YOU aren't listening. I really don't care if I'm getting a good deal, a great deal, or a terrible deal. That is not the point. I just want to KNOW what this charge is, that's all. If you don't know, just say so. Don't try and tell me that I shouldn't care! Its really not a difficult question, and I could well accept a 'worse deal' if it makes me happy and it only costs me a few hundred bucks. But is it asking too much to know what I'm paying for?
charged to the dealer by the manufacturer - but you REALLY should care what kind of deal you're getting, compared to real market value, instead of worrying about the minor details.
Those ads that say "Your Local XYZ Dealers" instead of "Bob's XYZ on Route 66" - Local/regional advertising costs passed on to dealers. They don't have as much (or even any) say in the ad budget as they do in their own programs. The invoice is their bill, and it can contain the cost of this advertising as well as the base auto. How much they are willing to sell the car for depends on many factors, this is just one of them. As stated previously, there is no magic about the "invoice". The only number a purchaser needs to worry about is the sales price as an out the door price, including any dealer doc fees, taxes, MV fees, etc. It is the leveler across all deals. Start trying to work with "invoice" + or - and you'll be comparing apples, oranges and tomatoes. Don't overthink the problem. How many $ each dealer wants to come out of your pocket for the car is all you need to know, not how or why they came to that number.
Infiniti gave up with these and just added 1.5% to the cost of the cars. We would have customers loose it over the $400 marketing assessment. Even when I pulled out the invoice to show them they would just accuse me of making it up or something similarly stupid.
Here is what people are trying to tell you. The only number that should matter to you is how big of a check you write (or how much you finance).
I am thinking about doing a Jolie and buying an Outback XT LTD. Invoice is 30K, MSRP is 33K. What I would do is offer 31K total out the door. m I do not care how that number is arrived at. I will write a check for 31 K and drive home.
The dealer will (probably) come back and counter about 34K out the door.
The point is, the dealers can always come up with new fees and such, some of which are pure profit. If you focus on out-the-door, then thier playing with the numbers will not impact you.
........ If you get a chance, check out http://www.hilotrailer.com .. these are great trailers to tow, low wind resistance, obviously low center of gravity and there well built ...
I have towed alot of boats from 30/38ft and weight up to 15,000lbs, so you gotta watch that tongue weight - and don't forget those brakes ... trailer guys are like boat dealers, they want to "over sell" the unit and leave the towing up to you, thats why you see so many boats on the wrong trailers and wonder why that 24ft Mako is sitting on the berm of the road and not at the Marina ..........
If you guys are going to do a 2/3 week trip with all the steep hills, curves, mountains, goofy drivers, rain, wind and that nut case driver that "almost" misses his exit but pulls in front of you instead, then make sure you know the actual trailer weight - "wet" .. not brochure weight or the guys opinion .. that means propane tanks, maserator, water, spare tire, blankets, extra fuel, furnace, air conditioner, food, clothes and extra options .. you would be "amazed" how 6,000lbs can mysteriously turn into 8,5/9,0/9,5lbs+ .. in Florida, we are mostly on flat ground, but it makes a "huge" difference when you take that 7 grade ride down from Flagstaff vs driving from Tampa to Orlando, so I would recommend that Hensley .......
I'm not the only one here who thinks you are making this very hard on yourself!
Why does that matter? The car is either a good deal to you or it is not. It's a car in short supply? While you are micro-analyzing this to death, someone less anal will probably buy it.
"How can you offer an 'out the door' price when you don't know what the REAL invoice is. Is it the one Edmunds and the others list, or is it the one with an extra $444.50 on it?
My out the door price is going to be $600 under invoice. But which invoice? I can't make the offer unless I know what I want to take $600 off of."
Honestly, I don't get it. Bowke used a good example and the point is this: Which one is less at the end of the day? That is, who would get the smaller check? You could compare Dealer A who is telling you he is $1000 under invoice (great deal, maybe!), Dealer B tells you he is $500 under invoice. Gut check tells you A is better, but as you found out, maybe not. Since you apparently are only buying on the price (by your own admission the preferred vehicle is available for $144 more but you choose not to buy), what does it matter, really?
Dealer A could SAY he's $5000 below invoice, but the check he gets could still be more than B's invoice-$500. This is what the dealers are trying to tell you. It's irrelevant when a comparable is used. The only number that matters is the one you put on the check. And while your point about wanting to know what you're paying for is pretty valid, you don't know (yet, since you haven't seen the contract) that the dealer telling you he doesn't have them isn't instead charging a $250 services fee or a $200 doc fee or whatever. Those fees AREN'T on invoice. Now what? Back to square one.
If you sat and analyzed all this as carefully as you are with the ad fee, by the time you're done, you will need to research a different car. Find 2 comparable cars, and if the distance or service or nothing else matters, go with the guy who gets the smallest check, REGARDLESS of what he says it is under invoice.
We checked into the hilo (on the web), there's no dealer up here and hubby doesn't like them.
We are looking at Forest River Surveyor, very nice lightweight trailer made for light duty pickups and SUV's. Will definatly have it weighed dry before we buy it and then watch our weights. The one we are looking at *should* have a wet weight of less than 6500 lbs. Can't be any worse than pulling a 5k lb horse trailer with a Mazda B4000 up and down the hills, no trailer brakes either.
From what I'm hearing on www.titantalk.com people are having good luck hauling up through the mountains with 8k+ behind the Titan. Tough little (big) truck.
We watched the Hensley video last night, definatly getting one!! Wow, even my hubby was impressed and he's very experienced with trailers.
Ok, just curious, what brake controller do you use? We are torn between the Prodigy and the Brakesmart.......about a $100 diff between the 2 and they are totally different from each other. ARGH, too much to think about!!!
I'm going to have to get the wiring on the truck fixed today and hope I don't back into anything. All hubby said is "well, it'll make you pay more attention now." Guess he knows from experience. hehehe
Ok, off to the dealer to get the Titan's quirks ironed out.
Well, first, thanks to those who did try and explain how it is that 2% is added on in some crazy code at the end of the invoice.
Of course I'm looking for the best price out the door, but isn't it nice to be familiar with the various things that are going to be thrown at you.
Just to clear one thing up: there IS NO $144. That was all hypothetical, I'm really not sure what the difference is going to be, I'll find that out when I shop again this weekend.
Its nice to have an idea what a 'fair' or a 'good' price is, and I think I have that, especially if these ad fees are legitimate.
if you use an OTD price, then the dealer can charge you a "belly-button fee" if he wants to...as long as he gets the # on your check correct.
would it be nice to know where every penny goes? sure.
but ive been doing this for 5 years, and i still havent got a clue...and i dont care to either. i promise that you will paralyze your brain by worrying about it.
Problem is my hubby is in love with the Titan and has a toy plan in place. Even if I did want a new car I'd get stonewalled with the "we must stick to the plan" speech.
His plan is to buy a camper next year, pay it off in one year, then buy a boat. When he has those 2 things he'll quit his side job.........which would make me a VERY happy wife.
Heck, if it meant driving the Titan for 10 years to get him to quit his side job I would. I worry so much when he's out falling trees for the logging operation he contracts with......that's his side job. He was almost killed in an accident 3 years ago, he's a very lucky guy to be still walking around.
my advice to our friend in Alaska is to not buy anything that you cannot pay for in cash. If it means borrowing money, then don't get it.
This advice does not cover buying a house, because that is an appreciating asset.
On another topis: Yes, Driftracer, I am proud to see that I have contributed so much to the welfare of mankind that my name has become a verb. Soon I will be as well known as John Crapper, who, as we all know, invented the modern day toilet that we all enjoy so much.
I agree for the most part, but I don't mind taking out a short term loan for a major purchase. If we can take out a loan and pay it off in 1-2 years its fine. The majority of our stuff is paid for, so a loan here and there doesn't hurt anything.
Akangl, paying interest is "NOT" paying yourself. Personally, I'm just like Bobst, if I can't pay cash, I don't get it. I became totally debt free in 1989 (age 31) and will never, EVER, go back to owing anyone anything. That is a luxury that I have strived for and have finally reached it. Even if it took driving a 1997 Cavalier with a few extra miles, I would do it. )
If you can pay off one item at a time, you will build wealth slowly. Once you reach 40 yrs old, you should try to have a decent savings account or you will be doomed come retirement time.
Just my .02 Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
I spent years buying $1k cars for cash, fixing, driving, selling, getting another... and when I did the math, in the end I should have just gotten a cheapo Civic hatchback, done the $180/month over 5 years and been done with it.
It all depends on how much time you have, what the car does for you... if you work 30 miles away in a nasty climate, a good car is an investment. Not in sheetmetal, but in your career.
Of course, I've only ever had one car loan...it's the one we have now. Owe $10k on an '03 Sienna, naught percent. I don't think I'll do it again, though.
I agree with you, everyone's situation is different. I hate to see anyone waste money on a car when they never seem to dig themselves out of debt.
This is not directed at our beloved Jolie. I don't think it's a good idea for a person who changes cars often and rolling debt into each new car is a good decision.
Not everyone can pay cash for a car and good reliable transportation is a necessity. On that note, a person should concentrate on one loan at a time and GET IT PAID off before going on to something new. Credit card debt should not be rolled over every month. Paying it off every month is ideal. Non-deductible interest EATS into your wallet.
I learned about compounding interest about 20 years ago when I started taking care of my great aunt. Over her lifetime she never made a lot of money but saved regularly and took a European trip almost every year to see relatives. I would do all of her bill paying, etc. I noticed that she had one particular 5 year CD in the early 80's earning 14% interest. She never added to that CD and let it roll over at renewal. A $37,000 CD turned into almost $90,000 after about 10 years. I had to put her into a retirement home when she was 95 and she lived to be almost a 101. Thank goodness she saved her money because at $4,000 a month, it can go fast.
Mark
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
Never do again is roll negative equity. I always make sure I put enough $$$ down to be even on my trade even if I'm upside down at the time. There was a time we rolled neg and had loans on cars for 125%+ of MSRP, never again! On the other hand, I have gone in with a few paid off trades and yes, it is very nice.
As for savings we have it. Plus my husband has a HUGE retirement account in addition to any retirement that comes with his job. We aren't broke by any means, although sometimes it feels like it!! By the time my husband retires in 19 years we will have a house where we want to retire paid for, plus all our toys paid for.....the toys we currently have are paid for.
We sold our horses and horse trailer because the dang horses were a money pit. We were spending $3k/year EACH in feed/vet/farrier and we had 4......you do the math. Now we are concentrating on getting a few small toys, a camper and boat mainly. I think we are done trading cars for a while.......that is if we want toys.
You guys just need to keep me on the straight and narrow!! LOL
I would also respectfully disagree with the viewpoint that buying cars in cash is THE only and THE best way to do things.
Certainly, paying non-deductible interest is not the best thing to do. However, while it should not be the only factor, the effect of "not using credit" on your credit score is an issue. Perhaps some people will say to themselves, it doesn't matter what my score is, since I will never use credit anyway. The problem is, if/when/hell freezes over/whatever, and you do need credit, a person's score may be dramatically lower than it might be--because there is no installment loan history and other factors, like paying the card off in full each month to some extent actually hurts a score.
Are those good reasons to NOT pay your credit card in full if you have the means or to buy a car with cash if you're able? No, probably not. But it also means a person might want to take advantage of 0% car loans, to provide that history and prompt payment of a loan for the full term helps a score more than anything.
over the course of a 5 year loan, the value of each dollar drops...so why would you want to spend it all at the beginning, where the dollar is at its most valuable?
to compound things, the car depreciates at the same time.
example:
a 2005 nissan altima can be had at around $20k. the 2010 model will probably be in the $25k range, based on history. by paying cash, you not only drop your money into a depreciating asset, you also let someone else keep the inflation.
although quick, easy, convenient, and ego-boosting, paying cash is only an advantage emotionally.
.....not that paying in cash is a not a good idea, but with interest rates as low as they are (I've got 2 loans on both my cars under 4% --- VERY cheap money). I have done and can do much better elsewhere with my money. Also, I'm not a big advocate of paying cash on something that depreciates in value as quick as cars do.... I'd rather leverage my money and use it elsewhere.... Not that my view is for everyone, I'm also one who thinks that paying a house off is not the "wisest" use of cash, but that's a different topic not for here.
Maybe it is the 70 hours that I am working a week. Or maybe its the weeks that I am working on the financial package that I turned in this morning but, if the past three posts is the best that you can come up with for not paying cash for a vehicle, I think that I will continue to pay cash for my vehicles.
Tornado - The old "if you don't borrow for a vehicle, you will have a lower credit rating." I would argue that people who continuously borrow to purchase vehicles on credit tend to have weaker financial positions.
Personally, I don't worry too much about credit ratings ... unless someone is borrowing from me. If I need a vehicle or another house, I have the resources to self finance.
As a CPA, I donate some time each year to help people out of the financial messes that they themselves create. When I started doing this, my gut told me that the people that I would be seeing wold have incomes less than $30k who were overwhelmed by a major uninsured medical event. No, what I am seeing more of are 20 and 30 somethings who bought more house that they could afford and add two large car payments and other toys.
You can get a great credit rating by paying off a small credit card and staying out of the car financing market.
Bowke - using the present value analysis that you are using is inappropriate and misleading.
First, you assume that a Nissan Altima will inflate a full 25% in five years. If anything, the trend in car prices have been DEFLATIONARY for several years. Prices on used cars have been dropping until recently while rebates and markdowns have been the norm for the last four or five years on most but the most popular models.
Most economic research that I pay dearly for tends to lead me to believe that future inflation will be in the area of 2%. Now, if we return to the days of say, the Weimar Republic in 1931, your argument would have a great deal of validity. And we would be paid two or three times daily.
BUTCH - the old "my money will do better somewhere else argument" That is a good one. I can remember back in April 2000 when I walked into my Smith Barney broker and asked him for a check to pay off my 8% mortgage. Have you ever seen a guy in a $500+ suit grovel?? "I beg you PLEASE, PLEASE don't take money out of your account to pay off your mortgage. You are making 20%+ on those funds for the past 3 years. Why do you want to pay off your mortgage and save ONLY 8%?"
Personally, when I head to the dealership, I am looking to buy a car where someone else has taken the haircut on the depreciation. In financing a vehicle, I find that I am less willing to spend a lot when I have to write that check. Any salesman worthy of the title knows that it is a lot easier to sell a vehicle for $300 a month for 48 month than to sell one for $8000. I sign checks over $1 million for business, but it is painful to write a check for $10k, especially for something like a car that is going to drop in value like a rock.
"using the present value analysis that you are using is inappropriate and misleading."
no, not at all. the MSRP of an altima GXE in 2000 was ~$16600. the 2005 2.5S is ~$20380. do the math...cars have ALWAYS inflated faster than the economy around them. if they didnt, then we would still be able to afford to finance them for 2 years like we did in the '50s.
used car prices have been dropping because of the incentivised rush for new ones...nothing more.
using your math, the money i make 5 years from now will be 10% more than i make now...therefore, i can pay for the thing with the money i make later, leaving more money now for other things, like investments.
....again, not the time nor place to "discuss" personal finance strategies, etc... but I will respectfully disagree with you on your points directed at me... (with all due respect, your talking to another cpa). If it makes you feel better, I do understand your arguments...
Sorry host, back to our regular scheduled programming.
"...cars have ALWAYS inflated faster than the economy around them.
All I am going to say is that I went back to the buy sheets from my trusty major leasing company and our prices on vehicles like the Taurus, Impala, Intrepid, have been going down the past three years. But then, we don't buy Nissans.
The use of the Nissan Altima in an argument about vehicle pricing is flawed because Nissan repositioned this car a couple of years ago. It is now considered a higher end vehicle, and fills the space in Nissan's lineup where the Maxima once was, so it will naturally be more expensive than it was when it was a lower-end model.
how people claim car prices have been flat or decreasing? I see new car prices continuing to climb every year. New car prices have risen to where I now have to buy used cars. Many of my co-workers are in the similiar situation regarding their car purchases.
How can you or Nissan consider the Altima to be a higher end vehicle? It was and still is positioned against Accord and Camry. The Maxima fills the space in Nissan's line up where the Maxima once was or does Nissan consider it to be a Lexus contender now?
I don't buy Nissans. I have never understood what teh brand is all about. They are not as reliable as Tototas and the styling to me has been very dull. The Altimas that I drove as rental cars mid-90's were well, Taurus-like performance without a comfortable driver's seat.
In the last two years, the car has been upgraded substantially. In fact one of my college buddies bought one for his wife and I had no idea as to what model it was. I was bit suprised that it wasn't a 25k car.
Leo - the MSRPs seem to increase each year. However, what is going on with the OUT THE DOOR PRICING?? That's what counts - the price net of the rebates, allowances, free interest, and the "please take it off my hands" bribes that are available on all but the most popular models.
I think car prices will be flat to down in the next five years for a number of reasons. First, the "big three" as well as the imports are sourcing more of their content from low cost producers in China or in case of the "Big Three" forcing their suppliers to do so. It is not a big secret as there have been several articles in the WSJ about such practices.
Second, I think that Hyundai quality has improved enough that they are starting to put price pressures on other imports. I have had friends who used to buy Honda/Toyota who are migrating to Sonatas because of the distinct price difference. As I have said ad nauseum, a $5k difference in the acquisition price pays for a transmission or a blown engine with money to spare. And if it never happens, the price difference stays in your pocket. Personally, I am not quite ready to buy Hyundai but I don't mind driving them as rentals anymore.
And will Americans keep buying cars when the interest rates start rising next year???
I will respectfully defer to your experience and training in this regard but will comment on your reply to my own original comment.
"The old "if you don't borrow for a vehicle, you will have a lower credit rating." I would argue that people who continuously borrow to purchase vehicles on credit tend to have weaker financial positions."
First of all, I'm not advocating buying cars and rolling over ever-increasing amounts of negative equity. My point is this: A person who pays cash for everything and even those who use a credit card, but pay it off in full every month will have a lower credit score than someone who has a manageable total DTI and makes every payment on time each month.
It may be because of incomprehensible algorithm, but it is true. Again, the part you neglected to include in your reply is where I qualified my comments by saying that is getting a car loan or using a credit a good reason to simply get a good credit score? Perhaps not. But, the score doesn't know the interest you paid or how inflation affects the buying power of the dollar. Buying a car and using the 0% loan, paying $400/mo instead of yanking $25000 out of anything that's paying on average, say even 6%, makes a whole lot more sense to me.
my mother in law married a man she'd known for years back in 1996. He was very well to do, having been a supervisor with the railroad, and his wife (passed away in 1988) had kept his cards run up nicely, but kept all the bills paid.
My MIL, being of a conservative life (survived on $600 a month disability for 15-18 years), shut down all the department store and gas card accounts, and consolidated and paid off all the floating debt. They're down to 4 major cards with no balances, and a mortgage with a $20k balance (on a $150k house), and that's it - everything else gets paid by check - the tractor, the new garage, the new Sonoma, etc.
His beacon score dropped about 40 points since 1998...his credit is perfect, of course, but the lack of activity dropped him from a 721 to a 683. That's worth .5 to 1 point on most car loans...
I've talked to him about it, and they'll let a CC purchase ride for 2 months instead of one every now and then, plus look at opening 90 day same as cash accounts and letting them live for the 90 days to hit the bureau.
I, too, have gotten strongly into paying cash for ALL the small things - there'll be no charge accounts for a $1500 purchase - we'll save for 2 months and buy it. On cars, though, if I had the $30k to write a check, I wouldn't do it considering the awesome rates available these days, plus, I'm drawing 3.1% on 22 month CDs..
And that's the only point I was trying to make, which works a lot better with a real-life example.
What I can say is people who ALWAYS pay cash can easily say it doesn't matter what their score is. Because, really, what does it matter if they do pay cash? However, I can offer my own example of unintended consequences. I work in the insurance industry and we use "insurance scores" to help determine auto rates and in homeowner's insurance, the score is ONLY used to help people--those with good scores can waive a prior claim (and otherwise would be ineligible for coverage).
Anyway, the score is developed with a proprietary model and it isn't a "credit score" ala FICO or Beacon, but rather uses credit characteristics with a heavy bias toward prior claim activity. That said, credit IS still a factor and in auto insurance those with high scores can waive a ticket or accident or qualify for an additional discount. Our use of scoring in auto insurance is not terribly punitive, but it happens.
More often than not, we will encounter situations with elderly prospects (of the "always pay cash" philosophy) and despite being perfectly clear, will not qualify for the additional discount or maybe they have that fender bender and we can't waive it. I'm trying to start (and don't want to have) a debate on the virtues of scoring in insurance (email me, I can explain how we developed our model and the characteristics used that convinced me that it's NOT unfair to the poor, minorities or any person who perceives themselves to be of some targeted, slighted group) but rather to point out that this sort of modeling in general is, IMO, a big part of the future and a good credit score isn't just about being able to snag the Snazzmobile at 0%.
just because those of us on this board know better than to buy at sticker price, many people still do...therefore, MSRPs are valid measurements of a vehicles market position.
on used cars, wholesale buyers know what we know (and much more in terry's case), and DO take into account the incentives on the comparable new model to the one they are considering.
but let's look at another problem I've seen a bunch of times - Fred and Wilma are old school, old folks, usually paid cash, but when they did finance something, it was in Fred's name.
Fred died and there's Wilma, needing a new car, and has no credit, living on retirement, and doesn't want to use any cash reserves for a car purchase - she's stuck at that point. IF her name were on a couple of accounts, and IF they had a little bit of credit activity, she wouldn't have a problem.
debates. Like hearing various points and positions. If I had to do car payments, I'd try to keep them to three years or shorter. This should keep most people financial heathy, at least in respect to their cars.
thats a good idea, whether leasing OR financing. however, for most people, a 3 year note is not an affordable thing, and this is what i was alluding to yesterday when i spoke of the 1950's.
I paid my house off years ago. I haven't had a car loan since 1987 and that was an equity line I paid off in a year. I paid cash for a car in '92 and cash for my '02 Forrester. I have one Visa card and never carry a balance.
I'm just a middle class working guy who pays cash and my score is 795. They said they lowered my score because I'm good with money - no, they said it's because I don't owe anything.
isn't funny how the only people who really care about the beacon scores are those with less than prestine credit? Probably because they are more likely to borrow money.
DEARBORN, Mich. (Reuters) - Cars built in China's low-cost labor market could start pouring into the United States in large volumes by the end of this decade, a senior U.S. trade official said on Wednesday.
Al Warner, director of the Office of Automotive Affairs at the U.S. Department of Commerce, made the prediction in a Reuters interview after speaking about China to an auto industry conference in this Detroit suburb.
"I don't think you can argue with the low-end cost equation, Warner said.
In his speech he said that, with the exception of Honda Motor Co. (news - web sites) Ltd. (7267.T) and Hyundai Motor Co. Ltd. (005380.KS), global automakers lack the production capacity to meet fast-growing demand in China while also using it as an export base.
That could change rapidly, however, and Warner told Reuters "big numbers" of Chinese-built cars and trucks were likely to be selling on the U.S. market in "four or five years."
U.S. imports of Chinese auto parts have already surged more than 100 percent over the last three years to $2.8 billion in 2003, according to Warner.
In his speech he added that continued growth was inevitable, given "the cost pressures of the hyper-competitive U.S. market."
None of that is good news for the United Auto Workers (news - web sites), and UAW President Ron Gettelfinger made that clear at the Dearborn, Michigan, conference not long after Warner spoke.
The Detroit-based UAW, long considered one of the world's most powerful trade unions, has suffered steep declines in its membership in recent years as automakers shift manufacturing and other jobs overseas.
"No worker anywhere can compete with the painfully low wages and terrible working conditions endured by so many workers in China. And, as we all know, China is becoming a growing world power in the auto industry," Gettelfinger said.
"With a vast underpaid work force, China is fast becoming an export platform for the global automotive industry, sending billions of dollars worth of components to factories overseas. And it can't be very long before they begin sending fully assembled vehicles, as well," he said.
"Workers around the world are suffering from a global race to the bottom," Gettelfinger added, saying auto workers all over the world faced a serious threat from China and its "reservoir of repressed, low-cost labor."
Automotive News back in 1994 where a senior forklift operater at a GM plant made $42 an hour with 10 hours of overtime (an extra $630 a week) guaranteed, fully paid insurance, full pension, all the goodies, including free child care, gym memberships, and discounts at every place in town - he was complaining because he was going to have to pay $5 copays at medical and dental visits....
Excuse me, but since when does a forklift operater rate $120k a year? Hello??
My husband is a lead firefighter, at any given moment he may have to put his life on the line to save someone and he barely clears $70k/year (and that's only because we are at a remote base and he gets cost of living, base pay is $36k/year). We pay for health insurance, get no dental, and have to pay a co-pay that's more than $5.
If anyone deserves $120k/year its the rescue workers and police, not a dang forklift operator. Gotta love unions.
We have some *VERY* interesting UAW discussions is my family.
My father who was drafted into the US Army in 1951 while working for GM-Fisher Body (and a fork-lift operator) was militant anti-union as he hated the constant threats made toward him to slow down his pace of work. After his military service, he went to work for a non-union employer with an incentive program and retired with a large profit-sharing plan. My father encouraged us to find employers that could recognize and reward achievements and to be in a position where we could negotiate our own salaries.
My wife's uncles worked for one of the Chevy-Pontiac plants. They are now all retired. All their stories were about the schemes that they would pull on GM and what they could get away with.
My wife's cousins all work for Toyota's Georgetown or one of the Nissan plants. They all voted to remain non-union and love to harp on how LAZY all of the union workers are. They have no desire to have the UAW interfere in what they consider to be a sweet job.
Needless to say, there are some fun conversations. I try to do my darndest to call around the Columbus car rental agencies to score a Toyota or Nissan to get the old boys fuming.
Comments
Keep the "big picture" in focus...
Local/regional advertising costs passed on to dealers. They don't have as much (or even any) say in the ad budget as they do in their own programs. The invoice is their bill, and it can contain the cost of this advertising as well as the base auto. How much they are willing to sell the car for depends on many factors, this is just one of them. As stated previously, there is no magic about the "invoice". The only number a purchaser needs to worry about is the sales price as an out the door price, including any dealer doc fees, taxes, MV fees, etc. It is the leveler across all deals. Start trying to work with "invoice" + or - and you'll be comparing apples, oranges and tomatoes. Don't overthink the problem. How many $ each dealer wants to come out of your pocket for the car is all you need to know, not how or why they came to that number.
I am thinking about doing a Jolie and buying an Outback XT LTD. Invoice is 30K, MSRP is 33K. What I would do is offer 31K total out the door. m I do not care how that number is arrived at. I will write a check for 31 K and drive home.
The dealer will (probably) come back and counter about 34K out the door.
The point is, the dealers can always come up with new fees and such, some of which are pure profit. If you focus on out-the-door, then thier playing with the numbers will not impact you.
I have towed alot of boats from 30/38ft and weight up to 15,000lbs, so you gotta watch that tongue weight - and don't forget those brakes ... trailer guys are like boat dealers, they want to "over sell" the unit and leave the towing up to you, thats why you see so many boats on the wrong trailers and wonder why that 24ft Mako is sitting on the berm of the road and not at the Marina ..........
If you guys are going to do a 2/3 week trip with all the steep hills, curves, mountains, goofy drivers, rain, wind and that nut case driver that "almost" misses his exit but pulls in front of you instead, then make sure you know the actual trailer weight - "wet" .. not brochure weight or the guys opinion .. that means propane tanks, maserator, water, spare tire, blankets, extra fuel, furnace, air conditioner, food, clothes and extra options .. you would be "amazed" how 6,000lbs can mysteriously turn into 8,5/9,0/9,5lbs+ .. in Florida, we are mostly on flat ground, but it makes a "huge" difference when you take that 7 grade ride down from Flagstaff vs driving from Tampa to Orlando, so I would recommend that Hensley .......
Terry
Why does that matter? The car is either a good deal to you or it is not. It's a car in short supply? While you are micro-analyzing this to death, someone less anal will probably buy it.
My out the door price is going to be $600 under invoice. But which invoice? I can't make the offer unless I know what I want to take $600 off of."
Honestly, I don't get it. Bowke used a good example and the point is this: Which one is less at the end of the day? That is, who would get the smaller check? You could compare Dealer A who is telling you he is $1000 under invoice (great deal, maybe!), Dealer B tells you he is $500 under invoice. Gut check tells you A is better, but as you found out, maybe not. Since you apparently are only buying on the price (by your own admission the preferred vehicle is available for $144 more but you choose not to buy), what does it matter, really?
Dealer A could SAY he's $5000 below invoice, but the check he gets could still be more than B's invoice-$500. This is what the dealers are trying to tell you. It's irrelevant when a comparable is used. The only number that matters is the one you put on the check. And while your point about wanting to know what you're paying for is pretty valid, you don't know (yet, since you haven't seen the contract) that the dealer telling you he doesn't have them isn't instead charging a $250 services fee or a $200 doc fee or whatever. Those fees AREN'T on invoice. Now what? Back to square one.
If you sat and analyzed all this as carefully as you are with the ad fee, by the time you're done, you will need to research a different car. Find 2 comparable cars, and if the distance or service or nothing else matters, go with the guy who gets the smallest check, REGARDLESS of what he says it is under invoice.
We are looking at Forest River Surveyor, very nice lightweight trailer made for light duty pickups and SUV's. Will definatly have it weighed dry before we buy it and then watch our weights. The one we are looking at *should* have a wet weight of less than 6500 lbs. Can't be any worse than pulling a 5k lb horse trailer with a Mazda B4000 up and down the hills, no trailer brakes either.
From what I'm hearing on www.titantalk.com people are having good luck hauling up through the mountains with 8k+ behind the Titan. Tough little (big) truck.
We watched the Hensley video last night, definatly getting one!! Wow, even my hubby was impressed and he's very experienced with trailers.
Ok, just curious, what brake controller do you use? We are torn between the Prodigy and the Brakesmart.......about a $100 diff between the 2 and they are totally different from each other. ARGH, too much to think about!!!
I'm going to have to get the wiring on the truck fixed today and hope I don't back into anything. All hubby said is "well, it'll make you pay more attention now." Guess he knows from experience. hehehe
Ok, off to the dealer to get the Titan's quirks ironed out.
Thanks for the tips.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Of course I'm looking for the best price out the door, but isn't it nice to be familiar with the various things that are going to be thrown at you.
Just to clear one thing up: there IS NO $144. That was all hypothetical, I'm really not sure what the difference is going to be, I'll find that out when I shop again this weekend.
Its nice to have an idea what a 'fair' or a 'good' price is, and I think I have that, especially if these ad fees are legitimate.
if you use an OTD price, then the dealer can charge you a "belly-button fee" if he wants to...as long as he gets the # on your check correct.
would it be nice to know where every penny goes? sure.
but ive been doing this for 5 years, and i still havent got a clue...and i dont care to either. i promise that you will paralyze your brain by worrying about it.
His plan is to buy a camper next year, pay it off in one year, then buy a boat. When he has those 2 things he'll quit his side job.........which would make me a VERY happy wife.
Heck, if it meant driving the Titan for 10 years to get him to quit his side job I would. I worry so much when he's out falling trees for the logging operation he contracts with......that's his side job. He was almost killed in an accident 3 years ago, he's a very lucky guy to be still walking around.
This advice does not cover buying a house, because that is an appreciating asset.
On another topis: Yes, Driftracer, I am proud to see that I have contributed so much to the welfare of mankind that my name has become a verb. Soon I will be as well known as John Crapper, who, as we all know, invented the modern day toilet that we all enjoy so much.
If you can pay off one item at a time, you will build wealth slowly. Once you reach 40 yrs old, you should try to have a decent savings account or you will be doomed come retirement time.
Just my .02 Mark
I spent years buying $1k cars for cash, fixing, driving, selling, getting another... and when I did the math, in the end I should have just gotten a cheapo Civic hatchback, done the $180/month over 5 years and been done with it.
It all depends on how much time you have, what the car does for you... if you work 30 miles away in a nasty climate, a good car is an investment. Not in sheetmetal, but in your career.
Of course, I've only ever had one car loan...it's the one we have now. Owe $10k on an '03 Sienna, naught percent. I don't think I'll do it again, though.
-Mathias
This is not directed at our beloved Jolie. I don't think it's a good idea for a person who changes cars often and rolling debt into each new car is a good decision.
Not everyone can pay cash for a car and good reliable transportation is a necessity. On that note, a person should concentrate on one loan at a time and GET IT PAID off before going on to something new. Credit card debt should not be rolled over every month. Paying it off every month is ideal. Non-deductible interest EATS into your wallet.
I learned about compounding interest about 20 years ago when I started taking care of my great aunt. Over her lifetime she never made a lot of money but saved regularly and took a European trip almost every year to see relatives. I would do all of her bill paying, etc. I noticed that she had one particular 5 year CD in the early 80's earning 14% interest. She never added to that CD and let it roll over at renewal. A $37,000 CD turned into almost $90,000 after about 10 years. I had to put her into a retirement home when she was 95 and she lived to be almost a 101. Thank goodness she saved her money because at $4,000 a month, it can go fast.
Mark
As for savings we have it. Plus my husband has a HUGE retirement account in addition to any retirement that comes with his job. We aren't broke by any means, although sometimes it feels like it!! By the time my husband retires in 19 years we will have a house where we want to retire paid for, plus all our toys paid for.....the toys we currently have are paid for.
We sold our horses and horse trailer because the dang horses were a money pit. We were spending $3k/year EACH in feed/vet/farrier and we had 4......you do the math. Now we are concentrating on getting a few small toys, a camper and boat mainly. I think we are done trading cars for a while.......that is if we want toys.
You guys just need to keep me on the straight and narrow!! LOL
Certainly, paying non-deductible interest is not the best thing to do. However, while it should not be the only factor, the effect of "not using credit" on your credit score is an issue. Perhaps some people will say to themselves, it doesn't matter what my score is, since I will never use credit anyway. The problem is, if/when/hell freezes over/whatever, and you do need credit, a person's score may be dramatically lower than it might be--because there is no installment loan history and other factors, like paying the card off in full each month to some extent actually hurts a score.
Are those good reasons to NOT pay your credit card in full if you have the means or to buy a car with cash if you're able? No, probably not. But it also means a person might want to take advantage of 0% car loans, to provide that history and prompt payment of a loan for the full term helps a score more than anything.
Just food for thought.
to compound things, the car depreciates at the same time.
example:
a 2005 nissan altima can be had at around $20k.
the 2010 model will probably be in the $25k range, based on history. by paying cash, you not only drop your money into a depreciating asset, you also let someone else keep the inflation.
although quick, easy, convenient, and ego-boosting, paying cash is only an advantage emotionally.
Tornado - The old "if you don't borrow for a vehicle, you will have a lower credit rating." I would argue that people who continuously borrow to purchase vehicles on credit tend to have weaker financial positions.
Personally, I don't worry too much about credit ratings ... unless someone is borrowing from me. If I need a vehicle or another house, I have the resources to self finance.
As a CPA, I donate some time each year to help people out of the financial messes that they themselves create. When I started doing this, my gut told me that the people that I would be seeing wold have incomes less than $30k who were overwhelmed by a major uninsured medical event. No, what I am seeing more of are 20 and 30 somethings who bought more house that they could afford and add two large car payments and other toys.
You can get a great credit rating by paying off a small credit card and staying out of the car financing market.
Bowke - using the present value analysis that you are using is inappropriate and misleading.
First, you assume that a Nissan Altima will inflate a full 25% in five years. If anything, the trend in car prices have been DEFLATIONARY for several years. Prices on used cars have been dropping until recently while rebates and markdowns have been the norm for the last four or five years on most but the most popular models.
Most economic research that I pay dearly for tends to lead me to believe that future inflation will be in the area of 2%. Now, if we return to the days of say, the Weimar Republic in 1931, your argument would have a great deal of validity. And we would be paid two or three times daily.
BUTCH - the old "my money will do better somewhere else argument" That is a good one. I can remember back in April 2000 when I walked into my Smith Barney broker and asked him for a check to pay off my 8% mortgage. Have you ever seen a guy in a $500+ suit grovel?? "I beg you PLEASE, PLEASE don't take money out of your account to pay off your mortgage. You are making 20%+ on those funds for the past 3 years. Why do you want to pay off your mortgage and save ONLY 8%?"
Personally, when I head to the dealership, I am looking to buy a car where someone else has taken the haircut on the depreciation. In financing a vehicle, I find that I am less willing to spend a lot when I have to write that check. Any salesman worthy of the title knows that it is a lot easier to sell a vehicle for $300 a month for 48 month than to sell one for $8000. I sign checks over $1 million for business, but it is painful to write a check for $10k, especially for something like a car that is going to drop in value like a rock.
no, not at all. the MSRP of an altima GXE in 2000 was ~$16600. the 2005 2.5S is ~$20380. do the math...cars have ALWAYS inflated faster than the economy around them. if they didnt, then we would still be able to afford to finance them for 2 years like we did in the '50s.
used car prices have been dropping because of the incentivised rush for new ones...nothing more.
using your math, the money i make 5 years from now will be 10% more than i make now...therefore, i can pay for the thing with the money i make later, leaving more money now for other things, like investments.
wow! you made my case for me!
Sorry host, back to our regular scheduled programming.
used car prices have been dropping because of the incentivised rush for new ones..."
Explain to me how "incentivising" is any different from deflation. Of course, the MSRP has risen... and so has content.
In the end, I would argue that car prices have been flat or heading down (real money) over the last 5 years.
"not a CPA" but good at math, I remain,
-Mathias
All I am going to say is that I went back to the buy sheets from my trusty major leasing company and our prices on vehicles like the Taurus, Impala, Intrepid, have been going down the past three years. But then, we don't buy Nissans.
Near as I can figure, cars have been flat for the past 5 years.
Big domestic sedans have gone down, esp. the Taurus, which hasn't had a major redesign in nearly a decade.
-Mathias
Car_man
Host
Smart Shoppers Message Board
Must be bad at math,
Leo
In the last two years, the car has been upgraded substantially. In fact one of my college buddies bought one for his wife and I had no idea as to what model it was. I was bit suprised that it wasn't a 25k car.
Leo - the MSRPs seem to increase each year. However, what is going on with the OUT THE DOOR PRICING?? That's what counts - the price net of the rebates, allowances, free interest, and the "please take it off my hands" bribes that are available on all but the most popular models.
I think car prices will be flat to down in the next five years for a number of reasons. First, the "big three" as well as the imports are sourcing more of their content from low cost producers in China or in case of the "Big Three" forcing their suppliers to do so. It is not a big secret as there have been several articles in the WSJ about such practices.
Second, I think that Hyundai quality has improved enough that they are starting to put price pressures on other imports. I have had friends who used to buy Honda/Toyota who are migrating to Sonatas because of the distinct price difference. As I have said ad nauseum, a $5k difference in the acquisition price pays for a transmission or a blown engine with money to spare. And if it never happens, the price difference stays in your pocket. Personally, I am not quite ready to buy Hyundai but I don't mind driving them as rentals anymore.
And will Americans keep buying cars when the interest rates start rising next year???
"The old "if you don't borrow for a vehicle, you will have a lower credit rating." I would argue that people who continuously borrow to purchase vehicles on credit tend to have weaker financial positions."
First of all, I'm not advocating buying cars and rolling over ever-increasing amounts of negative equity. My point is this: A person who pays cash for everything and even those who use a credit card, but pay it off in full every month will have a lower credit score than someone who has a manageable total DTI and makes every payment on time each month.
It may be because of incomprehensible algorithm, but it is true. Again, the part you neglected to include in your reply is where I qualified my comments by saying that is getting a car loan or using a credit a good reason to simply get a good credit score? Perhaps not. But, the score doesn't know the interest you paid or how inflation affects the buying power of the dollar. Buying a car and using the 0% loan, paying $400/mo instead of yanking $25000 out of anything that's paying on average, say even 6%, makes a whole lot more sense to me.
My MIL, being of a conservative life (survived on $600 a month disability for 15-18 years), shut down all the department store and gas card accounts, and consolidated and paid off all the floating debt. They're down to 4 major cards with no balances, and a mortgage with a $20k balance (on a $150k house), and that's it - everything else gets paid by check - the tractor, the new garage, the new Sonoma, etc.
His beacon score dropped about 40 points since 1998...his credit is perfect, of course, but the lack of activity dropped him from a 721 to a 683. That's worth .5 to 1 point on most car loans...
I've talked to him about it, and they'll let a CC purchase ride for 2 months instead of one every now and then, plus look at opening 90 day same as cash accounts and letting them live for the 90 days to hit the bureau.
I, too, have gotten strongly into paying cash for ALL the small things - there'll be no charge accounts for a $1500 purchase - we'll save for 2 months and buy it. On cars, though, if I had the $30k to write a check, I wouldn't do it considering the awesome rates available these days, plus, I'm drawing 3.1% on 22 month CDs..
What I can say is people who ALWAYS pay cash can easily say it doesn't matter what their score is. Because, really, what does it matter if they do pay cash? However, I can offer my own example of unintended consequences. I work in the insurance industry and we use "insurance scores" to help determine auto rates and in homeowner's insurance, the score is ONLY used to help people--those with good scores can waive a prior claim (and otherwise would be ineligible for coverage).
Anyway, the score is developed with a proprietary model and it isn't a "credit score" ala FICO or Beacon, but rather uses credit characteristics with a heavy bias toward prior claim activity. That said, credit IS still a factor and in auto insurance those with high scores can waive a ticket or accident or qualify for an additional discount. Our use of scoring in auto insurance is not terribly punitive, but it happens.
More often than not, we will encounter situations with elderly prospects (of the "always pay cash" philosophy) and despite being perfectly clear, will not qualify for the additional discount or maybe they have that fender bender and we can't waive it. I'm trying to start (and don't want to have) a debate on the virtues of scoring in insurance (email me, I can explain how we developed our model and the characteristics used that convinced me that it's NOT unfair to the poor, minorities or any person who perceives themselves to be of some targeted, slighted group) but rather to point out that this sort of modeling in general is, IMO, a big part of the future and a good credit score isn't just about being able to snag the Snazzmobile at 0%.
on used cars, wholesale buyers know what we know (and much more in terry's case), and DO take into account the incentives on the comparable new model to the one they are considering.
Fred died and there's Wilma, needing a new car, and has no credit, living on retirement, and doesn't want to use any cash reserves for a car purchase - she's stuck at that point. IF her name were on a couple of accounts, and IF they had a little bit of credit activity, she wouldn't have a problem.
Leo
I'm just a middle class working guy who pays cash and my score is 795. They said they lowered my score because I'm good with money - no, they said it's because I don't owe anything.
Why does everyone want to loan me money?
beachfish
I have no debt either, house is paid for etc. Use AMEX and Visa but pay in full every month.
Lst time I looked, my beacon was 812. If It were to drop 50 points, I wouldn't care.
Al Warner, director of the Office of Automotive Affairs at the U.S. Department of Commerce, made the prediction in a Reuters interview after speaking about China to an auto industry conference in this Detroit suburb.
"I don't think you can argue with the low-end cost equation, Warner said.
In his speech he said that, with the exception of Honda Motor Co. (news - web sites) Ltd. (7267.T) and Hyundai Motor Co. Ltd. (005380.KS), global automakers lack the production capacity to meet fast-growing demand in China while also using it as an export base.
That could change rapidly, however, and Warner told Reuters "big numbers" of Chinese-built cars and trucks were likely to be selling on the U.S. market in "four or five years."
U.S. imports of Chinese auto parts have already surged more than 100 percent over the last three years to $2.8 billion in 2003, according to Warner.
In his speech he added that continued growth was inevitable, given "the cost pressures of the hyper-competitive U.S. market."
None of that is good news for the United Auto Workers (news - web sites), and UAW President Ron Gettelfinger made that clear at the Dearborn, Michigan, conference not long after Warner spoke.
The Detroit-based UAW, long considered one of the world's most powerful trade unions, has suffered steep declines in its membership in recent years as automakers shift manufacturing and other jobs overseas.
"No worker anywhere can compete with the painfully low wages and terrible working conditions endured by so many workers in China. And, as we all know, China is becoming a growing world power in the auto industry," Gettelfinger said.
"With a vast underpaid work force, China is fast becoming an export platform for the global automotive industry, sending billions of dollars worth of components to factories overseas. And it can't be very long before they begin sending fully assembled vehicles, as well," he said.
"Workers around the world are suffering from a global race to the bottom," Gettelfinger added, saying auto workers all over the world faced a serious threat from China and its "reservoir of repressed, low-cost labor."
They are themselves killing the US auto industry!
Look at how well the non union Honda and Toyota plants work in the US. High quality cars and trucks.
Sometime in the not too distant future there will be a day of reckoning for the UAW and the Big 3. One of them won't survive.
Excuse me, but since when does a forklift operater rate $120k a year? Hello??
If anyone deserves $120k/year its the rescue workers and police, not a dang forklift operator. Gotta love unions.
My father who was drafted into the US Army in 1951 while working for GM-Fisher Body (and a fork-lift operator) was militant anti-union as he hated the constant threats made toward him to slow down his pace of work. After his military service, he went to work for a non-union employer with an incentive program and retired with a large profit-sharing plan. My father encouraged us to find employers that could recognize and reward achievements and to be in a position where we could negotiate our own salaries.
My wife's uncles worked for one of the Chevy-Pontiac plants. They are now all retired. All their stories were about the schemes that they would pull on GM and what they could get away with.
My wife's cousins all work for Toyota's Georgetown or one of the Nissan plants. They all voted to remain non-union and love to harp on how LAZY all of the union workers are. They have no desire to have the UAW interfere in what they consider to be a sweet job.
Needless to say, there are some fun conversations. I try to do my darndest to call around the Columbus car rental agencies to score a Toyota or Nissan to get the old boys fuming.