The Economy Sucks, So I Bought a Car.

Posted by Steve Rhode as Getting Credit, Just Me Talking, Motorcycles, Transportation

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I’m slowly crossing things off my list since returning to the U.S. to the house we bought near Raleigh, NC. Yesterday was a banner day for getting stuff down though.

In this crazy post 9-11 world and thanks to Osama Bin Laden, apparently you can’t buy a car in North Carolina without a North Carolina drivers license and you can’t get a drivers license without proof of insurance and you can’t get car insurance without a car, or so I thought.

My new local insurance agent is probably a bit more expensive than I could price shop around to find but I have to give them a real pat on the back for the service they have given me. They were actually able to write me a car insurance policy for no cars and I took that to the drivers license office to get the license.

In preparation for the license written test, which I knew I would have to take, I studied by reading the NC drivers manual but I wish I had found this site first by Jay Tomlin. After reading his site I went in and passed the written test for cars, missing none.

Now I wasn’t expecting NC to let me keep my motorcycle endorsement on my license but the very nice license examiner asked me if I wanted to take the written test for that as well. Knowing I had not studied for it I decided to take a chance and if I passed, great. If not, I’d do it latter.

Well I aced the car test and I missed a few on the motorcycle test. In fact it came down to the last question on the motorcycle test and if I got it right, I’d pass. All of a sudden, pressure. I had to take a deep breath and pause for a moment. I made my choice and surprisingly got it right. So I passed.

Now with the motorcycle endorsement on my license the fee came to $46 and I only had $43 on me. I certainly didn’t expect them not to take plastic. That’s almost un-American. “Cash or check only”, Mr. Gilliam said. “Nearest ATM?”, I said. I didn’t think he’d give me credit for the Â£5 note I had on me as well.

Getting cash out of the ATM made me chuckle and returned me back to the land where cars are such a critical part of our daily life. The ATM machine was a drive up one. Since I walked over to the machine there I was, standing in a line of cars, waiting for the machine. Picture this, car, car, car, me standing, car, car. Yes, it was awkward. But it did make me chuckle.

Coming from the UK, the whole concept of a drive-up ATM is a concept whose time has not come to England. I don’t know why. You can drive through and get food, but not cash. Oh well, one of those little things I missed but it would so much better if I’d had a car at the time.

So, Car Shopping.

I was going to save the necessary car shopping for the following day. I still wanted to go get a mobile phone, oops I’m back in the U.S., cell phone service, and go to the Apple computer store to pickup a new computer with dual 30″ monitors. I keep telling myself that setup will make me write better. Apparently I’m delusional or bargaining with myself.

On the way to those stores I thought I’d just stop by and look at a couple of cars that I was interested in. The Honda and Chrysler dealers were right across the street from one another so it looked like quick work just to pop in to see the Honda Odyssey and Chrysler Town and Country.

Apparently my mid-life crisis involves buying a minivan. What the hell is wrong with me? Actually the minivan is just nothing but practical with soon to be five adults living in Steve’s House of Business Studies.

I’m helping my nephew to learn the ropes of running an internet business. We are growing a whole new site together about everything nautical. We currently have over 2,000 naval images from WWI to the Vietnam era of U.S. Navy ships. This new site is going to be much like my aviation site, Rare Aviation.

My daughter’s fiance and I are starting a T-Shirt company, Rumplefart. He’s a great artist and I’m looking forward to working with him on that as well. My current aviation T-Shirt shop does well so we are expanding the idea into other areas.

So Danny, a nice English lad, will be moving to the U.S. with my daughter and they will be living in the house as well. I didn’t realize till last night that their bedroom will be right above mine. Potentially traumatizing for me. Hum.

Women Car Sales People, Just Better

At both the Chrysler and Honda dealerships, when I walked in, there were sales people standing around but in both dealerships, they ignored me and it was women who first approached me. Actually at the Chrysler dealership Channel accosted me before I even reached the guys standing inside.

My grand plan in the car purchase strategy was to become familiar with the vehicles so the following day I could actually go back and buy a car. What wound up happening was that because the saleswomen were so good in their professionalism, sales skills and assistance, they made it very easy to get straight to driving the vehicle and talking about numbers.

As I mentioned in a recent past post I had just purchased my credit report and credit score online so I knew what my score was, and it was good. (Massive credit erection) But I worked hard for that credit score and groomed it to be the best it could be, and it worked.

Having a great credit score gave me something wonderful when buying a car, leverage. I knew that if I went for financing on the vehicle I could get the best rate possible. I had also done my homework on the manufacturers websites and knew what current offers they had available.

Since I did not have a trade-in, it just made the deal easier since I could see what the actually vehicle price was going to be without a trade-in value to play with.

My strategy in buying the car was to pick the vehicle, call Consumer Reports and order the manufacturer invoice bottom line price and negotiate up from there.

I drove both the Chrysler Town and Country and Honda Odyssey and while I really wanted to buy the Chrysler for the Stow N’ Go feature of all the seats folding into the floor, I could not ignore the noticeable performance and handling superiority of the Honda.

I politely let Linda know that my expectation was going to be to pay no more than dealer invoice for the car. At invoice the dealer still has enough room to make a profit on the vehicle. If I wanted to take it down to the bare minimum I could have gone with the Consumer Reports manufacturer actual invoice for the vehicle and negotiate up from there. The dealer actual cost is lower than the dealer invoice cost.

But armed with my excellent credit report, Honda made me a very interesting deal. They would take $4,000 the dealers invoice cost, no money down and 2.9% 60 month financing. Hum, interesting, very interesting. The financing deal also has no pre-payment penalty so in cases like that I always go for the longest term I can and pre-pay each month so that in case something unforeseen happened I could drop down to the lowest payment till the hurdle was overcome.

That’s the same strategy i recommend with a mortgage as well. I’ll always go for the 30 or 40 year mortgage and pay more each month to pay it off much earlier, than lock myself into a much higher minimum payment. in fact, did you know that if you make your very first mortgage payment n the day you close you can shave abut 4 years off your mortgage. You can because it all goes towards reducing the balance and nothing towards interest.

The Finance Office

After coming to an agreement on the deal I knew I’d have to run the finance office gauntlet where I’d get hit up with all the after market things like undercoating, and the rest of the crap. The finance guy was very nice but I had to laugh when I saw on the list of things he was going to try to sell me was something called DingMonkey. Apparently if I got a door dent they would remove it.

I politely sat through the pitch, simply because I just wanted to hear the finance guy say DingMonkey. If I had gone with all the extras it would have added another $60 or so to the monthly payment.

I opted out of all of them. My windshield is not going to be diamond tough, the DingMonkey will not be visiting, AAA will have to do just fine for roadside assistance, and I’ll have to iive with myself for not getting the rest of the stuff as well. However if there had been a cupholder valet service, maybe then would have buckled.

Severe jet lag saved me from an extended sales pitch. I politely told the finance person that I appreciated his time, and saying DingMonkey, but my body was five time zones ahead, it was now 11 PM according to my internal clock and I was going to fall asleep any moment now. In fact I was so tired at that point that I elected to not take the vehicle with me. I’d go back the next day to get it.

Advice a Car Sales Person Once Told Me

A finance director of another dealership once told me a truism about car buying, she said, “No matter what price I agree to sell you the car at, once the dealership agrees to the price the consumer always feels like they could have done better.”

That’s true. While I probably could have negotiated an even better deal I’m happy with what I did do. Hopefully the dealer made a reasonable profit from the deal and I don’t begrudge them that at all.

So today after I get the new Honda I’ll continue my mission of getting the new cell phone and computer, they’re still on my list.

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Steve