Time for new wheels?

Buying a car is exciting, but it can also be a stressful and expensive headache. In fact, for most people, buying a car is the third most expensive personal transaction they'll ever be involved in (after a house and an education). To lessen the stress and expense, follow these CINCO Steps:

1) Choose a car you can afford

Whether you decide to buy a new or a used car, it's important to do your homework. Sure, a new Series 5 BMW is sweet but can you really afford it? You may be able to afford the monthly payment, but you also have to factor in taxes, title, insurance, gas (does it take premium or regular?), repair costs, etc. Having a BMW sitting in your driveway because you can’t afford to drive it defeats the purpose of owning a BMW.

You can learn about the costs of operating a car and its reliability by examining the gas mileage information on the sticker and visiting web sites that review cars.

And make sure you check with your insurance agent to learn what your insurance premiums will be. When you take everything into account – car payments, maintenance, gas, and insurance – try to limit the total auto expense to 10% or 15% of your monthly income.

Helpful hint #1: Do not go car shopping alone. Bring a friend or family member who lacks any interest in the car in order to stop you from paying too much and help you stay on track. Maybe you can give them a stick to whack you on the hand if you start to sign anything.

Helpful hint #2: Buying at the right time is important, especially for new cars. At the end of the year, dealers just want the cars off their lot. At the same time, there's rarely such a thing as a "one-time" or "today only" offer.

Helpful Hint #3: See if CINCO has any repo cars If you want to find a great deal on a late-model used car, ask CINCO if we have any repossessed cars. From time to time, CINCO will have repo cars available. Contact our collections department to see what we have available at 513.281.9988.

2) The new or used decision

This is a matter of personal preference and what you can afford. New cars are nice and come with a factory warranty, but they're also a lot more expensive.

If you're considering a used car, do some extra internet homework on the model you are considering. There are owner forums for just about every car, and you can quickly learn about common problems, fixes, and upgrades.

When you get serious about a certain car, have a qualified mechanic inspect the car (this usually runs around $60 - $100) and get a Vehicle History Report from one of the websites that provide them like www.carfax.com. For around $35, you'll find out if the car was ever stolen, wrecked, salvaged or recalled (you can get 5 reports for $45 if you're still shopping around). The report will also provide information on the number of previous owners, whether it ever failed an inspection, or if someone tried to modify the odometer. Spending a little extra cash on an inspection and a Carfax report will save a lot money in the long run.

Helpful Hint: A new car loses 60% of its value in the first four years. If you are really interested in a new car and you are financing the vehicle, consider GAPP insurance.

3) Negotiate the purchase price -- but be willing to walk away

Who pays sticker price for cars anymore? This can be a stressful part of the car buying process, but if you do your homework and you are prepared before you walk into a dealership, negotiating can be fun.

When you are ready to buy, you should come armed with facts. If you are trading in a car, keep this discussion separate along with any discussion about financing. Focus on the car purchase price only. Do not be afraid to walk out and go to another dealer if you cannot get the price you want.

4) Paying for the car

There are several options for how to pay for your car. Of course, if you have the cash to pay for the car up front, you can avoid any interest expense.

But for the rest of us, the most common way to pay for a car is to make a down payment and finance the rest. The terms usually vary from 24 to 72 months with most people choosing loans from 48 months to 60 months. Unless you are planning to use financing from the dealer, it's best to secure preapproved financing from CINCO before you walk into the dealership. That will be one less thing to distract and confuse you and will help you stay within your budget.

Helpful Hint: Don't let a salesperson check your credit report unless you've gotten an offer that you're serious about signing. Frequent inquiries into your credit report can lower your score. Instead, get your credit report yourself (which won't affect your score) and bring it in with you to get an estimated finance rate.

5) Watch out for the extras

Many dealers have Finance and Insurance salespeople who will try to sell you extra items you don't need. (The "F&I Guy" is often the person you are sent to after making the initial "deal" with your salesperson. They finish your transaction and try to sell you additional services and merchandise. They are generally very aggressive and persuasive.) Services like rust proofing, fabric protection, and pinstriping have a value that is questionable at best, and extended warranties and the like are generally much less expensive when purchased separately. Read everything that you have to sign, and make sure the numbers match what you agreed to.

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