WEBVTT

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- So you're looking to buy a car.

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So, I'll at least tell
you how I would approach

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buying a car.

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The first thing is thinking
about what you can afford.

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And, I would think about that before

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you even look at the types
of cars you might wanna buy.

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Because it could be very
tempting to get some car,

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and then somehow rationalize
that you can afford it.

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So, look at your budget,

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look at how much money you can,

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you think you can put aside.

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Let's say, every month.

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Either for a payment on
a car, to lease a car,

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or to save up for a car.

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And if you're going to
be financing the car,

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or getting it on a lease,

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you're also gonna have to
put some money down there.

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But think about that, what you can budget.

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And then, whatever amount that is,

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remember, it's not just gonna be

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for the payments on the
car, or the cost of the car.

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It's also going to be
needed for things like gas.

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And things like insurance,
and maintenance.

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And maybe even a parking spot,

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if you need to pay for
where you're going to

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actually keep your car.

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So, keep all of those things in mind.

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Now, once you have that in place,

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you can think about what kind
of car you're going to buy.

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And, I really encourage you to think about

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the car that you need,

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versus some dream about
what you might want.

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I think all of us are, as human beings,

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we are very susceptible
to market, marketing.

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We imagine, "Hey, if I had this car,

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"my friends are gonna say
this, this, and that."

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Usually they won't care.

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And almost any car you buy,

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even if it's a super-fancy
exotic sports car,

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within a week or two, it's
gonna get old. (chuckling)

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And you're gonna realize
it's just something

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to get from point A to point B.

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So, think about what you need.

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How much capacity, storage,

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how many people are you
gonna be transporting?

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In terms of cost? Gas.

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How much gas it is using?

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And it's not just the cost of the gas,

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but the convenience, or the inconvenience,

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of having to stop for gas
if you're driving a lot.

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Think about, when you think
about the cost of the car,

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don't just think about how
much you're paying for it.

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Or, don't just think about the payment

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that you're making on either
the financing, or a lease.

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Think about what that car
might be worth in five years,

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or 10 years, however
long you are taking it.

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So, there are definitely scenarios

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where Car A might cost more than Car B,

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but the amount that they have depreciated,

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over say five years,

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the more expensive car
has depreciated less.

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So the cost of owning it,

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if you sell either car after five years,

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the cost of owning the more expensive car,

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in some cases, not always,
it's usually not the case.

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But sometimes it is,

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the more expensive car
could actually be cheaper,

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because it has a higher resale value.

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Once you figure out the
type of car you're getting,

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and even if you could afford more car,

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I do encourage, get the car you need.

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And if you have surplus money,
put it into your savings,

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invest it, like in all the other videos

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that we've talked about.

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But now you're ready to go,

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to actually go get the car itself.

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Now, if when you're selecting
a car, be sure to test drive.

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Think about the warranty if
you're getting a used car.

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Make sure you get the vehicle
identification number,

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the VIN number, so that you can make sure

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that it hasn't been damaged,

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it hasn't been in an accident before,

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there isn't some shady history
associated with the car,

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that you don't know about.

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And then, once you identify a car,

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everything looks good,

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it looks like a car you can afford,

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it's the car that you need.

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Then, you have to think about
how you're gonna pay for it.

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And of course, if you've
saved up money for a car,

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maybe you could pay with cash,
or significant down payment,

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finance the rest.

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Financing, as we talked
about in other videos,

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it's gonna be dependent
on your credit score.

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Definitely look carefully
at the interest rate.

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And then, leasing could also be option.

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Now leasing, if you own
a business of some kind,

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especially a business that requires a car,

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a lease can be interesting,

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because it might be tax deductible.

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So it helps to reduce your tax burden.

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But in most cases,

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a lease ends up when you do the math,

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actually becomes more
expensive than financing it.

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And there's some limitations
to leasing, as well.

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You can only drive it so many miles

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over the course of a year.

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Beyond that, the company might charge you.

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And then, you might lease
it for two or three years,

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and then after that point,

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you have to get in another lease.

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Sometimes they will
allow you to buy that car

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at a discounted price.

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But once again, usually
you should do the numbers.

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It's gonna cost a little bit more

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than if you just bought it out right,

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or if you were to finance the car.

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But think about how you're
going to pay for the car.

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It's a very important consideration there.

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And then, you get the car.

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And there, the paperwork can
be really involved sometimes.

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I encourage you, call ahead of time.

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Do as much negotiating as
you can do on the phone.

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It's like, okay, this is a firm price,

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this is what we're gonna do.

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Get them to say, "Yes."

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And even on price, you can look up things

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like the MSRP, the Manufactured
Suggested Retail Price.

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And you can also look the invoice price,

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which is essentially what the dealer is,

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what it cost for the
dealer to get the car.

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Now, if your car is on demand,

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if there's a shortage, a wait list,

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you're not gonna be able to
get close to the invoice price.

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It probably will be closer to

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the Manufactured Suggested Retail Price,

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maybe even a little bit more,

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if it's a really high-demand car.

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But if it's not a super high-demand car,

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there's a lot of inventory
at the dealership,

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you could actually
discount a pretty good bit.

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And you could even get invoice,

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or in many cases, you
can even sometimes get

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Be really thoughtful on price.

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Don't necessarily,

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unless it's an option
that you really want,

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and usually you're gonna
have to get insurance

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within a few days of
bringing the car home,

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or sometimes you have to have
the insurance immediately

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when you get it.