My one-time profligate secretary, who drove a more expensive car than I did when she worked for me, has become a hot-shot executive out in Chicago making three times what I paid her – and, well, she still she drives a more expensive car than I do. (I drive a 1996 Saturn I bought for $12,000 in 1998.) But I couldn’t be prouder: she bought it used. A five-year-old Acura.
Way to go, Mary!
And then there’s the gal who cuts my hair. (I used to cut it myself to save money, but now I spare no expense — $20 including a lavish tip.) I gave her a copy of my book, and she reports that she has just bought a used Honda. Her boyfriend wanted to go the whole nine yards and buy a new car. She put her foot down . . . and even walked out of the dealership when the salesman stuck at $7,500. Sure enough, he called her at home the next day and it was hers for $6,400. And there’s more! She put $1,300 down and he was trying to get her to take financing that worked out, she says, to a 29% rate. So she persuaded her parents to write a $5,100 check against their home equity line, charging her the same 8% it cost them. (And they still come out OK, because they get the tax deduction.)
Way to go, Jessalyn!
But somebody’s got to buy new cars, I know, if only as a means of producing used ones for me and Mary and Jessalyn . . . and my friends Paul and Dennis did it the new-fashioned way (with a lot of good old-fashioned homework). Listen . . .
Paul Johns: ‘The Internet really changes car buying. We kinda went crazy and bought two cars the last 10 days. My 1989 Toyota Corolla with 134,000 miles needed more repairs than it was worth, so it was time. We traded it in on a Passat. We also had a ’93 Eurovan with a pop top but without full camping equipment/cabinets/furnace, so we traded it on a Eurovan camper. We’re hoping to do a bunch of camping this summer; there are lots of great places to go near here.
‘I checked used car prices and decided that having a new car, with new features and new warranty, was worth the extra money. So we used Carpoint and the manufacturers’ sites to do the research, and Carpoint and Edmunds for invoice estimates (also, Edmunds has a model- and geographically-sensitive estimate on the car’s value in your area).
‘For one of them, we used CarPoint and AutoByTel to get quotes from a few dealers. It was nice to have them calling me with good quotes, competing for my business. And I ended up not having to drive around to dealers and browbeat the sales people. Frankly, they treat you with a lot more respect if you’re referred through these services.
‘We got a very low quote from one dealer that we took to the dealer/salesman we really wanted to do business with. He wasn’t able to match it, but he was able to come close enough that we were entirely happy. It was frankly worth the extra money to do business with the best dealer in Seattle.
‘The last time I bought cars (in 1989 and 1998), the experience was very different. I didn’t have a good idea of what the dealers paid for the cars. I knew nothing of the holdbacks (a percentage manufacturers rebate dealers). So I was in a much weaker position, and the process frankly just wasn’t much fun.
‘So using the Internet – especially the buying services – levels the playing field a bit. I want my dealer to have a healthy business, but I don’t want it to be TOO healthy at my expense.’
☞ Thanks, Paul! For more price-comparison and quote-service sites, try searching on ‘cars’ at Goto.com. To avoid price haggling altogether, buy a Saturn – the price is the price.
Rest in peace, Mrs. Landingham.
Quote of the Day
Very few American investors buy any stock for the sake of something which is going to happen more than six months hence, even though its probability is exceedingly high; and it is out of taking advantage of this psychological peculiarity of theirs that most money is made.~John Maynard Keynes
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