Car Insurance★

Avoid Progressive Insurrance. Stay tuned for details of bad experiences at the hands this monolith.

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Porsche Horsepower

Automotive Financing★

I know cars like the back of my hand, however being ignorant of purchasing and financing them has me stuck in a difficult position. I made every mistake. I purchased the car that was most in demand, the only one of the model on the lot. I purchased it the day I test drove it. I accepted the dealers poor financing terms as my credit was bad. I didn’t check other dealers for the best price on the same car (the dealer told me they had the only one in southern California). And like a fool I believed him. They lied about a warranty, and promptly after selling me the car they fired my salesman and said he was a bad employee and that they couldn’t be held responsible for his actions which is why they fired him. The car was more than I could comfortably afford. Much more than I could afford in hard circumstances and now I’m behind on my payments. This puts me in a very difficult situation trying to sell the car.

In the future I’ll do my best to have at least 1/3 the cost of the car as a down payment. Wait at least 48 hours between test driving and purchasing. Compare at least 3 dealers prices BEFORE you even test drive the car. I’ll be selecting cars that I can comfortably make payments on even if I were unable to work for a month or two. And most of all I’ll check EVERY bit of information myself and not rely on another person for information on such a large purchase. I found it very interesting that it was a good idea to look for a lot with a lot of cars that are the same model as you intend to buy as this is a great way to get the car below the dealers cost. I didn’t even realize that a dealer would willingly tell you what they paid for the car! I was surprised that they said 4 wheel drive was not a safety feature. Perhaps it’s marketing but this has come to be synonymous with safety.  It seems as though every manufacture from Audi to VW to BMW offering it on their sedans, not trucks! I would also never buy a used car without having it fist inspected by a mechanic, however I would add that you should find a mechanic you trust (perhaps by referral if you don’t know one) rather than a random one charging $100 for an inspection.

            As for the banking segment I selected my first bank because it was my parents’ bank and my second because it was the only one my employer provided direct deposit to. I have never, before this class, gone “shopping” for a bank. I can’t believe how easily and quickly you can get information on who has the best interest rates and terms for credit cards.  I however totally disagree with the perspective on credit unions. I was 2 months late on my car payments, I was out of the country for over a month and forgot to make arrangements. I returned just in time to have them repossess the car which I then paid for IN FULL the next day. Unfortunately they refused to take off the repossession from my credit report, despite me paying the full balance of the loan the next day. I later found out that they had the wrong phone number and that they had been arguing with another individual for a week. But I was the one left paying for the confusion.  Another point that was well taken was the amount of service charges and late fees that I have been paying. I’ll be going though my statement and highlighting them all just as suggested. I’ve already opened a savings account and this alone has save me from hundred of dollars in overdraft charges. I was shocked to see that I was paying $3 for each ATM transaction that was not from and “official” ATM of my bank, and this was on TOP of the charge imposed by the ATM itself.

I especially liked the way they reinforced that a credit card is not YOUR money to spend. That it is a loan at best, and usually under unfavorable circumstances. When I first received credit cards I “spent” them as though they were a new resource of cash, with no thought to how many times I was paying for the same thing due to interest costs that seemed almost hidden. Earn what you purchase BEFORE you purchase! That was a lesson that was lost on me. Its an expensive lesson too, one you continue to pay for long after the sparkle of what you bought has gone.

Leasing a car sounded better before I realized that I’d be paying for normal wear and tear from ownership and that this bill could rise into the thousands when the time came to turn the car in. I was under the impression that was covered in the cost of the lease. However I like to change cars frequently and had hoped this would be a convenient and cost effective way to do so. The low monthly payments of leasing seem to advantageous now that I’m buried with a high monthly car payment on a car that I cant sell due to owning more on it then I can hope to sell it for. The only disadvantage I see is the lack of equity that you can build up when you purchase a car outright.

The other idea I got from the videos would be the opposite extreme: purchase a reliable vintage vehicle that is increasing value. A sort of driveable investment. For example ’72 911 Porsches increased in value by $750 last year and you can purchase one for about $15,000. They are very reliable and as long as I factor in the expense of repairing a 30-40 year old car they may be an option that’s not QUITE as crazy as it sounds. After my past experiences I’ll probably just buy a $2000 Honda and at least in the short term invest all my money into our business.

All in all I feel this class is essential life training and should be taught at an early age so as to reinforce the principles well before kids are put into the position of having credit cards available to them. My perspective on money has completely changed in the last few months thanks to this course. I no longer see it as something elusive and oppressive that I’m constantly chasing and worrying about. Its become something I can use to my advantage. Something to be mastered and applied in a constructive way. This knowledge is a powerful tool to a better life.

 

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