CAR BUYING FOR DUMMIES 101

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 When neglecting your credit profile and score for financing, you will end up paying more in interest. The better the score, the least amount you will pay towards the vehicle. 

Example: For a brand new Toyota Camry, the cost of the car is $34,000.

BAD CREDIT: A score range of 500-620 could get you an average interest rate of between 10% to 20%-- costing you between $11,018 to $23,912 extra in interest possibly bringing you to pay about $44,018 to $56,912 in total for a 6 year car loan.

GOOD CREDIT: A score range of 640-750 could get you an average interest rate of between 0% to 9% --costing you between $0 to $9,829 extra in interest possibly bringing you to pay almost $42,829 in total for a 6 year car loan. 

Financing a crappy car is the BIGGEST mistake that consumers make. Not doing any research on the reliability of a car will hinder you in more ways than one! We found more research through Consumer Reports that shows the most reliable cars. A lot of our clients have REPOSSESSIONS on their reports or have been struggling to keep up with their car payments because they have chosen crappy cars that has also put them in a financial bind with paying hundreds of thousands in car repairs. CHOOSE YOUR CAR wisely! You can also visit the Car Shield website to get approved for repair insurance before your car breaks down. Click here: https://carshield.com/how-it-works/

Having a way to keep your car on the road by using repair insurance companies like Car Shield will also keep you from breaking your pockets all at once and facing repossession. 

Another mistake that is made is focusing on monthly payments and not reading your contract to note your actual finance charge. Some dealerships will fixate on your monthly payment because of your desperation and/or ignorance. Here is an example of a real contract that one of our clients almost signed.

Real Life Example: One of our client's was given a contract for a 2015 Chrysler 200 that is only worth about $10,500. This well-known shady finance company attempted to finance our client with an almost 29% APR (interest rate) having her pay $34,169.75 after she put down $2,900 as her down payment. They attempted to get over on her by showing her that her payments would be $231.65 biweekly equating to $463.30 monthly. Again, on a car that is only worth $10,500!!! 

Side note: The longer the loan, the more you will pay in interest.

Short-term car loans:

• 24 Months
• 36 Months
• 48 Months

Long-term car loans:

• 60 Months
• 72 Months
• 84 Months
• 96 Months

A common mistake with our finances is guessing what we can afford and not actually writing out our expenses. Miscalculation of our finances will put us in a bind and cause some of us to be piss poor if we misappropriate our finances. We should have money saved for transportation purposes. Having possession of car can get very overwhelmingly expensive. Costs such as:

• Monthly payments
• Fuel Costs
• Yearly taxes (depending on the state you live in)
• Registration & Emissions Tests
• Insurance (monthly)
• Repairs & Maintenance 
• Tire Replacement
• Parking, tickets & citations

ALWAYS try to shop around for anything financial. Start by shopping around for the interest rates for your car loan. The example above shows the most popular auto lenders and their average starting interest rates. You have a 30 day window to shop for interest rates where the hard inquiries won't negatively affect your credit score. 

Here is a table that shows the average cost of car maintenance over the course of 10 years for U.S. car brands. We have noticed that about 40% of our clients are or have face repossessions based off choosing the car brand that they cannot afford to fix while paying their monthly payments.  We have also spotted a high percentage of client's that have experienced repossession, has cars that are ranked higher on the list.

As we say time and time again, CHOOSE YOUR CAR wisely! You can also visit the Car Shield website to get approved for repair insurance before your car breaks down. Click here: https://carshield.com/how-it-works/