WSJ Chapter 7 Essays Examples
The article featured tips on purchasing an automobile. It even included the best deals in financing and negotiation. It tackled the buyer’s preparedness. Moreover, he must be aware that a car dealership is a business that is also looking to close high accounts. Certainly, many people are still clueless in making big purchases such as a car or a house. Such purchases have similar financial demands. Through this article, we would be able to guide people in making smarter choices.
When making big purchases, a car in this case, one has to be smart in such a way that he has done his homework about the offers. This is a must before visiting dealerships. It is important to note that it is business and they make money through up charging. The salespeople would ask how the buyer would be able to pay for the car. From here, they would introduce their financing. With this, a buyer must not be swayed on what the salesperson would attempt to add in the negotiation, especially the frills.
The next consideration is price purchase negotiation. The tips that the article has given include avoiding leasing, being open to certified pre-owned cars, estimating future loans, and assessing all possible sources of money. Leasing is not advisable since it always demands payments even after the expiration. Certified pre-owned cars, on the other hand, is one of the smart options. This is because technically such cars are used. Thus, the value has dropped at least to 18%, requiring less money. Yet, since these cars are still certified, they have been checked, fixed, and backed with warranty just like the new cars.
The remaining points to consider go back the buyer’s personal finances. A buyer has to know if he has the capacity to purchase and maintain a car. One way to know is if he would still be able to live the lifestyle he wanted even after purchasing the car. This is achievable when a buyer dedicates only 20% of his disposable income. This means that he has to pay living expenses and debts first. Only then would he take one-fifth of the remaining fnds for the car purchase. This method is expected to cover the purchase, including the insurance and fuel expense. Otherwise, he would sink in more debt.
Other than this, the buyer must also decide on the payment term. Basically, the longer the term, the more interest payment there is despite lower monthly payment. The recommended term is five years and below. In case the payment is still high at five-year term, the car is likely beyond the buyer’s financial capability.This is not to undermine the buyer. This is more of taking caution. This is because apparently, there are buyers who consider putting in all other sources of money such as retirement savings. This is definitely not recommended. Such financial instruments exist for a reason. Retirement savings is obviously for daily expenses upon retirement. When a buyer gambles this, he would have difficulty at the time of its appropriate use.
The last point is finding the best loan and deals. The article shared that the best deals can be found in credit unions. They are banks that are nonprofit and exclusive for members. The perks of being a member include lower cost loan offers. When it comes to shopping for the right prices the end of the month is the best time since salespeople are likely chasing cut-offs. Cars that are being replaced or discontinued are also likely at affordable prices. These are old card models and have of course passed their prime value.The points shared on the article are comparable to everyday money decisions. Whenever we go to groceries or malls, for example, we would always want discounts to be able to afford things and more through what we have. The same process must be applied in big purchases. We have to be smart on our finances. It would be one less complicated problem to deal with.