8 miles per gallon improvements in city driving but that still will not make up for the added cost to purchase the hybrid version. In my opinion, stay away from the hybrids, the safer bet is there.

           

With that being said the Honda Accord looks pretty good in this segment. The exterior appearance looks so much like a BMW it should be grounds for a lawsuit. It will get you a very impressive 31 mpg on the highway, just 3 miles less than the Camry Hybrid. It has all that style and a little performance to boot. The Camry Se looks very impressive as well, call it a distant second. It should be noted that Chevy broke out of their, ugliest cars in the world, slump and made a very attractive Malibu. They do have a ways to go however, resale will still be subpar compared to Accord and Camry as well as many other areas that they fall short in but at least this time it appears they have tried and closed the gap considerably.

 

I give the nod to the Buick LaCrosse for comfort. The reliability is superb as well. The poor resale and fuel economy however really hurt it overall. The Toyota Camry isn’t bad either. It has always been pretty good at this. My guess is being a near relative to Lexus never hurts.

I hope that helps!

Lotus Elise

A List of my top ten “Best bang for your Buck cars!

Remember this list is based on sheer cost of ownership, nothing else!

1. Toyota Prius (Right now if you were to buy this vehicle and pay sticker for it, chances are you could drive it for a year and sell it for what you paid for it as long as Toyota’s production is still below the demand.)

2. Toyota Yaris (This is the safest bet. If the Prius production increases to where you do not have to wait to get one this could slip to number one.)

3. Honda Fit (Kind of ugly to some but a great bang for the buck.)

4. Toyota Corolla (This may be the most reasonable purchase out there. It is spacious for its class, affordable and will fit almost everything for most people.)

5. Honda Civic (Similar to the Corolla, the Corolla just out does it slightly in a few areas)

6. Scion xD (Trendy, cool, hip, whatever you want to call it, I call it a great deal!)

7. Nissan Versa (It definitely makes the list but it seems like Nissan can never out-do Honda and Toyota. This is no exception)

8. Hyundai Accent (Typically this vehicle has lousy resale but with gas prices the way they are that should change. If gas prices were to drop this vehicle may lose value again, dropping this from the list.)

9. Kia Rio (Typically this vehicle has lousy resale but with gas prices the way they are that should change. If gas prices were to drop this vehicle may lose value again, dropping this from the list.)

10. Mini Cooper (I know this is a surprise but with the strong resale value and substantially better fuel economy than most cars, the cost of owning one of these trendy guys is surprisingly low.)

 

 

 

 

 

What is the best car for the buck?

 

Should you pay for a more expensive hybrid? If you have decided that all that matters in a vehicle for you is sheer economics than this question is for you. This question can be answered by simple math or difficult math depending on how you look at it.  What car will give you the lowest cost of ownership is the real question. There are a few factors we must consider. There is the initial cost. Fuel economy is huge right now, but not everything and it may change. Resale value will be a big deal as well but is often overlooked. Reliability will be an issue as well.

 

·         Initial cost – What will it cost you every month? Make sure you can afford the paying the monthly payment. It may save you in gas but if it $100 higher each month in payment it may be too high for your budget.

 

·         Fuel economy – This one is huge right now and it sounds like it may be here to stay and may even get worse. This is just one part of the equation.  Purchases should not be made on fuel economy alone. What you need to realize is the less mileage you drive the less weight this should have on your decision. The more you drive the larger factor this becomes. The more you spend at the pump the more this will affect you. Please understand that this is just a factor. Fuel economy is just one part.

 

·         Resale value- This is the most important part that always seems to be overlooked. The majority of the people I have spoken with never consider this. It is hard to know what the market will do in three or five years from now but most cars are pretty consistent with resale value. Generally the more reliable or rare the car is the better they are at resale. Which is why the Japanese makes, especially Toyota and Honda do so well. They have a reputation of reliability. Sports cars tend to do well also simply because there are substantially less of them.  Resale value can be affected by you, the driver as well. Did you keep it well maintained and can you prove it with records? Did you put a ton of miles on the car? Did you wash it and wax it regularly? The better looking that car is the more you will get out of it in the end.

 

·         Reliability- This is a big issue many people overlook as well. You can avoid costly repairs by just owning the vehicle while it is under the factory warranty but the reliability will affect you when you go to sell or trade it. People will give less money for a dime a dozen poorly built vehicle even if you took great care of it. Buying reliability in the beginning is always a plus. Just make sure you get your money back in the end.

 

Now that we have discussed these factors let’s apply them to a few scenarios. The number one selling hybrid out there is clearly the Toyota Prius. It will run you anywhere from $24,000 to $28,000 on the sticker. From my research it will take three to six months to get the car and many dealers want more than sticker for them. The cars are decent sized but I find it difficult to see much more car there than what a Toyota Corolla offers. You’re looking at an $8,000 difference. Will this Hybrid save you more than $8,000 in the next few years in fuel economy? Maybe, maybe not, the way to know for sure is to calculate the mileage you drive each week, month or year and divide that by the miles per gallon each vehicle gets and then multiply by the average cost for a gallon of gas. Once you have the calculation then multiply that by how long you plan on keeping the car. This is just the fuel economy factor. Be sure to look at resale value as well.

 

The Prius right now has an unprecedented resale value. There are many dealers asking more for used current year to 1 year old low mile Priuses. Which means the resale value should be very strong. This can change as soon as gas prices drop however that does not look like it will happen anytime soon. Based on what we have discussed if you drive average miles or less, it is safe to say a hybrid Prius is a good buy. The other vehicles that come in a hybrid and regularly aspirated engines are not near as good of a buy. I have yet to see one improve the fuel economy enough to make up for the cost. These types of vehicles are the Ford Escape Hybrid vs. the Ford Escape, the Toyota Camry Hybrid vs. the Toyota Camry, the Honda Civic Hybrid vs. the Honda Civic, the Chevrolet Tahoe Hybrid vs. the Chevrolet Tahoe, etc. Most of these vehicles do very little to no better on the highway.  Unless you are doing a majority of city driving you will not benefit enough to justify the extra cost.

 

                If you happen to drive a large amount miles per year, say 25,000 or more, a hybrid is probably a bad to horrible idea. The reason being, that you will destroy the resale value by having a vehicle with no warranty and a high potential for a very expensive repair. High mileage driving will remove the strong resale value as well. If you are in that situation and you want the best bang for your buck, nothing is better than a three year old Toyota Corolla or Honda Civic. Drive it for three or four years and then replace it with another. This will minimize the loss and give you the best value for your buck.

 

I hope that helps!

Gas prices are through the roof so what car is really the best bang for the buck?

With gas prices well over $4.00 a gallon everything thing is going up. Have you been to the grocery store lately? Milk and gas are about the same price. Everything has gone up. It takes more to get those items to the shelf so in turn the price goes up. Fuel cost rising will hit you every time you turn around. Everything seems to be just a little bit more expensive and it really adds up. This is why not making a mistake in purchasing a vehicle is so important. Of course this raises numerous questions; should you pay more for a hybrid? Is that really the best way to spend your money? If you don’t want a tiny hybrid, you want a more sizable car then what is the best deal? You are not willing to forgo performance, what then? You have a large family and need more room are you forced to buy a large vehicle with poor fuel economy? Well let’s look into the facts.

Aston Martin DB7

 

Here are a list of Auto lenders that may help you get a loan.

Here are a list of Auto lenders that may help you get a loan.

 

HSBC.com

LendingTree.com

Capitaloneautofinance.com

DCU.com (Digital Credit Union)

eBay finance

RoadLoans.com

Be aware of scam listings, emails and second chance offers.

Be aware of scam listings, emails and second chance offers.

·         EBay is very good at removing illegal listings but they cannot police every listing. There are ways you can save yourself.

·         Use Windows explorer 7.0 and Outlook 2007. They will alert you when you are on a website that looks like eBay but is not. They can tell you when you have an email that is trying to scam you as well.

·         Absolutely do not buy a car without talking to the seller on the phone first! Many scammers will refuse to do that because they are located overseas.

·         Verify the dealer ID with the state highway patrol.

·         If they want you to place money in an escrow account make sure it really is an escrow account. They will often do this through big company names such as FedEx or a large bank. Many of these are simply wire transfer accounts and they don’t even offer escrow.

·         When wiring money make sure it is a US bank and the account name is the name of the dealer.

·         Numerous listings that are not legitimate will require you to contact the seller before you are able to bid. Be leery of those items. That is a valid listing type by ebay but is usually utilized in very high dollar items only.

·         Numerous listings will look good but they are just copies of someone else’s previous listing. They will make just a few small changes.

·         Many scammers have poor English and will misspell many words.  Sometimes their sentences will not flow or make sense.

·         When in doubt, walk away; if it looks too good to be true, it just may be.

·         If you are offered a second chance offer via email, make sure it is in your “My ebay Message box”.  That is an easy way to verify whether or not it is legitimate.

At what price should you start your negotiation?

My suggestion would be to use Edmunds.com used car values for a place to start negotiations.  I would start by using “trade value” and try to end up somewhere between “private party value”. If the vehicle is very rare and nice you may consider going higher than “private party value”. This should be more of an exception to the rule rather than a common practice.

Always Test drive and then leave.

Determine what vehicle you want by test driving everything you might be interested in. Try to do all of the test drives in one day. Once you have determined what you want, GO HOME!

All negotiation should take place via the internet or phone. Negotiate with numerous dealerships and shop the lowest price until you have exhausted all avenues. You will save a substantial amount of money.