On Take it to the Bank,
00:00:01.36\00:00:02.70
you'll find ways
to get out of debt.
00:00:02.73\00:00:05.83
Solve your credit card problems.
00:00:09.80\00:00:14.84
How to make and
stick with the budget?
00:00:14.88\00:00:16.98
Simple ways to save.
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Buying or selling a home
and many more financial matters
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on Take it to the Bank.
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Hi, my name is Cordell Thomas,
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and welcome to
Take it to the Bank.
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Today is an exciting day
because I'm gonna tell you
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little about me,
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and tell you little
about some of the things
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that we can do to get
some shopping therapy.
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Not to go out and buy stuff,
that's not the shopping therapy
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I'm talking about.
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I'm talking about understanding
what you're getting into
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when you go to
purchase a vehicle.
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It's very interesting to me
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because we do financial literacy
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in to young
people in inner cities,
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and it's very interesting
when you talk to kids
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about what they want.
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In fact, to
give you little idea,
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they have a lot of
this online software kids
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to graduate from some
of these literacy programs
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have to navigate their
way through different things
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such as the
acquisition of our home,
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give them example of
that what's going off
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from that
standpoint, to buying furniture,
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to getting a car,
and once they get out,
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they have to navigate
that, that landscape in a way
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that they keep
things all under budget,
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keep things under budget.
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One of the things
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that is
arbitrarily thrown on them is
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when you enter that landscape,
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they're told who they are,
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so they could be
anything from a doctor
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with a $150,000 year salary,
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to a teacher with
$65,000 a year salary,
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to a maintenance worker,
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to a air traffic controller,
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you are given a label as
you enter that environment,
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and then you have
to maintain a budget
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keeping it under
that annual salary,
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and making it through
to the end and graduating.
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You can't actually graduate
from the financial led program
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until you
navigate your way through
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and keep things under budget.
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Now there's several things
that happen in that context
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is they want to buy
the newest furniture.
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You know what if you
are a college student,
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if you're labeled a college
student just entering a college
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and you only make
about $16,000-$18,000 a year
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of supplemental income,
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that could be a label you
get and the context is this.
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When you put
someone in that environment,
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you begin to see the
real person they are.
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It's not a real
world perspective
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because they don't have
to deal with all the scams
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and Ponzi schemes
that may be out there
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to take advantage of them.
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So that's really not real world,
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but they do have a
captive environment
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that they can begin the process
of making important decisions
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about where they live,
what they do with their money,
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where they go, what type of car
they purchase, and technically,
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you know what kind of house
they can eventually Afford.
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So you see a lot
of these kids buying,
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trying to get
into expensive homes
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or verbalizing saying,
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"Wow, if I could get
that home, I would be well off
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or and I would really
like to buy that Lamborghini,
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but I don't think I can
afford the $2000 a month cost
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that would take to get it
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or the concept of
buying new furniture
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to put in or fulfill or layout
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for the layout of their homes.
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So there are a lot of things
you learn about young people
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as they go through and
navigate this landscape,
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and the same thing applies
to we as older individuals,
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more mature individuals.
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As you look at the
context of what we do,
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and how we do things,
and the decisions we make.
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You can begin to see
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what challenge
we have as adults.
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We are greedy by nature.
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We're greedy by nature.
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And it takes us
to the Bible verse
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that talks about that.
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In Luke, Luke 12:13, 14, and 15,
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what does it say?
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He said, Jesus is
saying now, watch out,
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"Be on your guard
against all kinds of greed.
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A man's life does not consist
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in the abundance
of his possessions."
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But yet the first thing we
see that young people are doing
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is they're going after
the most expensive items,
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and trying to
attain those things
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and fill their
lives with those things,
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and we identify with that
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because we are
consumer driven society.
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When I first
came out to California
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or even before that time,
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I had an opportunity to work
in an automotive manufacturer
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as in with a company.
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The company was of such that
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I never had to learn
the context of what it took
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to own and to run a car.
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In fact, when I
worked with this company
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you were given every six months,
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you were given a new car
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to drive from that manufacturer.
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It was a part of the
deal, a part of the contract
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because as a sales
person going and talking
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to the different
organizations and dealerships,
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you had to have that
transportation that showed that
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you worked with
this organization.
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Now here is what's key
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is as I drove a car
and got it for free,
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I didn't really
understand the full context
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of what the cost
of a car really was
00:05:39.17\00:05:42.17
because it was given to me.
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Being given
something and not having to pay
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for something means
you don't really understand
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and respect the full
context of what it takes
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to run
something, what it takes to,
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to maintain
something and what it takes to,
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to really
appreciate what you have.
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It was in those times that
I began to learn the context
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of enjoyment
and going in driving
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and driving this new cars
00:06:06.70\00:06:08.03
and gaining a
specific objective,
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but there was a learning
experience that I gained
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that I would like
to share with you.
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One of the mechanisms
for training sales people
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at that time was to send
one of the representatives
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into a respective dealership
and get them to experience
00:06:20.11\00:06:23.35
the sales process.
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Now it shows two dealerships
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on two different
ends of the spectrum.
00:06:26.35\00:06:28.38
One is customer service
and treating you as an adult
00:06:28.42\00:06:32.25
and making sure
you're comfortable
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with the purchase process
and not selling you a car
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that you don't necessarily need,
00:06:36.42\00:06:37.76
but working with you
to develop a timeframe
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for your purchase
process and giving you the time
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necessary without hassling in.
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The other one was on the
other end of the spectrum
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where their philosophy
was, we don't care about you,
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all we care about
is selling the X car.
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So I don't care
if we see you anymore
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after this purchase process,
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we're gonna
hammer you into a car,
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and once you get into that car,
00:06:58.48\00:06:59.95
we really don't
care what happens to you
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after that because
all we need right now is
00:07:01.42\00:07:04.52
to make a profit off of you.
00:07:04.55\00:07:06.86
Different
mentalities altogether,
00:07:06.89\00:07:08.52
so I said I
actually have no problem.
00:07:08.56\00:07:09.89
I'll go, I'll take this
experience and learn from it
00:07:09.92\00:07:12.66
and I went into
the first dealership
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I went to were the one
that didn't really care about
00:07:14.76\00:07:16.67
even I drove in and,
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and pulled into the
sales department and,
00:07:19.97\00:07:23.34
and several sales
people surrounded me
00:07:23.37\00:07:25.41
and we talked to them
about what you're looking for,
00:07:25.44\00:07:27.28
what you want, why
is that you're here.
00:07:27.31\00:07:29.78
And I said I'm looking
00:07:29.81\00:07:31.15
at the possible
purchase of a new car.
00:07:31.18\00:07:34.32
I'm just, you know
coming in there to evaluate.
00:07:34.35\00:07:36.05
They said, well,
let's evaluate your used car
00:07:36.08\00:07:38.15
so they took my eyes,
which is a control process
00:07:38.19\00:07:40.49
and they left
to evaluate my car.
00:07:40.52\00:07:43.56
While I was, they
were evaluating the car,
00:07:43.59\00:07:45.69
I'm in there
with the sales staff
00:07:45.73\00:07:47.06
and I'm talking to them
and the sales person goes,
00:07:47.10\00:07:50.30
okay, cool what it
take to get you in a car?
00:07:50.33\00:07:52.30
I said I'm just
looking right now.
00:07:52.33\00:07:53.67
Well, why are you here?
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And then it elevated
to their next sales person
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or their manager
and to the next manager,
00:07:56.94\00:07:58.87
I didn't know how
many managers I talked to,
00:07:58.91\00:08:00.48
but I'm trying to tell
them, look, I'm not here to buy,
00:08:00.51\00:08:02.64
I'm here to just look
00:08:02.68\00:08:04.01
and try to make an
evaluation of the car
00:08:04.05\00:08:05.55
and at that time
the manager in charge
00:08:05.58\00:08:07.98
walks into the
room and looks at me,
00:08:08.02\00:08:10.02
why in the world
are you here anyway,
00:08:10.05\00:08:11.89
if you are not
here to buy a car?
00:08:11.92\00:08:13.36
It was a very
abrupt and very abusive
00:08:13.39\00:08:15.36
and very abrasive
experience for me,
00:08:15.39\00:08:18.06
and sooner or later
00:08:18.09\00:08:19.43
I was able to get out through.
00:08:19.46\00:08:20.80
I felt I was
locked into this jail
00:08:20.83\00:08:22.26
because they wouldn't let me go,
00:08:22.30\00:08:23.73
they wouldn't let me go
and then they had my car,
00:08:23.77\00:08:26.40
they had my keys and
what do I supposed to do.
00:08:26.43\00:08:29.67
So eventually he says,
yeah, you can get your car,
00:08:29.70\00:08:31.91
your car is out back.
00:08:31.94\00:08:33.27
And I had to find
my car and find my keys
00:08:33.31\00:08:37.31
that were sitting
on the top of the car
00:08:37.35\00:08:39.48
and eventually go home.
00:08:39.51\00:08:41.02
It was a bad
experience, but I learned
00:08:41.05\00:08:43.99
that we have to deal
with this type of scenarios
00:08:44.02\00:08:46.65
when you're looking
to purchase something,
00:08:46.69\00:08:48.06
but in that case I understood
that you're not gonna sell me
00:08:48.09\00:08:53.06
something I don't want.
00:08:53.09\00:08:54.43
I don't want this.
00:08:54.46\00:08:56.36
I am the purchaser,
I will buy what I need.
00:08:56.40\00:08:59.07
Okay, so I go to the next dealer
00:08:59.10\00:09:00.44
that they told me to go
to and that was the most
00:09:00.47\00:09:03.57
relaxing
experiences I ever been through.
00:09:03.61\00:09:06.04
Learning the context of
what it means to understand
00:09:06.07\00:09:11.11
and to empathize and
to work with the consumer
00:09:11.15\00:09:15.38
and make sure that
they are comfortable.
00:09:15.42\00:09:17.12
I didn't feel forced,
I just told them, look,
00:09:17.15\00:09:18.85
I'm here to look, they gave
me all the time in the world,
00:09:18.89\00:09:20.82
they allowed me to test drive,
I came back, sat in the lounge,
00:09:20.86\00:09:24.23
gave me cool drink
and those type of things.
00:09:24.26\00:09:27.96
And as I sat there, I felt
at peace and eventually I said,
00:09:28.00\00:09:30.67
you know what, I'm
not here to buy right now.
00:09:30.70\00:09:32.90
I'm just here to evaluate.
00:09:32.93\00:09:34.27
That's fine Mr. Thomas,
00:09:34.30\00:09:37.97
here's our card,
00:09:38.01\00:09:39.77
give us a call when you're ready
00:09:39.81\00:09:41.14
come on in
00:09:41.18\00:09:42.51
and let's think
about what your plans are
00:09:42.54\00:09:46.95
and what your goals are.
00:09:46.98\00:09:48.32
When do you need the car?
00:09:48.35\00:09:49.68
When do you plan
on purchasing the car?
00:09:49.72\00:09:51.35
Let's work through that,
00:09:51.39\00:09:52.72
and it was a
wonderful work relationship
00:09:52.75\00:09:54.16
because they called
and followed up with me.
00:09:54.19\00:09:56.76
Now what's my point here?
00:09:56.79\00:09:58.59
Therapy is understanding
00:09:58.63\00:10:00.70
the different type of
individuals and people,
00:10:00.73\00:10:03.30
sales individuals that
you're going to deal with
00:10:03.33\00:10:04.93
an ongoing basis.
00:10:04.97\00:10:06.74
It's key to understanding
how you can control the process
00:10:06.77\00:10:10.17
and ensure that
shopping therapy for you
00:10:10.21\00:10:13.78
isn't walking away from a store
00:10:13.81\00:10:19.11
or a dealership with a product
00:10:19.15\00:10:22.18
that you don't necessarily need.
00:10:22.22\00:10:25.75
It was a complete
learning experience
00:10:25.79\00:10:27.46
because I also learned
through that whole scenario
00:10:27.49\00:10:30.59
is the fact that
there are many costs
00:10:30.63\00:10:33.70
that go into the
acquisition of a product.
00:10:33.73\00:10:36.67
And in this case
what I would like to chat
00:10:36.70\00:10:38.83
with you about is
the acquisition of a car.
00:10:38.87\00:10:42.74
What goes in to a car
when you look to purchase it?
00:10:42.77\00:10:46.34
Many kids were
asked that same question
00:10:46.37\00:10:48.08
and all they think about in,
00:10:48.11\00:10:49.51
in our financial
literacy courses.
00:10:49.54\00:10:51.11
"Yeah, I want to
get a car when I get 16,
00:10:51.15\00:10:52.61
I'm going to go out
and I'm going to buy a car,
00:10:52.65\00:10:54.22
and I think I can afford
to spend $200 to $225 a month
00:10:54.25\00:10:58.95
of my hard-earned monthly income
00:10:58.99\00:11:01.42
to pay for that car.
00:11:01.46\00:11:03.49
And then you ask
them is that the only cost
00:11:03.53\00:11:06.09
that you think is
associated with a car?
00:11:06.13\00:11:09.10
And they think that is the
case until you begin the process
00:11:09.13\00:11:12.13
of discussing with them
the overall ramifications
00:11:12.17\00:11:17.64
and what they
get themselves into
00:11:17.67\00:11:20.54
when they think about a car.
00:11:20.58\00:11:23.38
So today, as we get into this,
00:11:23.41\00:11:26.21
remember there's two
things I want you to be aware of
00:11:26.25\00:11:28.82
that you are a steward,
you need to be faithful,
00:11:28.85\00:11:32.05
you need to understand
00:11:32.09\00:11:33.42
what your wants
and your needs are,
00:11:33.46\00:11:34.89
you need to
understand that you as a buyer
00:11:34.92\00:11:38.53
control the overall process.
00:11:38.56\00:11:40.66
So let's get started.
00:11:40.70\00:11:42.03
I'm going to give
you a case application.
00:11:48.10\00:11:52.47
We'll discuss and we'll begin
the process of embellishing
00:11:52.51\00:11:57.75
on this issue called
00:11:57.78\00:11:59.11
"Cars and Loans."
00:11:59.15\00:12:02.85
Angelina drives a
seven year old car
00:12:02.88\00:12:07.09
that recently needed
about $1300 in repairs.
00:12:07.12\00:12:11.39
Each day she drives
approximately 46 miles
00:12:11.43\00:12:14.90
to and from her job round trip.
00:12:14.93\00:12:18.47
What actions should she
take to decide if she should,
00:12:18.50\00:12:22.30
one, keep the car,
00:12:22.34\00:12:24.71
two, buy a new or used car,
00:12:24.74\00:12:27.44
and or three, buy a new car?
00:12:27.48\00:12:31.61
Now, many factors
00:12:31.65\00:12:35.32
go into this decision.
00:12:35.35\00:12:36.69
First of all,
00:12:36.72\00:12:38.15
Angelina must consider
her financial situation,
00:12:38.19\00:12:40.76
so we go back to the beginning.
00:12:40.79\00:12:44.49
In any kind of
financial situation
00:12:44.53\00:12:46.19
where there's a
potential transaction,
00:12:46.23\00:12:48.86
you go back to your finances.
00:12:48.90\00:12:51.43
You take everything
back to your budget.
00:12:51.47\00:12:55.10
You consider the
fact that I have planned
00:12:55.14\00:12:57.91
for this
acquisition if it's necessary.
00:12:57.94\00:13:00.18
You consider the fact that
00:13:00.21\00:13:01.54
I have it as a
part of my budget.
00:13:01.58\00:13:03.35
It's a part of my mid term.
00:13:03.38\00:13:05.48
What is a mid term?
00:13:05.51\00:13:06.85
Three months to a year goals
00:13:06.88\00:13:09.25
in acquiring this car
and I have already saved
00:13:09.28\00:13:11.65
approximately $3,000 for this
acquisition or this purchase.
00:13:11.69\00:13:15.26
So take everything
back to your budget.
00:13:15.29\00:13:17.99
How does all of this
fit in to your budget
00:13:18.03\00:13:20.20
and make sure that you
have evaluated your budget
00:13:20.23\00:13:23.23
and you have stayed faithful
to saving and putting money
00:13:23.26\00:13:27.04
away to that specific account
00:13:27.07\00:13:29.07
so that you can go forward with
00:13:29.10\00:13:31.24
within that timeframe
the purchase of a new car.
00:13:31.27\00:13:34.08
But, first of all,
00:13:34.11\00:13:36.68
check your financial situation
based on a realistic budget.
00:13:36.71\00:13:41.02
What amount can
she afford to spend
00:13:41.05\00:13:43.49
for buying a
different vehicle next?
00:13:43.52\00:13:47.09
Now, when we
take a look at that,
00:13:47.12\00:13:48.46
we should think
immediately about the 2010 rule.
00:13:48.49\00:13:51.79
What is a 2010 rule?
00:13:51.83\00:13:53.63
You should not
expect to exceed 20 percent
00:13:53.66\00:13:56.56
of your annual
net income in credit.
00:13:56.60\00:14:01.74
And then the 10 percent means
00:14:01.77\00:14:03.10
you shouldn't expect to pay back
00:14:03.14\00:14:04.97
more than 10 percent
of your monthly net income
00:14:05.01\00:14:08.84
to repayment of
that debt 2010 rule.
00:14:08.88\00:14:11.61
So how much can
she afford to spend
00:14:11.65\00:14:14.95
is based on how much she makes,
00:14:14.98\00:14:16.95
and based on how much she makes,
00:14:16.99\00:14:18.52
she can allocate
a certain portion
00:14:18.55\00:14:19.99
of that to the debt.
00:14:20.02\00:14:22.12
Next, will her current car
00:14:22.16\00:14:24.23
after the recent repairs give
her reliable transportation?
00:14:24.26\00:14:28.56
Is that fix
something that will take care
00:14:28.60\00:14:32.53
of all of the problems.
00:14:32.57\00:14:33.90
I mean, when you think
about a seven year old car.
00:14:33.94\00:14:36.57
I think it's about
the right time to change
00:14:36.60\00:14:39.04
the timing belt
based on how much miles,
00:14:39.07\00:14:40.91
that doesn't give
us enough information,
00:14:40.94\00:14:42.51
but if it's a seven year old car
00:14:42.54\00:14:44.68
and someone is driving
00:14:44.71\00:14:46.05
approximately
20,000 miles a year,
00:14:46.08\00:14:47.58
the car has approximately
140,000 miles on it.
00:14:47.62\00:14:50.85
A car typically requires that
their timing belt is changed
00:14:50.89\00:14:54.16
or at least check at
around 100,000 miles.
00:14:54.19\00:14:57.49
You can check on that, each
car may be slightly different.
00:14:57.53\00:15:00.10
So in this case $1,300 worth
of repairs may be a necessity
00:15:00.13\00:15:04.63
because of the age of her car.
00:15:04.67\00:15:06.74
It doesn't necessarily mean that
00:15:06.77\00:15:08.24
her car is no
longer road worthy.
00:15:08.27\00:15:10.31
It just means it needs
that repair to take care of it,
00:15:10.34\00:15:12.94
and she had the savings in place
00:15:12.97\00:15:15.18
for this financial emergency.
00:15:15.21\00:15:17.98
Next,
00:15:21.82\00:15:24.09
is it the
reliable transportation
00:15:24.12\00:15:25.59
she's looking for?
00:15:25.62\00:15:27.19
Is she
currently having problems?
00:15:27.22\00:15:28.72
What I'm reading
into this setting
00:15:28.76\00:15:30.93
is that the car
needed the repairs.
00:15:30.96\00:15:33.50
Every car after
its warranty is over
00:15:33.53\00:15:36.80
will need some update keep,
you're going to change tires.
00:15:36.83\00:15:40.00
You're going to
change the wiper blades.
00:15:40.04\00:15:41.54
You're going to
change many of the wear
00:15:41.57\00:15:42.90
and tear items on the car.
00:15:42.94\00:15:44.77
Many cars nowadays have
00:15:44.81\00:15:46.54
six year 100,000 mile
power train warranties.
00:15:46.57\00:15:50.08
After that's over,
00:15:50.11\00:15:51.45
you don't have any more
coverage on the power train.
00:15:51.48\00:15:54.48
But as long as
you maintain your car,
00:15:54.52\00:15:56.45
you change your oil,
00:15:56.48\00:15:57.82
you keep things
in the right place
00:15:57.85\00:15:59.49
and you check the fluids,
00:15:59.52\00:16:00.86
there shouldn't
be any major concern,
00:16:00.89\00:16:02.56
and especially now in
the environment we live.
00:16:02.59\00:16:06.49
Automotive manufacturers
have improved the quality
00:16:06.53\00:16:09.56
of their vehicle,
so you shouldn't really
00:16:09.60\00:16:11.83
have to change your
car every four years.
00:16:11.87\00:16:14.37
You can maintain a
car and hold on to cars.
00:16:14.40\00:16:16.77
I've seen cars on the road
00:16:16.81\00:16:18.17
for 10, 12, 14, 16 years.
00:16:18.21\00:16:24.28
I think that the major
issue at this point in time
00:16:24.31\00:16:26.48
is realizing that
00:16:26.51\00:16:28.95
the intent here is
to study the parameters
00:16:28.98\00:16:32.52
of your specific situation.
00:16:32.55\00:16:33.89
What I think is
the $1,300 is the fee
00:16:33.92\00:16:37.13
that you would
need to pay to take care
00:16:37.16\00:16:39.23
of a major thing on your car.
00:16:39.26\00:16:41.83
The timing belt needs to
be taken care of at a certain
00:16:41.86\00:16:44.90
timeframe in the
ownership of your car.
00:16:44.93\00:16:47.50
So it's at this
point in time I'm assuming
00:16:47.54\00:16:50.67
that it was
needed, so she spent it.
00:16:50.71\00:16:53.71
Now is a car roadworthy?
00:16:53.74\00:16:55.18
I would suspect it is,
00:16:55.21\00:16:56.54
if it's never
given her any problems.
00:16:56.58\00:16:57.95
She's taken care of
the necessary repairs.
00:16:57.98\00:17:00.38
So the car I would suspect
00:17:00.42\00:17:01.75
as long as she's
taking care of it,
00:17:01.78\00:17:03.39
will last her a
little bit longer.
00:17:03.42\00:17:06.59
So, in addition to
those specific questions.
00:17:06.62\00:17:11.53
How do the
expected operating costs
00:17:11.56\00:17:13.96
of the various vehicles compare?
00:17:14.00\00:17:15.86
So the
operating cost of her car,
00:17:15.90\00:17:17.97
it's a seven year old car,
00:17:18.00\00:17:20.04
so you know we are getting
an average of 24 to 30 miles
00:17:20.07\00:17:25.11
per gallon on most cars now.
00:17:25.14\00:17:26.91
What type of car
did she purchase?
00:17:26.94\00:17:28.78
What type of
mileage is she getting?
00:17:28.81\00:17:31.68
What's the
insurance rate she is paying?
00:17:31.71\00:17:33.82
All of these elements
go into the cost of a car
00:17:33.85\00:17:36.35
which is what we're
gonna talk about here,
00:17:36.38\00:17:38.55
because based on that
scenario with Angelina
00:17:38.59\00:17:41.02
and her seven year old car.
00:17:41.06\00:17:42.56
I'm saying from my standpoint
that it isn't necessary
00:17:42.59\00:17:46.76
that after seven years,
you have to get a new car.
00:17:46.80\00:17:50.30
Now in this segment I'm
hopeful, we have the graphic,
00:17:50.33\00:17:52.63
but I have a
graphic of a car I own.
00:17:52.67\00:17:56.27
And I love to show it to
you, because this car is a car
00:17:56.30\00:17:59.94
that has approximately
250,000 miles on it.
00:17:59.97\00:18:03.58
The car in and of itself
provides you an explanation
00:18:03.61\00:18:07.92
as to what I'm talking about
from Angelina's standpoint,
00:18:07.95\00:18:10.62
her car is seven years of age.
00:18:10.65\00:18:12.35
My car is
approximately 12 years old.
00:18:12.39\00:18:15.22
I've bought it in 1999,
00:18:15.26\00:18:17.19
and I've changed
the oil meticulously,
00:18:17.23\00:18:19.53
and I have taken care of
it as much as I possibly can.
00:18:19.56\00:18:22.06
The car I believe
stills looks relatively new.
00:18:22.10\00:18:24.90
And many people think
of the car as a recent,
00:18:24.93\00:18:28.17
recent vehicle
that has been developed
00:18:28.20\00:18:30.81
from a manufacturing standpoint,
00:18:30.84\00:18:32.87
but the key to
this is the car in
00:18:32.91\00:18:35.01
and of itself can
be well maintained
00:18:35.04\00:18:36.61
and well taking care of.
00:18:36.64\00:18:37.98
Not to say that I
haven't had a lot of things
00:18:38.01\00:18:40.68
that need to be fixed
on it or things that need
00:18:40.72\00:18:42.75
to be changed on it with
the ongoing annual oil changes
00:18:42.78\00:18:46.19
and those type of things.
00:18:46.22\00:18:47.56
What it means is that if
you take care of something,
00:18:47.59\00:18:50.59
it doesn't mean
they're going to be cost,
00:18:50.63\00:18:52.36
aren't going to be
costs associated with owning
00:18:52.39\00:18:55.76
that specific vehicle.
00:18:55.80\00:18:57.47
There are things you
need to be concerned about now
00:18:57.50\00:18:59.33
when you're going out
and shopping for a car.
00:18:59.37\00:19:01.50
What type of car can you afford?
00:19:01.54\00:19:03.14
How much money are you making?
00:19:03.17\00:19:04.84
How does a 2010 rule apply
00:19:04.87\00:19:07.51
to my
acquisition of a new vehicle?
00:19:07.54\00:19:09.94
If you take a look at
these specific issues,
00:19:09.98\00:19:12.01
then you can
make a good decision
00:19:12.05\00:19:13.52
about what type of
car you're going to buy.
00:19:13.55\00:19:15.22
One of the things I recommend is
00:19:15.25\00:19:17.49
look at a car that is
two year, two years new.
00:19:17.52\00:19:21.06
It typically has
the remaining four,
00:19:21.09\00:19:22.96
three or four years of
the power train warranty
00:19:22.99\00:19:25.06
and other
coverage on the vehicle.
00:19:25.09\00:19:27.60
But additional to
that, you are paying
00:19:27.63\00:19:30.17
a more respectable price
for a vehicle without paying
00:19:30.20\00:19:32.97
the invoice and
or new car price.
00:19:33.00\00:19:36.34
Those are things
you need to look at
00:19:36.37\00:19:38.51
and continue to consider
00:19:38.54\00:19:40.31
when looking at
the purchase of a car.
00:19:40.34\00:19:43.51
The second issue is
when you buy something
00:19:43.55\00:19:45.91
and these talks about values.
00:19:45.95\00:19:47.78
This is very, very important.
00:19:47.82\00:19:49.92
When I was a child, the
issue of credit was not,
00:19:49.95\00:19:52.95
was negligible.
00:19:52.99\00:19:54.32
We hadn't really gotten into
those problematic situations.
00:19:54.36\00:19:56.66
What I did learn is when
my dad took me to the barber,
00:19:56.69\00:19:59.89
I heard all of these fantastic
conversations about these guys
00:19:59.93\00:20:03.70
that knew
everything about everything.
00:20:03.73\00:20:05.47
But what came across to
me was when I buy something
00:20:05.50\00:20:09.14
with my hard-earned money,
I treat it a lot differently
00:20:09.17\00:20:13.11
than if I use a lot of
credit or I don't have,
00:20:13.14\00:20:17.55
I haven't taken the time to save
00:20:17.58\00:20:20.98
and put away a certain
amount for a certain purchase.
00:20:21.02\00:20:25.12
When you take the time,
and when my son for example,
00:20:25.15\00:20:28.39
who is attempting to
raise a $75 to buy himself
00:20:28.42\00:20:31.23
a new bike is this.
00:20:31.26\00:20:34.53
When he gets that bike, he
is going to love that bike,
00:20:34.56\00:20:38.87
and he's going to take
care of it because he has worked
00:20:38.90\00:20:42.10
so hard to get the bike.
00:20:42.14\00:20:44.97
The same thing
with my first car.
00:20:45.01\00:20:47.58
I worked hard for it, I
took care of it, I washed it.
00:20:47.61\00:20:51.11
Took meticulous...
00:20:51.15\00:20:53.15
look at it from meticulous
standpoint and made sure
00:20:53.18\00:20:56.38
that it was going
to last me a long time.
00:20:56.42\00:20:58.69
My first car
was a Toyota Tercel,
00:20:58.72\00:21:02.42
and it was one
of the best vehicles
00:21:02.46\00:21:05.83
that I ever had
it and lasted for
00:21:05.86\00:21:08.10
what I know about 237,000 miles
00:21:08.13\00:21:11.43
until I sold it and moved
on to a different organization
00:21:11.47\00:21:16.47
that gave me these
cars that I could drive.
00:21:16.50\00:21:20.68
I don't know what
happened to that car,
00:21:20.71\00:21:22.71
and there comes a
certain attachment
00:21:22.74\00:21:24.11
that people
have with these cars.
00:21:24.15\00:21:26.31
Uh, I miss it.
00:21:26.35\00:21:27.78
But here's a key.
00:21:27.82\00:21:30.59
I took care of this item
that God had blessed me with.
00:21:30.62\00:21:35.52
And this car that I showed
to you is the same exact issue.
00:21:35.56\00:21:40.50
And the key to understanding
the costs of owning a car
00:21:40.53\00:21:44.43
is that it's not just the car,
00:21:44.47\00:21:47.14
it's what you
have to put into it.
00:21:47.17\00:21:48.94
There's several other items.
00:21:48.97\00:21:50.77
Costs of owning a
car include these items,
00:21:50.81\00:21:54.08
the initial
purchase price of the car.
00:21:54.11\00:21:56.08
Number two, it
includes the registration
00:21:56.11\00:21:58.38
and the title costs,
it includes sales tax,
00:21:58.41\00:22:01.75
wherever you may be,
whatever state you're in,
00:22:01.78\00:22:03.89
the sales tax very.
00:22:03.92\00:22:05.32
In California, what is it 7.75.
00:22:05.35\00:22:08.72
Financing costs, depreciation,
00:22:08.76\00:22:12.36
insurance which is
mandatory if you get a vehicle.
00:22:12.39\00:22:15.26
Schedule maintenance,
00:22:15.30\00:22:16.63
on certain
higher end of vehicles
00:22:16.67\00:22:19.93
that schedule maintenance
may cost a little bit more.
00:22:19.97\00:22:22.20
So take a look at what
you can afford and build these
00:22:22.24\00:22:26.11
specific items
right into your budget.
00:22:26.14\00:22:30.05
And of course, if you
live in certain states,
00:22:30.08\00:22:32.35
storage costs for your vehicle
may be a significant concern.
00:22:32.38\00:22:37.59
Understand the 2010
rule when you're considering
00:22:37.62\00:22:41.02
how much you can afford.
00:22:41.06\00:22:43.06
And then understand that
there are additional costs
00:22:43.09\00:22:46.90
for operating a car.
00:22:46.93\00:22:48.46
What are those?
00:22:48.50\00:22:49.83
Here are five unscheduled
repairs and maintenance.
00:22:49.86\00:22:54.24
Go back to your budget.
00:22:54.27\00:22:55.60
Go back to the budget
and see whether not you are
00:22:55.64\00:22:58.04
putting away money for
unscheduled emergencies
00:22:58.07\00:23:02.64
that comes up
often and more often
00:23:02.68\00:23:05.41
that you like to understand
in reference to owning a car.
00:23:05.45\00:23:10.39
Two, gasoline.
00:23:10.42\00:23:12.05
If you looked at my budget
00:23:12.09\00:23:13.42
or if you were able
to get access to it,
00:23:13.46\00:23:15.49
you'll see that I spend
an average of $300 to $350
00:23:15.52\00:23:19.43
a month on gas
alone for the two cars
00:23:19.46\00:23:21.16
that me and my wife own.
00:23:21.20\00:23:23.73
That is a key
thing to understand,
00:23:23.77\00:23:26.03
so it's not only the
monthly, monthly loan amount
00:23:26.07\00:23:29.97
that you're paying back on
the car which could be $200.
00:23:30.01\00:23:33.38
Now I'm paying about $300 a
month in gas, that's now $500.
00:23:33.41\00:23:38.95
There is other funds
for unscheduled maintenance
00:23:38.98\00:23:41.48
that you need to allocate for.
00:23:41.52\00:23:43.02
Number three, you need to
change the oil and other fluids
00:23:43.05\00:23:46.05
of the vehicle that can
easily be between $29 and $50
00:23:46.09\00:23:49.72
depending on if your
vehicle takes regular oil
00:23:49.76\00:23:52.69
or synthetic oil.
00:23:52.73\00:23:54.33
You're looking at
parking and tolls.
00:23:54.36\00:23:56.93
If you live in New York, or
if you live in certain states,
00:23:56.97\00:24:00.80
there are tolls,
there are parking issues,
00:24:00.84\00:24:03.07
and you may have to
come up with more funds
00:24:03.10\00:24:05.01
just to take care
of those concerns.
00:24:05.04\00:24:07.54
And of course,
always bake into it
00:24:07.58\00:24:10.78
the possibility
of getting a ticket.
00:24:10.81\00:24:13.82
So those things can
come up out of the blue
00:24:13.85\00:24:18.22
and if you're
not planning for it,
00:24:18.25\00:24:20.02
and if you don't
have the savings for it,
00:24:20.06\00:24:21.92
it can hurt you tremendously.
00:24:21.96\00:24:24.66
Okay, shopping a
car, decide how much
00:24:24.69\00:24:28.06
you're going to spend.
00:24:28.10\00:24:30.13
Decide the right
type of purchase for you.
00:24:30.17\00:24:33.87
Remember, control the process.
00:24:33.90\00:24:35.74
You're not being sold something.
00:24:35.77\00:24:37.61
You're planning to
purchase something.
00:24:37.64\00:24:39.67
You're not going
to plan to plunk down
00:24:39.71\00:24:42.74
$20,000 on the vehicle
that you haven't researched.
00:24:42.78\00:24:46.41
Research is key.
00:24:46.45\00:24:48.55
What is it that works for you?
00:24:48.58\00:24:50.52
What type of person are you?
00:24:50.55\00:24:52.35
What type of color do you like?
00:24:52.39\00:24:54.22
What's going to be able
to get you to and from work?
00:24:54.26\00:24:56.86
Is it going to be
used primarily to travel
00:24:56.89\00:24:59.13
long distances
and understand that
00:24:59.16\00:25:00.60
if you travel a long distance,
00:25:00.63\00:25:02.53
it's going to
impact your insurance.
00:25:02.56\00:25:04.47
They're going to ask, "How far
do you travel to work and back.
00:25:04.50\00:25:07.40
What's your round trip amount?"
00:25:07.44\00:25:09.40
Those are key issues
and questions you need
00:25:09.44\00:25:12.01
to ask yourself, as you
put into your budget this goal
00:25:12.04\00:25:16.78
of purchasing a vehicle
and what its priority is.
00:25:16.81\00:25:20.15
Is the priority in
three to six months,
00:25:20.18\00:25:22.48
and it may give
you that amount of time
00:25:22.52\00:25:23.99
to do the additional research.
00:25:24.02\00:25:28.16
Understand that
used car from a dealer,
00:25:28.19\00:25:33.19
you have to consider the cost.
00:25:33.23\00:25:35.36
You have to consider a
couple of other elements
00:25:35.40\00:25:37.93
such as the
reliability of the vehicle,
00:25:37.97\00:25:40.24
the dealer reputation.
00:25:40.27\00:25:42.10
Believe me, I learned
that from that other dealer
00:25:42.14\00:25:45.11
I talked to about that
didn't care anything about me.
00:25:45.14\00:25:47.71
All they cared about
was putting another car
00:25:47.74\00:25:49.48
over the curb.
00:25:49.51\00:25:50.85
That's a term
they use in automotive,
00:25:50.88\00:25:53.48
in automotive environments
about selling a new car,
00:25:53.52\00:25:56.32
putting that car over the curb.
00:25:56.35\00:25:58.09
That's all they
care about from me.
00:25:58.12\00:25:59.45
I want you in that car.
00:25:59.49\00:26:00.82
I want you gone because all
we want is a profits from you.
00:26:00.86\00:26:03.26
Check on their reputation.
00:26:03.29\00:26:05.39
Read the buyer's guide sticker.
00:26:05.43\00:26:07.66
Consider the warranty
in the service contract
00:26:07.70\00:26:10.17
that may be
remaining on that used car.
00:26:10.20\00:26:12.83
What do you do if you have
problems with that vehicle?
00:26:12.87\00:26:17.01
If the dealer has
a good reputation,
00:26:17.04\00:26:18.47
he's probably
going to work with you
00:26:18.51\00:26:19.84
to resolve the problems,
00:26:19.87\00:26:21.21
if he has a
difficult reputation.
00:26:21.24\00:26:22.71
I've seen situations
where people have been
00:26:22.74\00:26:25.81
gouged and have
been treated badly
00:26:25.85\00:26:28.05
in those type of environments.
00:26:28.08\00:26:29.62
So, don't just
make an assumption that
00:26:29.65\00:26:31.99
it's going to be easy
for you to wheel and deal,
00:26:32.02\00:26:34.39
and to come up with the right
cost that you need for a car,
00:26:34.42\00:26:37.99
and you're going to
get it from a good dealer.
00:26:38.03\00:26:40.60
Search, do your, do your
research and find someone
00:26:40.63\00:26:44.77
that's comfortable to deal with,
00:26:44.80\00:26:46.33
with the right
product that you think
00:26:46.37\00:26:48.07
will be adequate for your needs.
00:26:48.10\00:26:50.71
A new car, always read about
00:26:50.74\00:26:52.74
the new car features and prices.
00:26:52.77\00:26:54.18
Shop around, shop
around as much as you can.
00:26:54.21\00:26:56.58
Plan to negotiate the price.
00:26:56.61\00:26:59.91
If you need help, get the help,
00:26:59.95\00:27:02.45
learn the terms and
consider the service contract.
00:27:02.48\00:27:05.82
Warranties, a brief
talk about warranties.
00:27:05.85\00:27:08.06
When you buy a car,
there are warranties
00:27:08.09\00:27:10.13
and service contracts.
00:27:10.16\00:27:11.49
There are types of warranties
to include as is warranty
00:27:11.53\00:27:14.46
you drive the car
off, and it's as is,
00:27:14.50\00:27:17.63
you don't have
any other cover...
00:27:17.67\00:27:19.40
any other
coverage, it's just as it is.
00:27:19.43\00:27:21.90
There is an implied warranty.
00:27:21.94\00:27:23.34
There is a dealer warranty.
00:27:23.37\00:27:24.91
You need to make sure
you know what's available.
00:27:24.94\00:27:27.31
And there is a
manufacturer's warranty.
00:27:27.34\00:27:30.15
Many things
apply, many things apply.
00:27:30.18\00:27:34.28
You need to be aware
of all of these elements
00:27:34.32\00:27:36.89
about going into
buying a car APR.
00:27:36.92\00:27:40.29
How long is your
length of the loan
00:27:40.32\00:27:42.09
that you're planning to acquire?
00:27:42.12\00:27:43.53
What are your monthly payments?
00:27:43.56\00:27:45.09
What will be the
total finance charges
00:27:45.13\00:27:48.26
that you're going to have?
00:27:48.30\00:27:50.13
What will be the
total you're going to repay?
00:27:50.17\00:27:52.33
And shop around for
the best loan for you.
00:27:52.37\00:27:55.47
Listen, take it to the
bank and save for this purchase.
00:27:55.50\00:28:00.58
God bless.
00:28:00.61\00:28:01.94