Starting Life…Right From The Start!
A Simple Guide For Making WISE Personal Finance Decisions
Published by Lester J. Callegari Jr. at Smashwords
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Copyright 2010 Lester J. Callegari Jr.
First Edition
Smashwords Edition, License Note
This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person please purchase an additional copy for each person. If you’re reading this book and did not purchase it or it was not purchased for your use only, then please return to Smashwords.com and purchased your own copy. Thank you for respecting the hard work of this author.
Table of Contents
Introduction
Chapter One
the secret formula
Chapter Two
negotiating the deal: three steps to success
Chapter Three
financing and leasing, the right way
Chapter Four
your internet options
Chapter Five
lemon laws of your state
Chapter Six
final checklist
Chapter Seven
how much do you have saved?
Introduction
Knowledge and wisdom. Without them where would we be? Well, I know that’s one of those questions that already has an answer. Ok let me narrow it down, if we didn’t have knowledge and wisdom about our personal finance where would we be? Ok that’s better. Now, that I have everyone attention and you’re pondering this thought. I guess most would say they would be billionaires never having lost a single cent to the sharks and wolves out there, right? Back to reality! Wow..think of all the money you have wasted on cars that have broken down on you, paid too much, financed for too much, and investments that have done not so good in the market, not been able to save at all, blew money on what you thought was a good deal only to find out later that you got ripped off! Know the feeling? I have known it way to often! But then something happened and I wised up! I found out that there was a way for me to keep some of my money in my pocket just like rich people! I found that if you look in the right places and ask the right questions you will have what people you admire have! The auto and personal finance industries are making BILLIONS of dollars, even in today’s economy, in unjustified profits by getting unwary consumers to relinquish their check books as well as their confidence in this market. Bank failures only happen when the focus and concern for profits out way the consumer rights. We have NEVER seen so much turmoil in our economy! When business stops being concerned with the condition of it’s customers and allow greed to cloud their minds, what you get is the current mess we are in now.
You see we have been where you are today, maybe broke, maybe have a job and still broke, maybe think you have it but “Murphy” keeps you in the red! Yes, we have lived a life of debt and we have live a life of debt-freedom only to get caught up in the vicious cycle of American capitalism again! I tell you, having six-figures in the bank, having cars paid for, house worth double what we paid for it, investments and 401ks worth 10’s of thousands, able to travel to other countries that most people only read about! Given a choice, which we have in America...I choose the later! You can keep the broke and poor life! We have decided that even with all of that, we want to live a true life of freedom...complete debt freedom! In 2006 when we decided to turn this train around it was a big paradyne shift! Yes, we had and we did but the bondage of this world economic system says you can only enjoy that kind of lifestyle if you owe every bank in the world and charge on every card that exist! Well, as I stated earlier, we have been debt-free before and several of our friends are debt-free and believe me it is MUCH...MUCH...MUCH better to be DEBT-FREE! Just imagine, not having to worry about how you were going pay your Mercedes car note, because the car is paid for! Just imagine, not having any credit card payments, loans or any other debt that’s sucks the blood out of your wallets! Just imagine, not having a mortgage because you have been diligent paying your house off earlier and now its paid for in record time!! JUST IMAGINE!!! Can you lead this kind of life? You bet you can! This book will help you get there! It can help you get things in order to put things in the right perspective so that when opportunity knocks, you are ready!! Now I recognize that old habits die hard, so this isn’t a “Dump Everything You Know” and do thing my way book, it is a introduction to getting your current financial situation to a place where you now have control! A place where you are no longer at the mercy of the financial institution telling you how to spend your money because YOU know how to keep your money! We are about to protect ourselves against such economic attacks to our wallets and purses. You will learn how to negotiate and save thousand on your next vehicle whether new or old! You will learn what to expect out of your next auto purchase experience! You will learn how your money works in the banking system! You will learn how to fix your own credit..legally! You will learn how to retire with money in your account instead of owing tons of money when you retire or relying on Uncle Sam to take care of you! You will succeed in winning at personal finance, follow this book and I PROMISE your life will be better!! Lester J. Callegari Jr.
Dedications
I would like to first thank God for blessing me with the wisdom and experiences that has taught me over the years. I would like to thank the love of my life, my everything, my beautiful wife for standing with me during the writing of this book...Thank you!
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Chapter One
buying right from the start, the secret formula
The car buying process. There hasn't been one single thing in the American dream of things that has brought so much fear and anxiety than the process of automobile acquisition. Except maybe paying taxes. The auto industry has made this simple process into a sweat generating, character demeaning joke. If you look at any product that you buy at a business, the process is as easy as 1-2-3. 1) Shop for what you want; 2) You select the item you want; 3) Buy the item. It's not that easy with car buying. This process can vary from 5 steps to 10 steps, a process unknown to you. This process is designed to naturally breaking down your resistance to negotiate effectively.
So, to help protect you from all of the different techniques that they will throw at you, I am going to give you the basic process, but most effective, that will work with any car dealer you will encounter.
In most cases, 80% of the time, when people buy vehicles, they fail to prepare for the second largest investment in their life. They just walk into a dealership blindly signing their saving away and then complain about how they were ripped-off. Well, who’s to fault here? Is it the money sucking auto industry whos main purpose in business is to make a PROFIT? Did you hear me? PROFIT!! The bigger the better! But, there is way too much competition out there. With every car maker coming out with new models every time you look around, reports being compiled about how this model is better that model, it invites the middle men, the dealerships, to get as many people into their showroom, by any means necessary. Unfortunately, that leads to some methods of persuasion that are not all together HONEST. So, the burden of protecting your bank accounts ultimately falls in YOUR own hands! You, us, as the consumer, must become aware and educated about this issue or we are going to continue to lose MILLIONS of dollars each year by overpaying for the cars we buy.
The Beginning Steps
The first step to saving money on your next vehicle purchase is knowing the terminology. This part is very important because one of the favorite tactics of the industry is to confuse the consumer with mixed terminology. This, of course, leading you to believe you're getting one thing and you wind up with something else. This generally leads to an angry consumer. Well, this is your chance to become an educated consumer.
TERMINOLOGY
Industry Terms
APPRAISAL - An official value placed on a automobile.
BASE PRICE - The price of a vehicle without any options.
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MONRONEY STICKER - A sticker that is required by the federal government to be display on the window of vehicles. Has to include base price, options price, MSRP and other vital information pertaining to shipping and fuel cost.
MANUFACTURER SUGGESTED RETAIL PRICE (M.S.R.P) - This is what the manufacturer says the dealer should sell the vehicle for. It includes the base price, options and other associated cost.
INVOICE PRICE - The price the dealer pays for the vehicle.
DEALER HOLDBACK - A discount in the form of a rebate the factory give's the dealer for selling a particular model.
FACTORY-TO-DEALER REBATE - A rebate from the manufacturer direct to the dealer.
TRADE-IN - When you sell your vehicle to the dealer.
CONSUMER REBATE - A rebate or money back direct from the factory to the consumer.
Financing Terms
ANNUAL PERCENTAGE RATE (A.P.R.) - The percentage you pay the finance company or bank to use their money.
TERM - Length of time in months of your OBLIGATION to the contract.
AMORTIZATION - The breakdown of the principle and interest payments over a specific length of time.
DOWN PAYMENT - An amount, usually cash, used to reduce the purchase price of the vehicle.
LOAN ORIGINATION FEE - An amount charged by the dealer, bank or any other financial institution that accepts your loan.
Leasing Terms
ACQUISITION FEE - A fee paid to a dealer starting the lease process.
CAPITALIZATION COST - The total purchase price of the vehicle.
CAPITALIZATION REDUCTION - Lease term for "Down payment" but is simply payments made in advance.
CLOSED-END LEASE - A lease where you simple walk away from any further financial obligations when the lease is over
OPEN-END LEASE - A lease design to place most of the financial risk on the leasee (you). You don’t get to just walk away, you are responsible for any difference in the residual value and actual value. Mostly used by business. Not that popular among consumers.
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DISPOSITION FEE - A fee that may be required when you turn in a vehicle at the end of the lease.
DEPRECIATION - A vehicles steady decline in value over a period of time.
EXCESS MILEAGE FEE - A charge for exceeding the mileage limit of your lease.
EXCESS WEAR AND TEAR - Condition beyond normal use of vehicle. Usually a charge is associated with any damage.
GAP INSURANCE "Guaranteed Auto Protection" - Pays off balance of vehicle in case of accident or thief.
LEASE RATE - The portion of payment that goes to finance charge.
MONEY FACTOR - The "Interest Rate" used to calculate your lease payment.
RESIDUAL VALUE - The wholesale value of your vehicle at the end of the lease.
Your Wants vs. Your Needs
When you decide to look for a new or used car, you must first determine what your exact needs are going to be. I know that for most of us, we all would like that new Mercedes S-Class or that new Bentley Continental Flying Spur, cruising down Rodeo Dr. blasting the sounds and looking good, right? Now, let's get back to reality! Go pick out that nice, new, red Honda Civic which is what most of us really can afford. I know I'm right about that! Our wants throughout history have always outweighed our BUDGETS. That's why the country is in so much debt today. The average person is in over $22,000 in debt and that doesn't even include a MORTGAGE!
**TIP #1** Never let your WANTS out spend the balance in your bank account!
If you are single you may desire a sports coupe or a nice convertible. If you are in the family way, there are a lot of options for your situation, full size cars, mid-size cars, compact sedans, station wagons, sport utility vehicles, etc. You get the point. Your choices are almost unlimited.