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  • Ronnie Haskins

PLANNING YOUR DREAM CAR

Today I’m talking to you about steps to planning your dream car. I've been thinking a lot about this. As a matter of fact, on my way to work today I was thinking about what I believe is important for people. People have heard me say that you don't need a dream car. Sometimes people look back at me and they're like “hmm, but I want to dream car”. So let’s talk about how to PLAN your next dream car instead of me telling people that you don't NEED a dream car...because as someone told me today, I'm not everybody's Dad. In the end, the choice is yours, you are able to do things the way you want to do them, and when you want to do them. How can I help add value to your life when it comes to this elusive dream car? What I can do is to improve your financial future and I use the auto industry to do that.


I've been doing this for 23 years. I have been selling cars and growing my business for the last 20 years here in Colorado Springs. My goal is to help you make good decisions about buying cars... buying that dream car, that vacation car, and doing it the right way. Cars impact your life for quite some time and your pocketbook.



DO NOT PURCHASE A CAR IMPULSIVELY


The first thing I would tell you is to not do it impulsively. Purchasing a car is the second largest purchase we make in our life. So many people purchase a car within the span of four hours. Within about four hours they go to a dealership...pick out a car...pick out a color, and before you know it, are driving home and posting on Facebook that they got their dream car. I would urge you to put some thought into it.


As you're looking at your car in the snow today and you're complaining that it's too cold and doesn’t have heated seats, start jotting those things down. Plan what you want in your next car. That way we can start looking at how much that stuff is going to cost you and we can budget for it. Remember that the first thing NOT to do is do this impulsively. Make sure there's some thought that goes into it, and that way when you make that decision and pull that trigger you'll feel really good about it.


Most people purchase a car from inception of the thought in their mind to completing the transaction in 72 real hours. Let’s think about that as your baseline. 72 hours is the normal industry-wide time that people think about buying a car and they're in that new car within 72 hours. I want you to think about this for at least two weeks. So for 14 days let's think about this, and let's write down these notes to help us in this major purchase.



LOOK AT YOUR BUDGET


Look at your budget. I'm letting that sink in... look at your budget guys. We are all restricted to a budget whether we like it or we don't like it. We don't want to end up with more month than money. We don't want to run out of money before the end of the month. If you don't have a budget, make one.


You're going to need some tools to figure out exactly what this dream car is going to cost you. Here's a good example… I have a $30,000 car with zero money down and that car is financed over 72 months. That's six years. The payment on that is $516.99 at four percent interest. That's including all the taxes, everything.


So if you're thinking in your mind that you want to get a sport-utility for about $30,000... when you go to the dealership, and make that purchase, your number should be around $500 month. Think about that. Does that fit into your budget? When you look at saving for the kids... putting money away... every month buying groceries...gas, electric bill… paying the mortgage… life insurance… every detail of your life needs to be planned out.


I want to help you with your budget! I had a client last week that was talking to me about their car that they've enjoyed no payments on for about two years. However, when they showed up here she had some repair bills that she shared with me. She said she wanted to keep this car that she had no payments on, but just put $3,500 into this car to keep it running and maintain it. She hadn’t had a payment, but let's divide that $3500 repair cost by 12 months. So we put 3,500 in the calculator divided by 12 and that equals $291.67. So in reality she has not had a car without a payment because she's had to maintain it… she's had to service it to keep it running.


All of us just don't like to think about things that aren't in front of us. If it's not a bill that's being sent to you in the mail that doesn't mean that you're not paying on it every month in some form or fashion. Tires cost money, brakes cost money, alignments...we hit potholes and have to get that fixed. Start keeping track of those things so you can estimate how much you're spending on your current car every year. If you don't have a budget I urge you to make one so that way you don't break that budget when you purchase this dream car that we're talking about.



SEPARATE YOUR WANTS VERSUS YOUR NEEDS


Let's get into the fun stuff. You've heard me talk about this before...wants versus needs. Why do we need leather in the car but we only want to retire one day? Don't let this dream car crush your other dreams that you have in your life. If the dream car is taking away from your vacation, that you've been planning for two years, then we need to reassess the budget. We may be looking at something that's a little bit more expensive than we should be. Because it's taking away from things! This one dream will just push all the other dreams out… you do it impulsively, and then you're stuck with it for five years.


Decide your wants versus your likes. We can call that a fun thing by calling it desired equipment. People want to know what they should have in their next car and I like to ask them, “What do you like about the car you're driving right now?” (Hopefully your answer isn't nothing! That's a bad place to be.) but think about that. What do I like about my current car? I like that it has enough room for the kids… I like that it has a third seat… I like that it has all-wheel drive… I like that it has a backup camera.


Then think about what you're missing. Things in your mind that would make your life better. Things that you find yourself complaining about quite often. For me, my old suburban that I have to pull my camper… I wish it had a backup camera. That thing is so big, and the next truck or SUV that we purchase, (which is probably five or six years down the line) I'm going to make sure it has a backup camera. So think about that and then write those things down.



THINK ABOUT HOW THIS PURCHASE IMPACTS YOU


Think about how this purchase impacts you over the next five years. We go out and purchase cars on a Saturday with reckless abandon. We have no idea how this payment is going to dictate our life for the next five years. You heard me say it earlier… that $30,000 car for six years, that’s $516.99 per month. If you multiply $516.99 by seventy two it equals $37,223. So you're paying about $4100 in interest over the life of the loan of that car. This will impact your life. You may be able to afford that $516 a month today, but you have to be able to forecast what your life's going look like for the next five years. Cars are a major purchase, and they should be looked upon the same as a house purchase, but people typically make them like a cell phone purchase. So I urge you to think about how it's going to affect you and make sure you don't get uncomfortable during that thought process when you're thinking $516 a month.



Change your thinking about how you're looking at your next dream car. We can do dream cars… we just need to plan.



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