Thursday, March 20, 2014

Vehicle Lease for longer term?. Lower payment?? Look closely!

  We are all in search of the LOW payment when negotiating our lease. Something I hear day after day is... "I need the lowest payment possible!"  What we forget is that we should be shopping by purchase price and not by payment.
      What does that mean? When you purchase or lease a car, you want to make sure you get a good deal. This is based on the price you pay for the car. The monthly payment will fall into place. Once you negotiate the purchase price of the car minus your rebates, money down or trade,  then all you have left in the term and the interest rate/ money factor. THE PURCHASE PRICE DOES NOT CHANGE WHETHER YOU LEASE OR PURCHASE your vehicle.  You could be leaving money on the table.
           36-39 months is pretty standard in the leasing world for a vehicle lease agreement. Its really the most common. Its not forever and you are mostly covered by warranty depending on your miles that you are driving. Most manufactures push these terms and will offer the lowest payment, best money factor and a good residual. To go longer would be silly because the payment sometimes actually goes up. It does NOT make sense. A big down payment is not a solution!
       Some  Other manufacturers do offer longer terms like 42, 48 and 60 month leases. STOP and THINK before you jump on this because the payment is lower. If you have to stretch a lease out that long to afford it, you may be on the WRONG car! This car may be too expensive for your budget.  The other aspect of choosing a longer term can be the difference in cost of tires, brakes and other maintenance. Before you sign on the dotted line, look at the whole picture and revisit the cost of a purchase. The cost of more payments, interest, maintenance and repairs adds up. Sometimes we don't realize how that extra 6 months or year did not really save us anything if we have to spent 500.00 to 800.00 on a set of tires!!!! Maybe it opens you up to look at some different cars.

I call those problems "high class problems". The problem of which car to choose!!!!! We should all be so lucky.

              We all want a good deal. One that is fair to all parties involved. That includes the consumer and the dealer. At the end of the day, you need to make sure that you do what is in your best interest. Follow your gut, stick to your budget and take your time. We talk ourselves into things because we get so excited, but it is a contractual agreement so you need to take it seriously. 


Friday, December 27, 2013

Are all auto dealers the SAME?????

Are all auto dealers the same? Of coarse not!!!!!  Depending on the customer service, honesty and ability to treat people will separate how the dealership is rated. Unfortunately you can always get a few  selfish, dishonest salespeople or mangers that will ruin it for everybody. They are motivated more by the mighty dollar than the consumers best interest. 
 "There are good dealerships out there." I hear this from readers and from consumers. This is true. I do not want to sound like I think that every dealership is trying to take advantage of the consumer. There are some good people out there that do care about their customers.

I have however been in this business for over 19 years. I am driven to educate consumers about how to make sure they protect themselves with information. There is nothing wrong with running a business and making money, but why should one consumer buy a car for invoice , and the next customer comes in and is not as educated pay MSRP?
What does the dealer say? "They should have negotiated a better price!" "The customer should have made a better choice." Isn't it the job as a salesperson to educate the consumer so that they make a better decision? I feel like we as sales people need to help more and educate more! I think the "sell" would be a lot easier.

There are a couple ways to check out dealers and their reputations.

* Look at their ratings with the Better Business Bureau in your area. See if they have any complaints.
* Google the dealership. See what consumers are writing. Not paid testimonials!
* Ask your friends who they deal with OR if any of them have had negative / positive experiences.
* Check with the Attorney General in your state. That is a good source to see if the dealership has had consumer issues or complaints. 
* Use Social Media to benefit you and reach out to your contacts and friends and ask for referrals.



Wednesday, December 18, 2013

Do I have 3 days after I buy my car to give it back?

NOT in Ohio.  This law known as the "cooling off period" law varies depending on the state you live in. This is the law that most consumers think gives them 3 days to "undo" a deal on a vehicle purchase. Wrong!! When you sign on the dotted line, you own it. Maybe if the dealer is a friend or family and did not submit the paperwork to the bank yet to be funded, you may be able to cancel. But that is the dealers discretion.
     Recently I had a woman that I had  met networking call me. She mentioned that her daughter bought a car and she thinks it may not have been a good deal.  This happens everyday! Buyers remorse. What comes from people making decisions without doing some homework.  What I had found out was that this young woman who scored over 700, accepted a rate of  over 6%. She probably could have qualified for the 0% on a new car. She was sold/ she purchased a bunch of aftermarket products that she probably did not need and bought a current year rental car with 33,000 (estimate) on it.. ARE YOU KIDDING? For a similar price the same car could have been purchased  new.. When I had a conversation with her to try and help her out, I realized that the Attorney General in Ohio does not have a "cooling off period" law. According to the Attorney Generals website http://www.ohioattorneygeneral.gov  certain consumer laws require sellers to provide cancellation rights. That does not apply to vehicle sales. YOU NEED TO EDUCATE YOURSELF  and make sure you are positive. Follow your gut!
     I think  this law never came to my attention because I try to  make sure that my customers are comfortable and feel like they are making the right choices. I will not do a deal if there is uncertainty!
               This young women was able to cancel some of the aftermarket products that she bought but did not need, but was stuck with the loan and the purchase of the vehicle. The guy in the F & I (finance and insurance) office was not happy... He loses money. I asked the dealer why they did not offer her the new car option. He said in not so many words that there was more money in the used car with 33000 miles. She is going to refinance through her credit union.  This is information! It does not say that every single dealer and salesperson is like that....but you cannot expect the dealer to educate the consumer. The consumer needs to ask questions and compare. Once you sign... YOU ARE AN OWNER! YOU JUST BOUGHT OR LEASED A CAR. I do need to say that with all the resources we have available, consumers can avoid becoming victims. Once you have the information and you still make that decision you are a volunteer.

Here are some things that may help.

1) If your buying late model used, compare the "new car deals" going on. Ask to see a new car invoice on a comparable vehicle. Also ask for special financing rates through the manufacturer. This will help you evaluate how to get the most for your money. Always get a pre inspection on ANY used car!

2) When going in to the finance office, do not let your fear make your decisions. If you have had the used car inspected and your mechanic says its a good car, follow your gut. Weigh out the cost of aftermarket products vs what the repair reviews are online. Example:  if a warranty costs 1300.00, please think about how much car 1300.00 can fix? You also pay interest and tax on that money. Gap insurance is always less expensive through your insurance company. You can ask the person how long you have to make the decision. It is usually 14 days to purchase the products. DO YOUR HOMEWORK! Let the emotion cool down.

3) If your not sure if it is the right deals for you, WALK! You do not have to make the decision right that minute. Take 24 hours and make sure it feels right. Remember, there is no "cooling off period". You sign it, you bought it!








Sunday, October 13, 2013

Do I have a TURN IN/Disposition fee at the end of my vehicle lease?

If you are leasing an vehicle through a bank or a manufacturer, you most likely have a turn in or disposition fee. You may not remember when you signed your papers or the finance person conveniently forgot to tell you, but it is there. It is towards the top of your lease agreement and it is probably between 300.00 and 400.00. It ranges depending on the financial institution.There are only 2 manufacturers that I am aware of that do NOT have this fee. Honda... which is going to change as of October 16, 2013 and Ally Bank used by Chrysler and GM.
    It is very common that when customers leases are coming up, they can forget that this fee is there. When we get a new car, it is exciting and we think that it doesn't matter in that moment. This is somewhat true, but it will need to be addressed when you get to the end of the lease term. If you turn your car back into the bank or manufacturer, the bill will come! There are many things you can negotiate with the bank when you get that bill. They do not negotiate on the disposition fee!!! It is contractual. It was part of the lease when you signed it.

That being said, you can get creative. There are ways to get around this fee.

1)You can get another car through the same manufacturer. They will waive the fee and sometimes some of the damage on the car being turned in. So make sure you ask about that!

2) You can buy the car. You do not pay the turn in fee if you purchase your leased car. I am not saying that this is always the best option, but for some consumers the residual is under market value.  They would not be able to duplicate the same car in the marketplace for the purchase price ! It also is a way that you do NOT have to pay the over miles if you under estimated.This also works if you have a friend or know someone that wants to buy it. To clarify, the residual is the amount that the car can be purchased for at the end of the lease. It is in your contract and also one of the factors used in figuring out the monthly lease payment.

3) The vehicle can be traded  in and have the dealer or a wholesaler buy it. This is also a way to avoid paying over miles and damage if the value makes sense. Sometimes there is even equity that you can benefit from. Make sure you do your homework and shop the car around!  Weigh out the cost both ways. Get a second opinion if your not sure!


The next time your signing or negotiating your lease contract, ask about:
 *The purchase price of the vehicle- whether you lease or buy, the purchase price should be the same!
 *The residual at the end of the lease
* The turn in or disposition fee
If you do not trust the salesperson your working with, then find one that you do. Your gut is your best meter and it is your money.
Having been leasing and selling cars for over 19 years, I am just sharing what I think can help consumers to understand.


Sunday, August 18, 2013

Where is my spare tire? Why doesn't my car have one?

This is a very fair question. I was a few months into leasing my 2012 Kia Soul when I was reminded of this reality. My car had no spare tire and I had a major flat! Now, let me clarify that I know they all feel major, so lets just say that there was no room for getting to the closest tire shop. It needed attention right then.
   As I sat there figuring out my pump with the can of some sort of "fix a flat" provided by the manufacturer and my manual and the other pieces parts that need to all fit together to make this thing work,  I realized that this is a common occurrence in many car models being produced today. I have been meaning to write about it since.  By the way, that can of goop that you pump into your tire, is a one time use item. That means you need to replace it after each use. It can also do damage to your tire pressure monitor sensors that are inside the tire. Those are the sensors that send a message to your car to make the light go on in your dash that tells you your tire pressure is low! This kit does not work if you have a blow out or shredded tire so keep that AAA number handy or the manufacturer roadside assistance information in the car! I do need to say that the technology of tires today does help to minimize those instances.
I will say that once I got the tire filled with this kit out of the compartment,  I was able to drive to the shop that works on my car. They pulled a bolt out of my tire that was the size of my thumb!!! I still have that bolt. They were able to fix it. They did say they could not tell if the TPMS (tire pressure monitor system)sensors were damaged. I was grateful I did not have to buy a tire. 
Another reason that you may not have a spare, is that you have run -flats on your car. This is a type of tire that can drive up to 50 miles if its punctured. This is common on BMW's and the Toyota Sienna AWD minivan has them. Run flats cannot be fixed or patched. They must be replaced and they are not cheap. I found that out when I purchased my 2011 MINI Cooper countryman. I do have a customer with a 2006 BMW 3 series who did not put run- flats on his vehicle when he replaced his tires and does not have a spare. He chooses to take his chances. He saved quite a bit on the tires... Is it worth it?   A run- flat also has more road noise and does not last as long. That statement comes from part experience and some reading of reviews.
So we wonder why this is a trend..... Well I think that the manufacturers are all competing for the best MPG! The miles per gallon. The fuel economy! Who has the best when the price of gas is creeping up, up, up? It also saves the manufacturer money to sell a car with 4 tires instead of 5.
Some people never find out they don't have a spare until they are sitting on the side of the road, need to figure out how to use that kit or call for help. Some don't care. I recently asked a mechanic about her thoughts on this trend, and she is a fan of keeping the spare. When in doubt, DO YOUR RESEARCH! Ask your mechanic,  google reviews from people who have had actual experiences and ask your sales man... Does this car have a spare tire?

I will say that I find it ironic when people do so much homework and spend so much time to find the car with the best fuel economy, then they load up their vehicle with a ton of stuff that they carry around with them all the time in the trunk of their car. All that fuel economy goes right out the window. So think about that the next time you open your trunk and there is a bunch of stuff that has been sitting in there for a long time. It is costing you money!!!

Here are 2 websites I like that may help you:
www.fueleconomy.gov
www.safercar.gov




Tuesday, August 13, 2013

What up with these surveys?

Everywhere we look now are customer service surveys. It is sometimes annoying. I get it! Companies want good ratings. AT WHAT COST? I say that because I was under the impression that surveys are to help improve customer service, see how a company or product can be better and all around help the manufacturer and the consumer. WRONG!

   Now you know that a blog is an opinion and I want to clarify this is just my view. I see it from both sides. As I work with dealers all the time for my customers. 

These surveys are misleading to me. Here is why. The dealers have these surveys that the customer is going to get after they purchase a car. If the customer does not answer everything perfect, then the dealer fails and loses money. 
Some of the manufacturers will take away all of the bonus money that a salesman has coming. 
So if you as the consumer answers with a 9 on cleanliness of the dealer (example), and it is out of 10?

FAIL! there is no room for error. This is one of the reasons that your dealer may be trying to really go over this with you. 
Here is what I find to be disappointing. This hurts  the consumers and the dealers! The dealers are forced to do it because of the manufacturers guidelines . They are requiring certain numbers on those surveys. It is a lot of pressure for a dealer. Especially when lets face it, you just can't make everybody happy. The consumer may have something to share about how they feel the dealership could improve.  The dealer can never get the real answers to help them improve and the consumer can never share their true feelings without really hurting their salesman that they may have really liked! The dealers do get a chance to reach out and make a situation right, but the damage is done! 
   Some dealers have a video session so that the customer can do a testimonial and this also coaches them to give the dealer the ratings they are looking for. This to me is such a SCAM! It basically is using a survey for all the wrong reasons.
Some of  ratings are used on a national level so that manufacturers can say that they get such high customer satisfaction. This is NOT accurate on all levels. Some customers are happy with everything, but you always have people that struggle with understanding or have expectations that are unrealistic!
On the other hand, dealers can be bullies, and dishonest and terrible with customer service. This is a way that a survey can hurt their pocketbooks! Whether it is by mail, email or on the phone, the answers that you are giving on the customer satisfaction survey are important. Just not maybe for all the right reasons! 

Wednesday, March 13, 2013

Interest Rate Insanity

      It is astounding to me that just because a consumer may not have a rockstar FICO score (700 or higher), it opens them up to be totally taken advantage of with a car loan.
The other day I had a referral call me looking for some help purchasing a new car. She had already made contact with a dealer and they had a car she wanted, but something was making her uncomfortable. As we communicated, I asked her to find out certain information about her purchase. We were texting an talking. I told her to ask questions like:
What is the MSRP?
What is my purchase price?
What is the invoice price?
What is the interest rate?
How many months is my loan?
These are all important things to know. She knew that she was not a 700 and probably closer to 650. She mentioned that she had a relative to co-sign.
**This can be great but you need to make sure that your co signer qualifies.

        The consumer had put down a 200.00 deposit before she knew her interest rate or co signers information because she wanted the car..  I told her to sleep on it and follow her gut.
The next day she called me from the dealer and I could not believe what I was hearing.
Her credit score was a little lower than she thought. This gave them the open door to bump the interest rate. They told her she would be at a 12.00% interest rate vs. 4.00% she originally thought.
Her cosigner shows up and has NO credit.
**I cannot stress enough how important it is to know this information before you go into buy a car.
All of the sudden the price was very different. I told her to get up and walk out. I would help her find what she wanted. I sat on the phone with her and walked her through it.

      Within 2 minutes her interest rate went down to 7.99%!!!  Now they all of the sudden they wanted to come down on price by 500.00 and lower the interest rate. That did not happen until she was ready to leave and not purchase the car! They had the car she wanted and they knew that she was fearful with the credit situation.

If she would not have listened, they would have closed the deal on those numbers. This is Insanity.
1)educate yourself
2)know the interest rates
3)take time to get that credit score up