Ride or Die

Investing in a Car
Congratulations! Your car pulled through a whopping four years, and then some. Sure you’ve dinged it and banged it until you’re almost glad to see it go, but who has the kind of money it takes to buy a car these days? But you’re screwed six ways 'til Sunday. Your friends singing Adam Sandler’s “Piece of Shit Car” when they hop in just isn’t funny anymore. You need a car, and that’s that. Before you head to the dealership, here’s what you need to know.

Of all the investments you could possibly make now or in the future, a car is the absolute worst one out there. Why? Good investments accumulate value—you start with an initial investment, and it grows from there. Cars don’t work that way. In the instant you drive your shiny new ride off the lot, it declines 20% in value. As far as investments go, it doesn’t get much worse than that.

Fortunately, you have options. And with all of those other amazing things to do with your money out there (pay off your credit cards, save for retirement, pay down your student loan balance), it would be smart, smart, smart to avoid overspending on transportation. For that reason, here are a few ideas for you to make sure this puts minimal strain on your shiny black patent clutch.

Ain’t Nothin’ but a Green Thang
If you live in a big city, you should seriously consider the mass transit options. Now, mostly because of the initiatives towards the “Green” movement, there are numerous available alternatives. Go to http://www.publictransportation.org/ and see what systems are available in your community.

Can You Pay My Bills? Can You Pay My Automo-bills?
While lease payments are often less per month than loan payments associated with buying a car outright, a car lease is one of the most foolish commitments you can make. Don’t be deceived-- However luxurious having the option of driving a new car every few years may seem, it’s going to be more expensive in the long run. Plain and simple: You. cannot. afford. it.
Here’s why:

At the end of your lease term, you have a few crummy options:

1. Purchase the car for a “discounted” price, which is usually higher than the actual value of the car (especially when you lump in the lease payments you’ve made)
2. Turn over the previously leased car and lease another (a vicious cycle in which lease payments never end and you never have an asset to show for it)
3. Buy another car

If you resort to either of the last two options, keep in mind that there is no way in the world you’re going to get the trade-in value you want. Car companies have it worked down to a science—they’ll get as much out of you as possible.
Two things to keep in mind:Every little scratch counts: Any little blemish or imperfection on the body of your car is going to cause the trade-in amount to decline.
You’re only allotted to put a certain number of miles on the odometer each year-- Go over that number, and be prepared to empty your piggy bank

.…which is why you should consider taking out a loan and buying car in the first place. After a few years of paying down your car loan, you actually have something to show for it, and don’t have to negotiate through the gimmicks with a car salesman.

A New Car!
You’ve perused the mass transit options, and none of them will work. You’ve realized you’d rather walk 500 miles in a pair of Jimmy Choos than sign a car lease. It is officially time to buy a car.

Something New, Something Used
You’re not going to like this, but hear it out. Purchasing a new car instead of a used car makes zero sense. Remember how it was mentioned that car’s value declines 20% just by driving it off of the sales lot? Apply that logic, and take advantage of it. The misfortune of the gal who wasted her money on the new car can turn into one heck of a discount for you. And with all of the car companies focusing on selling “gently used” cars lately, it’s not tough to find a “new used” car. Your goal: find one that’s 2 years old (or younger) and has no more than 10,000 miles on the odometer, and put the money you save to use elsewhere.

The “Loan” Ranger
While the dealer selling you the car will likely want to provide you with financing, it’s not a bad idea to check out your options outside of the dealership. You can get a car loan at a number of websites such as http://www.eloan.com/ and http://www.lendingtree.com/, or contact banks and credit unions to see what kind of interest rates you can get.

Covering Your Ass(et)
Buying a used car can be scary. But to calm your fears, here is a list of things you can do to put the kebosh on anyone screwing you out of your hard-earned money.

1. Purchase a “Certified Pre-Owned car”: They’re used cars in such great shape that the dealer is willing to sell it with a warranty.
2. Request the car’s inspection from the dealer.
3. Hire a mechanic. Get him to inspect the car before you purchase it.
4. Go to http://www.carfax.com/ and get a report on the car’s history



great advice pulled from Chiconomics 101: http://www.chiconomics101.com/ Check her out!