The other day, my mom called me up from New Jersey and she was shopping for a car. She told me over the phone what she thought was she could afford on a monthly basis for a payment. That’s when I stopped her and said, “Never tell the dealership what you want your monthly payment to be when you negotiate a car price.” If you talk about monthly payments at the car dealer, that is when you get yourself in a trap. You always want to negotiate the price of the car. Once you negotiate the price, then you can really talk about the financing rate. You can always know what the financing rate is by looking at some simple calculations. Generally you want to know n, which is a number of months that you’re going to make the payment. You will know the price of the car which is your present value. You know the future value of the care will be zero, technically speaking, when the car is paid off. If you can get the dealership to tell you what the interest rate will be on your loan, you can calculate your monthly payment as easily as the dealership can for you. We do it for clients all the time. The trap you get into is if you negotiate yourself around the payment, then basically the car financing and the dealerships can work around the financing and create rates that are not advantageous for you. Always negotiate around the purchase price. Then you can deal with the payment. Best of luck with buying your car, and if you need any help, you can always visit Oxygen Financial or Call us at 1-800-355-9218.
My friends and family all think I’m a workaholic, but I say I’m just a guy that loves to help people do better in life.
My mother is still the only one that calls me by my real name Theodore Michael, my wife calls me Teddy, but for the rest of you it is just plain old Ted.
Ever since I was a little kid, I always loved money and being an entrepreneur. In fact, I still have cassette tapes of me talking to my grandmother at the age of five and my mother tells me all the time how much I played with money as a kid...
Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor regarding your individual situation.
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