Dealership Add-ons

Dealerships give several options to buyers to make more money and among them include finance, vehicle and security protection.  

Finance Protection

Finance protection covers Life insurance, Disability Insurance and Extended Protection warranties.

a) Life insurance protects your family from the financial risks due to an untimely death. Should you die before the financial obligation on your vehicle is fully re-paid, your family does not pay out the loan. Life Insurance Protection covers the entire term of your loan.

b) Disability insurance is designed to protect you from financial risks of an interruption in your ability to earn an income. It is a 24 hour accident and sickness insurance that makes your payments for an extended period should you become injured or fall sick and unable to earn an income.

c) Extended Protection Plan is similar to vehicle compressive insurance. It protects you from unexpected breakdowns and unforeseen costly repairs.

Vehicle Protection

a) Leather and Vinyl Protection

The sun's harmful ultraviolet rays cause fading, cracking, and discoloration of your vehicle's leather and vinyl interior. Leather and Vinyl Protection involves using penetrating conditioners to create a barrier that locks in the essential oils and pigments, and provides ultraviolet sunscreen while still allowing the leather to "breathe". This in turn prevents aging of your vehicle's interior leather and vinyl.

b) Fabric Protection

Spills and everyday mishaps are almost unavoidable, many leaving permanent stains on your new vehicle's seats and floor. Fabric Protection is an invisible barrier that ensures easy clean-up of spills to avoid permanent staining. Penetrating each fiber to repel moisture and dirt, while the treated fabric remains perforated.

c) Paint Sealant

The sun's powerful ultraviolet rays cause your car paint to fade. The clear coat finish on your vehicle's painted surface is uneven. These peaks and valleys trap dirt, salt, pollutants and moisture which dull the finish, ruin the look of your vehicle, and affect its resale value. Paint Protection bonds to the surface completely sealing the paint. It creates a smooth, durable finish that protects your vehicle against a harsh environment. This long-lasting sealant protects and enhances your vehicle's clear coat with no need for waxing or reapplication.

d) Undercoat Protection

Disturbing road noise and vibrations can make a long road trip even longer and more tiring. Undercoat Protection is specially formulated for exposed high impact areas. This pliable product will not crack, peel, or chip. It seals out moisture and protects your under-carriage components from road debris. It also provides insulation from extreme temperatures and reduces disturbing road noise, offering you're a quieter more enjoyable ride.

e) Tire and Rim Protection

This includes flat tire repair, replacing irreparable tires or rims if damaged and won't hold air, all related taxes & levies, no deductible, mounting, balancing, installation plus covers original or replacement tires.

f) Rust Spray

Rust not only ruins the appearance and value of your vehicle, it shortens its life and structural integrity. Today's vehicles have many hard to reach places where moisture can collect causing rust formation. Platinum Shield Rust Inhibitor Spray Protection Seals your vehicle's inner body metal surfaces and stops rust perforation from the inside out.

g) Corrosion Control Module

Corrosion Control Module is the ultimate solution in the fight against rust. A pulse amplifier microprocessor generates a repetitive pulse surface current, distributed to all grounded body panels thereby, protecting other areas such as the roof and inseams that conventional products cannot reach.

The Corrosion Control Module draws a small amount of DC energy from the vehicle's battery and directs it through a microprocessor, which converts this energy into an AC current.

Through patented state of the art technology built into the Corrosion Control Module, a pulse amplifier (another microprocessor) generates a repetitive "pulse" surface current, which is distributed on to conducting (grounded) body panels of the vehicle (travels on the surface of the metal) to help inhibit the corrosion process (slows down the oxidation process).

Being energy efficient, the Corrosion Control Module is built with "Smart Circuit" technology to insure that when the battery voltage is low, you are not put into a "no start" situation.

The Module is mounted in the engine compartment of the vehicle with a Velcro pad and is powered by the existing 12 volt car battery. Actual size of the module is 8 cm x 5.5 cm x 2.2 cm. Grounded body panel to create surface flow. Externally fused to protect the unit from power surges, the Corrosion Control Module has been tested to exacting standards by world-renowned certified testing laboratories.

h) Maintenance Kit

The Maintenance Kit will noticeably extend the life of your vehicle's appearance when properly maintained. It includes; a Paint Cleaner, Car Wash Concentrate,  Premium Leather Conditioner,  Spot Remover,  Chamois and  Applicator Sponge.

Security Protection

a) Vehicle Identification Code

A non-removable, police traceable identification code is permanently etched on all the major glass of your vehicle or imprinted onto selected body panels of your vehicle. The identification code is registered into a national database that is cross-referenced to the manufacturer's Vehicle Identification Number (VIN), the selling dealership, and the vehicle's owner.

b) Warning Decal

Visible warning decals on the driver and front passenger windows identify the vehicle as being registered with a national theft prevention company. These decals warn thieves that the vehicle's key components are marked.

c) Theft Recovery

Security Protection also aids in recovering stolen vehicles and assists you with related expenses. The Platinum Security Protection system discourages thieves from stealing marked vehicles.

d) The Nitrogen Tire Inflation Safety Program

e)Paint Protection

Paint protection film to help prevent damage such as rock chips, bad weather and salted roadways to your vehicle and headlights. The protection is virtually invisible to the naked-eye, allowing the manufacturers aesthetics to shine through.

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Car Dealership Financing

When you approach the dealership for financing, the first thing your business manager does is to run your credit report and sends your credit information to the lenders they deal with. The business manager then takes the lowest approved interest rate and tops it up with dealership's profit on the financing. There is no law saying the dealer has to show that profit to you. This is why you have to do loan and price research and have a benchmark for negotiations! Be equipped with some business lingo that might be used to take advantage of you.

Zero percent APR (Annual Percentage Rate)

Also known as zero percent interest. To good to be true, isn't it? Not everyone can get 0% APR, because it applies to those with a good credit score to ramp up sales on select models. The chances are high that model for which it applies is not the car you want. Very often 0 % APR is applies to short-term loans (not exceeding 3 years) only.

Consumer Rebates

The manufacturer gives rebates to consumers directly on certain models, so this shouldn't come up during price negotiation with the salesperson. It is not part of the dealer's package.

Simple Interest

Also called "flat rate interest," simple interest is calculated only on the total amount of the loan by multiplying the principal balance by the rate of interest by the term of the loan. This number is then divided by the number of months of the loan for the amount of interest paid each month. This is the best option for you and should bargain for this.

Compound Interest

Compound interest requires you to pay more interest at the beginning of the loan period than at the end. The longer the term of the loan the more interest you will pay. This is only good for short-term loans.

Base M.S.R.P

A short form for Base Manufacturer's Suggested Retail Price. This is the manufacturer recommended retail for a particular model as delivered from the factory. It does not include items the dealer has added such as security systems, Vehicle Identification Number etching, etc.

Base M.S.R.P Plus Options

This price includes the Base M.S.R.P. plus all options added at the dealership. The options range might include, finance protection, Vehicle protection and  Security protection. The sales person will always try to sell you these options because that's where they make the most money. Only accept what you can afford and in your view is necessary. Don't stretch your pocket too much!

­While negotiating for a financing deal with the business manager, you should bargain on the chargeable Interest rate, duration of the loan, down payment, rebates, and monthly payments. Ask about early repayment penalties and nature of interest(should stay the same for the loan duration). If you can't get a good deal, walk away! You can always get it elsewhere, but don't compromise too much for the sake of completing the deal. If you do, you will be exerting a strain on your finances.

Once you have agreed on these, verify your contract terms and only sign if satisfied with all the numbers and filled out correctly.

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Vehicle Financing

Buying a new 'ride' always comes with a bit of excitement and it's always a hastily concluded process. This level of urgency to drive home in a new car often times works against you as revealed here. If you love your car as I do, you might want to slow down a bit and take a deep breath.  A decision to get a new car should not come as a result of seeing a TV commercial or seeing a cool car at a dealership showroom. Consider your expected use, work out your budget, which type car fits your budget and how to finance that particular car. Do some research from the manufacturers websites, visit car dealerships to scout for favorable car prices to help you make an informed decision. Take your time to gather as much information as possible and workout your numbers. Once you have decided which car fits your budget, then choose the financing model.
There are several ways  of paying for your new car. Each has its pros and cons. You just have to figure out the best possible option for you based on your current financial position. You could choose to; 

Pay cash from your savings for the new car 

Not a bad idea at all, isn't it? As great as it might sound, it is not always your best option especially if you are going to deplete your savings account buying the new car. You might also prefer to use your savings to start up a profitable business to eventually pay off your car loan. 
On one hand, if you have a bad credit history, you might choose the cash option to avoid paying a huge interest on the loan and damaging your credit rating even further.

Auto Leasing

In auto leasing, you use a motor vehicle for a fixed period usually in years at an agreed amount of money for the length of the lease. The period is normally 1-4 years and once the lease expires you return the car to the dealer for disposal. So literally, you can drive a new car every few years! Lease payments are usually much lower and the qualification process is easier than obtaining a car loan. The car lease agreement though comes with certain conditions; maximum allowable mileage per year(usually 10,000 miles), allowable wear and tear, early lease termination fee, etc. Beware penalty fees may apply if you violate the lease agreement. Work out what is best for you basing on the projected use and if possible negotiate for a higher mileage for a slightly higher lease payment if necessary to avoid penalties. You can also opt in for a lease with maintenance; excluding fuel and insurance to save yourself the headache of breakdowns and regular maintenance. Newer vehicles, however, require less maintenance. So it is not worthwhile paying extra unless you make frequent long trips. This option is good for businesses and large companies. 

Auto Loan

You can get a direct car loan from a financial institution or individual, namely; a bank, credit union, online lending institutions, a relative or indirectly from a car dealership which deals with financial institutions on your behalf. 
If you have decided to finance your car by loan and not pay cash, then you need to do some research to get the best financing deal. It is best to begin with your bankers since you already have an established relationship with them. Your banker will often give you a competitive rate, tell you if you're paying too much for a car, give free life or disability insurance with loans; and the loans are usually simple interest loans (whose interest is evenly spread throughout the term of the loan).

If you own a home, you can free up tied up equity to finance a new car. This is however risky since you could lose your home if you default because a financing bank or individual retains a lien to the home until the debt is fully repaid.

Car dealerships often give a fast, convenient and competitive option. Be ready for a big sales push on add-ons; loans are often compound interest loans (You pay more interest in the beginning of the loan than towards the end). It works against you if the loan servicing period is longer. Always negotiate for a good interest rate rather than a small repayment installment. If you negotiate for a small repayment installment, the your business manager instead extends the term of the loan in which you pay more for the car.

If you can get a loan from a friend or relative, so much the better, because this option offers very flexible terms and payment period. It is not always possible though to get very big sums this way. In any case, care not to jeopardize your relationship with them. Be truthful and pay off your obligation to them.

I do not recommend financing through online lending institutions because there are more scams than legitimate ones. So beware! Be very cautious if you choose this option! Only deal with them if you know them well!

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The "Monster", Debt

Are you swamped up in debt? 

If you answered yes, you are not alone! Kind of reassuring, or is it? Not at all! For those of us who know what debt can do, it's never an easy thing to deal with. Before I delve into the core issue of this article, let me begin by  explaining what debt is. A debt is what you owe another party who could be a friend, family member, city council, state, company, bank, institution, etc. You can get debt in form of money, assets, tuition, loans, bank overdrafts, taxes, rent arrears, mortgage, etc. The list is endless! In today's world, we can almost access whatever we want on credit; a nice house, a cool ride, the latest smart phone, interior furnishing, tuition, shopping,...You can go on and on! How we go about this "monster" called credit can determine whether we drown in debt or not!

Is debt a nuisance?

I will answer this question with another of its kind. Why do we go into debt? We go into debt just like governments and big corporations, to access resources to enable us meet our obligations and build capacity. This could be paying off rent or a mortgage and in other cases to build a viable business. The  reasons for going into debt are always good intentioned in most cases but somewhere along the way we lose our financial discipline and get entangled deep into debt! Otherwise, we live with debt and "debt is our good friend"! Things you could work for a lifetime are achievable through debt in the short run! Governments and corporations borrow to build economies or massive investments. In the same way our dreams of building successful companies, nice homes or driving a dream car come to life because of debt well-managed. A friend of mine once said, "the secret to success is debt" - a notion I thought was ridiculous then, but not anymore. Debt is a necessary evil!

How do we get entangled into debt?

It's very easy to unknowingly get entangled into debt if you do not exercise caution. The temptations to get into debt are so many today. These include among many; mortgages, phone plans, auto loans, health insurance, overdraft and credit card debts. Let alone the providers of these services will virtually find you anywhere; at work, home or school to bring you up to speed on the latest attractive offers! You do not have to seek for "debt", it will find you! I remember a colleague at work who took a loan he was not ready to take just because a bank agent pitched him while at work. The loan turned out to be disaster for him! So it is important to remember credit is never your money until you have earned it!

Worth noting too, the companies that offer credit services promise manageable and flexible repayments yet claw on your monthly salary or revenues for a protracted period of time. Unless you understand that living in debt is living a lifestyle you are yet to attain, you might not know how to keep your debt to manageable levels. The biggest victims are normally the employed. Citing meager salaries with a pile of responsibilities, they resort to taking loans by way of bank loans, credit cards loans, tuition loans, mortgages, etc to meet the current demands. The size of the repayment installment is often very flexible and manageable that we overlook other financial obligations that we have while making decisions to get more debt. For instance, while still single, you might have obtained a 20 year mortgage loan and during the course of servicing this loan, you get other short-term loans such as auto loans, phone plans, credit card loans, etc. This might seem OK and very manageable at that time, but when you get a family, the responsibilities bulge up and squeeze out the little left after your debt obligations. Survival becomes hard and stressful to the family because of not having enough disposable income. Borrowing more(usually from friends, relatives, etc) always seems the obvious interim solution, instead it shrinks your income even further - burrowing deep into debt! 

Categories of debt

There are two categories of debts; Priority debts and Non-priority debts. Priority debts always carry serious consequences if you default. You could lose property or serve a jail term. Such debts include, state taxes, mortgage, rent arrears etc. Defaulting on state taxes might amount to a jail term while defaulting on rent or mortgage might lead to loss of a home.

Non-priority debts carry less severe consequences if you default. These are debts from colleagues, friends, relatives, bank over drafts, etc. They do not adhere to strict deadlines for repayment. As a debtor you decide which debts are of a priority nature and deal with them first. Keeping record of your debts is very important for budgetary planning purposes.

For all kinds of debt, it is always important to keep in touch and explain to your creditors your financial situation and your plan to sort out your issues. This can save you from costly legal action and possible loss of properties.

Forms of Debt

There are several kinds but the following are most common; atleast everyone one incurs in their lifetime.

• Auto loans and insurance
• Bank loans and overdrafts
• Credit card loans
• Mortgage and rent Arrears
• Health and life Insurance
• State and council taxes
• TV and media license
• Utility and Phone bills
• All forms of borrowings from colleagues, friends and relatives
• Payday loans
• Student loans
• etc

For details about each of these categories, follow the links for an in depth coverage. 

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