auto 2013 buying guide
TRANSCRIPT
Auto2014 Buying
Guide
A Road Map to Your Next Car
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Congratulations!You made the right choice by getting your hands on this 2014 Capital One® Auto Buying Guide. And you just took the first step toward getting into your next vehicle!
We’re going to help you develop a road map for purchasing your next car by introducing you to what you need to know before you head to the dealership.
By the time you reach the end of this guide, you’ll be car shopping with confidence, because you’ll know how to:
• Determine what type of car is right for you.
• Secure your auto financing before you begin to shop.
• Take control of your financing and purchasing choices.
Throughout this guide you’ll find calculators and worksheets that will help you determine which car is right for you. Fill them out, print them, and take them with you when you test drive or purchase your vehicle.
WELCOME
2014AutoBuying Guide www.capitalone.com/autoloans
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Your Budget Monthly Living Expense Worksheet The 20% Rule
Researching Cars and Costs Pre-owned Vehicle Research Pre-owned Car Inspection Checklist Accessories and Add-ons Accessories Checklist Price Comparison Worksheet
Financing Your Car Your Credit Score When To Finance Finance with Capital One® About Interest Rates Monthly Car Payment Calculator Auto Loan Amount Calculator
Making The Deal Visiting the Dealership Buying Your Car Trading Your Car Selling Your Car Negotiating Tips Resources Summary Worksheet Online Auto Buying Research Credit Reporting Bureaus Auto Buying Glossary
References Capital One Auto Finance®
Table of Contents
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2014AutoBuying Guide www.capitalone.com/autoloans
the knowledge spotYour car payment should be
no higher than 20% of your monthly income1.
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Your BudgetThe first step toward buying a car is finding out how much you can spend. To do that, enter your monthly income after taxes in the worksheet below and subtract your monthly expenses. Add additional expenses, if necessary. The remaining balance is an estimate of what you can put toward your monthly auto payment.
Monthly Living Expense Worksheet
The 20% Rule
To estimate your car loan amount and monthly auto payment, use the 20% rule. Your monthly auto payment shouldn’t exceed 20% of your net monthly income. Simply multiply your net monthly income by .20 to get your estimated monthly auto payment.
Net Monthly Income X 20% (.20) Maximum Amount of Estimated Auto Payment
= $
Calculate
2014AutoBuying Guide
Monthly Income & Savings:
Monthly Income After Taxes $
Savings -$
Monthly Expenses:
Mortgage/Rent Payment -$
Utilities -$
Food -$
Transportation -$
Insurance (Home, Auto, Life) -$
Clothing -$
Entertainment -$
Education -$
Credit Card Payments -$
Other Creditor Payments -$
Other Vehicle Payments -$
Miscellaneous -$
Remaining balancefor your auto payment =$
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Researching Cars and Costs
Financing Your Car
Making The Deal
Resources
YOuR BuDGET
2014AutoBuying Guide
the knowledge spot
Almost 85% of auto shoppers would consider buying a certified pre-owned vehicle3.
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Pre-owned Vehicle Research
Many pre-owned cars now come with manufacturer-sponsored certification programs and extended warranties, which make them more reliable than before. It’s still good to give a pre-owned car a thorough inspection just to find out if any repairs will be in your near future.
Pre-owned Car Inspection Checklist
Area Inspected Pass/Fail
Exterior
Paint and chrome
Glass and metal surfaces
Leaks below engine
Tires
Tread wear
Spare tire and jack
Interior
Carpets and upholstery
Seat controls
Dashboard Controls
Windshield washer and wipers
Air conditioner, heater, & defroster
Lights
Dashboard and interior lights
Headlights, brake, turn signals
Start the Engine
Choke
Engine shaking or stalling
Make, Model, and Year:
_______________________
Odometer Mileage:
_______________________
Owner/Dealer:
_______________________
Asking Price:
_______________________
Address:
_______________________
_______________________
Phone:
_______________________
Date:
_______________________
Owner’s Manual Included:
Researching Cars and CostsChances are, your heart was already set on a particular car before you came across this guide, but is it the best option for your lifestyle and budget? Are you better off with a new or pre-owned car? Research is the key to finding out.
RESEARCHING CARS AND COSTS
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Your Budget
Financing Your Car
Making The Deal
Resources
2014AutoBuying Guide
the knowledge spot
74% of respondents said vehicle safety features and options are more important to them than they were five years ago4.
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Accessories and Add-ons
Accessories and add-ons can increase the value of the car, but understand that they willalso increase the total price and your monthly auto loan payment. Below, we’ve listedpopular accessories that you may want to add on to your new vehicle.
Accessories Checklist
From the list below, mark which items you consider to be a need or a want. This willhelp you choose which accessories are necessary and help you stay within budget.
Features I Need These I Want These
Upgraded Engine
Automatic Transmission
Upgraded or Sport Suspension
Traction Control
AWD (All Wheel Drive)
Upgraded Wheels and Tires
Leather or Heated Seating
On Star®
Upgraded Stereo
Navigation System
Cruise Control
Auto Dimming Mirrors
Homelink
Storage Package
Upgraded Trim Package
Sunroof/Moonroof
Trailer Towing Package
RESEARChING CARS AND COSTS
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Your Budget
Financing Your Car
Making The Deal
Resources
2014AutoBuying Guide
the knowledge spot
67% of newvehicle buyers use the Internet in their vehicle shopping process5.
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Price Comparison Worksheet
As you narrow your car search, the Price Comparison worksheet below will help you determine an estimated price for the vehicle you’re interested in.
Make: Model: Style: Year:
Item MSRP Base Invoice Source Source Price Price #1 Price #2 Price
Basic vehicle
Option package 1
Option package 2
Other options (Mfr. Code)
Destination fees
Other fees
Rebate
Trade-in
Taxes
Totals
RESEARChING CARS AND COSTS
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Your Budget
Financing Your Car
Making The Deal
Resources
• Equifax • Experian • TransUnion
the knowledge spot
There are 3 credit bureaus in the United States that compile credit reports:
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Financing Your CarIt’s important to understand your credit situation before determining if you can finance a car, who your lender should be, and when you should begin the process of obtaining your auto loan.
Your Credit Score
A credit score is a number between 300 and 850 that is used to help determine the likelihood of a borrower paying back a loan. Your score is determined in part by your credit payment history. It’s a great idea to review your credit report for accuracy at least once a year. If you believe it’s inaccurate, you have the right to challenge that information.
499 and below
Very Risky
Risky Good Excellent
If your credit score is lower than you expected, here are some tips that could help you out:
• Consistently pay your bills on time.
• Pay down your debt.
• Don’t open a new line of credit, like a credit card or home equity loan.
• Maintain a solid job history. Don’t assume that you must have perfect credit to qualify for a car loan with Capital One Auto Finance®. We offer a number of financial options tailored to your needs, based on your complete financial profile and credit history. Plus, we have exceptional customer service and the No Hassle experience you deserve.
Credit Score Range
500 to 599 600 to 699 700 and up
Source: SayPlanning.com8
FINANCING YOuR CAR
NOTE: This credit score scale is only an example. Capital One Auto Finance does not base credit decisions on this example.
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AutoBuying Guide
Your Budget
Researching Cars and Costs
Making The Deal
Resources
the knowledge spot
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When To Finance
Have your auto financing in place before you visit the dealership. This way you can focus on getting the best price for your car. You’ll know your financing terms up front, and that’s one less thing to negotiate at the dealership.
Finance with Capital One®
You can apply online now for a Blank Check® through Capital One Auto Finance® and lock in today’s interest rate for 45 days. You’ll have an online decision within minutes during business hours, so if you already know what you want to buy, you can shop as soon as tomorrow*! And since there’s no pressure to use the Capital One Auto Finance Blank Check, you can compare it to other auto financing offers you receive. You can choose which auto financing is best for you. Oh, you’re ready to apply today? Perfect, just visit www.capitalone.com/autoloans to fill out a No Hassle Auto Loansm application. You’ve got nothing to lose!
About Interest Rates
Having a fixed interest rate for the life of your auto loan allows you to know what your monthly payment will be month after month, with no surprises. Some financing companies offer variable APRs (Annual Percentage Rates) that fluctuate based on your payment history. If you finance with Capital One Auto Finance, the interest rate will not change over the entire life of the loan. That means you know for sure how much money you’ll save when comparing other finance offers. Our rates are competitive, view our current auto loan rates now.
Apply Now
*Business hours are Monday-Friday, 9 a.m. – 9 p.m. and Saturday, 10 a.m. – 7 p.m. ET. Closed Sundays. $15 delivery charge will apply to overnight the Blank Check.
70% of consumers say they will negotiate financing on their next vehicle purchase7.
FINANCING YOuR CAR
2014 AutoBuying Guide www.capitalone.com/autoloans
Your Budget
Researching Cars and Costs
Making The Deal
Resources
the knowledge spotThe average used vehicle loan for 2005 was
$16,4196
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APR % Please enter an APR, such as 6.09.
Loan term months Enter a loan term between 30 and 72 months.
Loan amount Enter a loan amount between $7,500 and $100,000.
Your Monthly Payment Results Based on the values you entered, here is the Monthly Auto Payment:
APR Loan Term Loan Amount Monthly Auto Payment
Auto Loan Amount Calculator*
APR % Please enter an APR, such as 6.09.
Loan term months Enter a loan term between 30 and 72 months.
Monthly payment Enter desired monthly payment.
Your Auto Loan Results Based on the values you entered, here is the Auto Loan amount:
APR Loan Term Monthly Payment Loan Amount
To help you decide what monthly auto payment or loan amount fits your budget, use the Monthly Car Payment and Auto Loan Amount Calculators below. Check out our current auto loan rates to get an idea of what your APR (Annual Percentage Rate) could be.
Monthly Car Payment Calculator*
FINANCING YOuR CAR
*The calculator is only intended for estimates.
Calculate Apply Now
2014AutoBuying Guide
Calculate Apply Now
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Your Budget
Researching Cars and Costs
Making The Deal
Resources
the knowledge spot
Making the DealToo often, people try to negotiate all elements of a car deal at once. The fact is, your purchase is several transactions that should be negotiated separately–besides securing auto financing, there is a negotiation associated with buying the car and trading or selling a car that you already own or lease.
Visiting the DealershipThere’s usually at least one dealership in every town and they provide the opportunity for you to get to know your options up close and personal. We suggest you visit a few to research the vehicles that you’re interested in and to take them for a test drive or two.
Buying Your CarThe key to fair negotiation is equal knowledge. You need to know as much about how a car is priced as your sales consultant does. By researching vehicle pricing before heading to the dealership, you’ll become just as knowledgeable.
Trading Your CarYou can expect a dealership to offer the wholesale value of your trade-in, minus deductions for excessive wear and tear and high mileage. Why the wholesale value instead of the retail value? When the dealership buys your used car, they are taking on the extra costs of selling it to someone else.
Selling Your CarIf you want to get a higher price on your current vehicle, consider selling your car privately. Just remember, you’ll have to advertise it, take the calls, meet the prospective buyers, let them test-drive your car, and handle the financial transaction.
Negotiating Tips
• Be Flexible on Features. Be prepared to compromise, but only on the extra features that are not on your need list.
• Ask Questions. Be sure to understand the dealership’s offer and have them explain each number presented to you.
• Be Prepared to Wait. Buying a vehicle is big commitment, so be prepared to take your time at the dealership.
• Get It in Writing. Have the sales consultant give you a quote with the price, terms, and options that are included in the deal.
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Over 80% of auto shoppers test-drove the vehicle before buying it2.
MAkING ThE DEAL
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ResourcesNow that you’ve worked your way through this guide, take a minute to review what you’ve learned. We’ve summarized most of our worksheets into this condensed version.
Just fill out the information below, print it out and take it with you when you test drive or purchase your next vehicle. Or if you decide to shop online, this will come in handy if it’s close by. You won’t have to print out this entire guide and you’ll have all of the information at your fingertips!
Summary Worksheet
My Vehicle
I am shopping for a: New Vehicle o Pre-Owned Vehicle o
Make: Model: Year:
My Top Three Needs Are (from page 3):
1.
2.
3.
My Top Three Wants Are (from page 3):
1.
2.
3.
My Budget (from page 1)
Monthly Income After Expenses: $
Monthly Income After Taxes x 20% (.20): $
Auto Financing Details (from page 7)
Annual Percentage Rate (APR):
Auto Loan Amount:
Auto Loan Term: months
Estimated Monthly Payment:
Auto Loan Application Details
Amount Requested: $
Date of Application
Date of Approval
RESOuRCES
Apply Now
2014AutoBuying Guide www.capitalone.com/autoloans
Your Budget
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Making The Deal
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ResourcesOnline Auto Buying Resources
• Capital One Auto Finance®
Auto Buying Glossary
APR (Annual Percentage Rate), interest rate: The yearly rate charged to a consumer to borrow the finance company’s money. APR is usually expressed as a percentage.
Blank Check®: A Capital One Auto Finance® check that is given to qualified applicants to purchase a new or used vehicle. The Blank Check can be used just like a personal check and gives the loan recipient flexibility and convenience when shopping for a vehicle. The check is valid up to the approved amount and there’s no obligation to use the check.
Depreciation: The value an asset loses due to wear and tear or time.
Equity (vehicle): The value of the vehicle minus the loan amount.
Extended warranty: Also known as a service contract. A contract that covers certain car repairs or problems after the manufacturer’s or dealer’s warranty expires. Extended warranties are sold by car manufacturers, dealers, and independent companies. With a new car, the extended warranty usually must be purchased by the end of the first year of ownership.
FICO: The most commonly used credit score. The name comes from the Fair Isaac Corporation, which developed the scoring model. They are used to predict the likelihood that a person will pay his or her debts. The score uses only information from credit reports.
Interest: The amount charged by the finance company to borrow money.
Invoice Price: This is the “cost” amount, and is normally the lowest price you will pay for a new car. Occasionally, dealer incentives and rebates will drive down the price to below invoice price.
Manufacturer’s Suggested Retail Price (MSRP): The retail price determined by the manufacturer and posted on the window sticker. The MSRP for a vehicle includes no additional options.
Monthly Payment: The principal and interest paid on a monthly basis over the life of the loan.
Credit Reporting Bureaus
• Equifax
• Experian
• TransUnion
RESOuRCES
2014AutoBuying Guide www.capitalone.com/autoloans
Your Budget
Researching Cars and Costs
Financing Your Car
Making The Deal
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©2014. Capital One and Capital One Auto Finance are federally registered trademarks. Blank Check is a registered trademark of Capital One Services, Inc. All rights reserved.
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Capital One Auto Finance®
For more information on auto financing or to apply for a Capital One Auto Finance Blank Check®, visit capitalone.com/autoloans.
We hope this road map has given you the confidence and information you need for an excellent car-buying experience. Now get out there and get a great deal on a great car.
RESOuRCES
References
1. Bankrate, “How Much Can You Afford?,” Bankrate, http://www.bankrate.com/brm/green/auto basics1-5a.asp?caret=6 (accessed March 28, 2007).
2. ArticleTrader, “Large Part of Auto Market Out For Certified Pre-Owned Vehicles, http://www.articletrader.com/automotive/large-part-of-auto-market-out-for-certified-pre- owned-vehicles.html&w=pre+owned+auto+buying+statistics& (accessed May 1, 2007).
3. Road and Travel, “Study: U.S. Consumers Put More Importance in Auto Safety Items,” http://www.roadandtravel.com/newsworthy/newsandviews03/trwsafetyfeaturestudy.htm By Marty Bernstein, Contributing Editor, AIADA. (accessed April 11, 2007).
4. AWARE – Americans Well-informed on Automobile Retailing Economics, http://www.autofinancing101.org/resources/dealerinfo.asp (accessed March 28, 2007).
5. ClickZ, “Web Increases Role in Auto Buying,” http://www.clickz.com/showPage. html?page=756491 (accessed May 1, 2007).
6. SayPlanning, “What is Your Credit Score?,” http://www.sayplanning.com/ saygoodcredit/credit-score.html (accessed May 25, 2007).
7. Road and Travel, “Smarter Auto Financing: Researching financing for your next car: What you need to know,” http://roadandtravel.com/autoadvice/2006/autofinancing.htm By Marty Bernstein, Contributing Editor, AIADA. (accessed March 28, 2007).
8. Benchmark Consulting International, “Consumer Bankers Association 2006 Automobile Finance Study: Highlights of the 2005 Year-End Data,” 2006, 8.
2014AutoBuying Guide www.capitalone.com/autoloans
Your Budget
Researching Cars and Costs
Financing Your Car
Making The Deal