Thinking about buying a new car in the next couple of months? Perhaps, you just recently purchased a new set of wheels? How was the buying process? Were you prepared? Did you feel comfortable?
As much as I do not want to think about it, I am soon going to fall into the first category. In fact, I already do, particularly every time I take my car for an oil change and pick it up at the end of the day with an additional $500 in work. It always seems to be brake-related also - why is that? I can't help but get it fixed right away! Brakes are important!
Anyway, back to buying a car. Most women find this to be a very stressful process, myself included, and with just cause. How many times have you walked into a car lot to be ignored, disrespected, or worse yet, felt taken advantage of? Enter: Cars N Finance.
This seminar for women was hosted last night by our local Honda dealer in cooperation with a financial coach, who also happens to be a single mom. While the seminar did have some obvious bias, I did learn some very important items to consider when purchasing a car.
- Depreciation. We all hear about it, but I didn't realize that only a handful of manufacturers actually have depreciation rates less than the national average. Those 'luxury brands' - BMW, Lexis and Cadillac ? They may have a high resale, but they still depreciate faster than average. By factoring in the depreciation over the period you plan to own the vehicle, you are able to calculate the real cost of the car. Brands to look at that depreciate slower than the national average? Toyota, Honda, Acura and Volkswagen, among others. Check out "That Bargain may not be a deal come resale" for more.
- Critical Illness Payment Insurance. There are all sorts of insurances you can purchase that guarantee your payments will be covered should something happen leaving you unable to work or make them yourself. Why is Critical Illness particularly important? 1 in 3 women that purchase it, end up making a claim on it (according to the financial coach)!! Wow! Does it worry anyone else more that cancer, MS, and other terminal diseases are that prevalent in today's society? Yikes!
- Do your research. It's kind of a no-brainer, but I bet there are more of us out there that make our decision before really comparing our options and the true cost of the vehicle. What features do you really need and what can't you live without? How does fuel mileage compare? Insurance payments? Make a chart of your likes and dislikes, then start comparing your options to see what fits.
There were some important points I think were missed in the seminar. For obvious reasons, they pushed the value of extended warranty. Myself, I believe extended warranty is primarily a revenue-generator for businesses. I once saw an upside-down bell curve of the percentage likelihood of product failures. The majority occurred within the first year or after ten years. Using that justification, you could assume that in most cases if your product fails, an extended warranty would not offer you protection anyway. You would either be covered already (within the first year) or the extended warranty would be over. I think the particular article I read referred to electronics, but nevertheless, its an interesting concept to ponder.
Especially, since extended warranty does not cover normal wear and tear. When I look back on the life of my 8 year old Jetta, most of my major expenditures have been breaks, belts and tires. All would fall under normal wear and tear, or would not have been within the allowable extended warranty time frame.
The takeaway? Seriously consider if you will get any value out of the extended warranty! Worried about being stranded on the side of the road? Get CAA. It's probably a smaller investment, and I have found year after year, it pays for itself through use and peace of mind! Plus you can get great travel deals also!
Happy Car Shopping!