Finance – How To Beat The Auto Dealers

Finance. Pretty broad term. If you look up the word finance in the dictionary you will find the following definitions.

Noun

1. The science of the management of money and other assets. 2. The management of money, banking, investments, and credit. 3. finances Monetary resources; funds, especially those of a government or corporate body. 4. The supplying of funds or capital.

Verb

1. To provide or raise the funds or capital for: financed a new car. 2. To supply funds to: financing a daughter through law school. 3. To furnish credit to.

Certainly more than enough material to cover. An associate of mine in the early years of his career after graduating college with a finance degree spent a good number of years in this field. He certainly has a wealth of knowledge to share on a variety of financial topics. So in this first of a 3 part series he is going to enlighten you on the verb side of this equation. More specifically definition number 1. To provide or raise the funds or capital for. Like financing that brand new car of yours. He offers this observation and advice.

Financing anything can be a costly proposition especially if you don’t know what you’re doing. This is especially prevalent in one area especially, financing a new car.

Rather than bore you with a lot of information that you don’t need I am going to provide you with what information you DO need so that when going to finance that brand new luxury sedan it doesn’t end up costing you a fortune.

1. The first thing you have to do is determine your financial situation. How much can you afford to pay each month? Financing a car is a long term proposition. Most new car loans run for about 60 months, or 5 years. That’s 5 years of your life that you need to be prepared to meet a financial obligation or your car ends up repossessed So don’t finance a payment that is more than what you can afford each month.

2. Decide what car you want and what you’d be willing to accept. Maybe you want that new Lexus but at $1200 a month financing it’s just way beyond your means. Maybe that $500 a month Chrysler is more in your pocket book range. Sometimes we have to settle for what we can afford. Remember, a car is a means of transportation. You spend less time in your car than in your place of employment or your home. Maybe you just want to get something that will get you to where you want to go.

3. Do your homework. There are a boat load of car dealerships out there. Don’t just settle for the first one you see. Shop around. Compare prices of competing dealers. Many times if you bring an ad in from a dealer that is offering the car you want for less money you can get an even better deal from the second dealership. Don’t worry. Everybody does it.

4. Don’t settle for the rate the dealer gives you when financing your car. Ask him what the buy rate is from the finance company. If you think that rate is too high tell him you want him to try another finance company. If you’re still not happy with the rate then try your local bank. Many times you can get a better rate just by looking around.

5. Don’t let the dealer load you up with things you don’t need like a tow package, undercoating, rust proofing and a lot of other junk. This will just add to the price of the car and the amount being financed.

6. Put down as much as you can afford. This will lower the amount financed and therefore lower your monthly payments.

If you follow these simple 6 steps you will find that you end up leaving the dealership with a monthly payment you can live with.

Financing – A Must For Growth

Financing means getting financial support from financial institutions. A start up company or a company, which has been in existence, requires on going finance. Some companies to run the day-to-day operations require financial support. Some companies also require financing to expand their services and create more branches and develop.

The rate of interest for financing is pretty high and financing institutions like banks provide loans to the business owners. The borrowed money and interest amount are repaid in installments. While financing you should be very careful as the amount borrowed and the amount you will repay will not be the same, as you need to pay along with the interest rate, which could be 15% -20%. Suppose, you go for a loan for 100,000 dollars, then the amount repayable would be 125,000, but the best part is you can repay in installments over a period of time.

While financing you need to check the interest rates, monthly repayable amount, finance terms and the repayment term. You should first evaluate the amount of money required for financing and also look at returns that would be generated from the investment. You should also calculate and find in how many years the investment would generate profits for the company. The loan amount should be adequate and it should help in growth.

The banks or financial institutions, which provide financing facilities, get the financed amount back in installments including the interest rates. The banks or financial institutions make profits and they normally finance with some fixed assets as collateral. A collateral is a guarantee that the person would repay the borrowed amount and in case if the person does not repay the borrowed amount on time, then the lenders have the right to sell the collateral.

For small business owners, the government provides financing schemes, which helps in promoting, small and medium sized businesses. The small and medium sized businesses also get loans from U.S. Small Business Administration (SBA) and the financing schemes are easy and flexible. In fact it is easier to get a loan from U.S. Small Business Administration schemes than getting a loan from banks and other financial institutions. If you apply for Small Business Loan program then the SBA would stand as security for the borrower.

One other financing option is equity financing from family, employees etc who will be provided with shares of the company in exchange for money. A company can also consider financing in the form of venture capital. The venture capitalist invests in the company and takes a risk if they feel the company would grow and provide adequate returns. Financing through venture capitalists is a difficult task and there are many strict guidelines to be followed by the management and proper accounting procedures have to be followed. Venture capitalists would also be part of the management and while taking decisions their role has to be kept in mind.

Getting a venture capitalist for financing your projects would be a very difficult task as they only finance where they can see tremendous growth opportunities and returns. There are many financing options through which you can develop your company. It is left up to the businessperson to choose the right finance option.