Mind on Money: Stepping into the new car zoo
Marc Ruiz, Times Columnist
One of the most heroic vehicles I ever owned is a 2009 Acura TL, Technology edition. It came to me in 2010, with 10,000 miles, coming off a one-year lease. From the moment I test drove it, I knew it was special. I drove that car for nine years until my son Sam turned 16.
When Sam got his license, I gave him a choice to drive the Acura, or my venerable Nissan Titan pick-up. To my surprise, he chose the four-door sedan over the 4x4 truck. He knew the car was special as well. It was in excellent shape; I was proud to give it to him. In my heart I knew as a young male driver, he would likely run it into the ground, but because it had already served me so well, I was resigned to this fate. It felt like sending an old friend off on an uncertain, but exciting, new adventure.
Sam had the car at Indiana University last year and is working in an internship at a mutual fund firm in Cincinnati this summer. His internship started right after school ended, and so I really haven’t had eyes on the Acura for a while. My wife Tracy went to see her family in Cincinnati a few weeks ago; Sam is staying at her parents’ home. She said Sam told her he thought the car needed some work (it literally has never broken down in 13 years). A few weeks later I was in Cincinnati. I decided to inspect my beloved Acura and take her out for a drive.
Sam had scraped the rear quarter panel against the landscape paver wall at his college house. The damage was obvious, but not bad, and the front bumper had a scrape, which again, was not ruinous. The interior was remarkably clean, and all the tech inside still worked, but the thing that impressed me the most was the motor and transmission on this car, now with 226,000 miles on it, felt almost as strong as the day I first drove it. This was a truly special car.
The front end, however, was another story. After being driven by a teenager for four years everything up front was shot. Struts, ball joints, bushings, tires, all done. The thing floated down the road like a magic carpet. It clearly was not safe for him to drive around four hours from home. A decision had to be made.
I had actually purchased both the Acura and the Titan in the southern Ohio car market because I had realized years ago used car prices seemed a little cheaper down there, but I had not come to Cincinnati this time prepared to buy a car. I had no cash and no checkbook on me.
Which put me into the realm of used car financing. Oh boy, what an adventure. Now, as I have advised many times in this column, I relentlessly track my credit status on an app. So, I knew my credit score was in the “excellent’ range, and I expected this to impact the process. It did not. Sure, the approval was easy enough, but I spent the next 45 minutes arguing over interest rates and simply how we would discuss the loan. The car salesman kept wanting to talk about monthly payments, while I cared nothing about monthly payments and wanted to focus on rates, terms and early pay off penalties. Round and round we went.
I have no doubt, the materials they used to present the purchase and finance options were designed to be deliberately confusing. Leading me to realize our failure to communicate was actually a tactic. At one point, the dealership linked the trade-in value of my Acura to the interest rate on the car loan. How bizarre.
Finally, I took the trade-in off the table and accepted a less than attractive interest rate to get a few hundred dollars off the car price and escape the insanity. I talked to the lender directly on the phone to make sure there was no pre-payment penalty and did the deal. This wicked loan will be paid off on the first payment.
Clearly this process is wrought with peril and requires relentless preparation. I made some mistakes by having a limited time to purchase window, no ability to make a down payment and not calling a local lender I already have a relationship with, to check options before stepping into the new car zoo. Please learn from my blunders.
The silver lining, however, is I pulled the Acura off the trade block and nursed it four hours home. With a strong heart, and under adult control again, I am excited about the possibilities. It’s time for her to begin her third life, back with me.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. No investment strategy can guarantee a profit or preserve against loss.
Past performance is not a guarantee of future results. This material may contain forward looking statements; there are no guarantees that these outcomes will come to pass. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at firstname.lastname@example.org. Securities offered through LPL Financial, member FINRA/SIPC.