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Buying a “new” used car

MMI Copywriter

By Kim McGrigg, MMI Community Manager

Of all the major purchases people make in their lives, few are more emotionally-driven than buying a car. Even though their car is the most important piece of machinery most people own, the reasons they give for choosing a certain model often boil down to appearance, speed, and prestige. From a strictly financial point of view, however, these factors carry almost no weight at all. When purchasing an automobile, it is important to remember that a car is a tool that provides safe, comfortable, and efficient transportation.

Many people choose to buy a used car since they can be less expensive. In fact, it’s been estimated that, on the average, a new car loses up to 25 percent of its value the instant you drive it off the lot, which means that a fourth of what you pay for a new car is solely for the privilege of buying it new. Still, you must be careful that you are not buying someone else’s problems. The key is to do your homework. Following are some tips for purchasing a new, used car:

Determine what you can afford. Review your spending plan and determine how much you can allocate towards transportation. Don’t forget to consider the price of gas, insurance, registration and maintenance.

Know what the vehicle is worth. There are many resources to help you determine how much a car is worth. For example, you can research used car values at Kelley Blue Book’s Web site

Get the facts. Ask the seller why they are selling. Also request records from maintenance or repair work. For peace of mind, you can also order a full report on the vehicle’s history. To do this, jot down the Vehicle Identification Number (VIN) and enlist the services of an information provider, such as CARFAX.

Have the vehicle inspected. The most important consideration when buying a used car is its mechanical condition. You may want to have a mechanic you trust take a look at any car you’re seriously thinking of buying. If the seller won’t let a mechanic of your choice inspect it, they’re probably trying to hide something, so you may want to look elsewhere.

Most important, don’t jump at the first car you see. Keep your eyes open for bank repossession sales or auctions. Take your time and make sure the car is in top condition for the lowest possible price. If you’re patient, you could end up with a diamond in the rough.

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The five-minute budget: Simple steps for organizing your financial life


A good budget lies at the foundation of every successful financial plan. A budget will help you prioritize your spending and stay within your means. Although a solid budget and spending is vital to a successful financial future, many consumers admit to not having one. According to a national survey conducted by the National Foundation for Credit Counseling, over 50 percent of Americans do not use a budget to monitor their expenses.

Developing a sound financial budget is something every household should do. Following are tips to help you get started.

Commit to change. The first thing is to examine your attitude about money and your relationship with spending. Make a firm commitment to change your money management behavior. Visit and take the pledge to take steps to better your financial well-being.

Keep it simple. A budget should include both monthly and daily expenditures. Make a list of all fixed monthly expenses such as rent/mortgage, auto loan payments, and any other expenses that are not likely to change. Then make a daily list of everything else you spend your money on. Include everything from your daily cup of coffee to gas for your car. This will help you monitor and control your spending.

Creating and maintaining a budget is that simple – it’s a matter of creating a plan for your spending and staying committed to that plan. There are many other things you can do to stay organized and simplify your financial life, but two very important steps include:

Track your spending. Carry a pocket size notebook and track every penny you spend for a month or two--from the packs of gum to vending machine snacks to lottery tickets. At the end of the month, examine your spending and determine which areas can be cut back to create surplus. You’ll be surprised to see how much money is being spent on items that could be easily sacrificed.

Make it automatic. Having money automatically deducted from your checking account into a savings account helps to ensure that you meet your savings goals. Even better, if your employer has the capability to automatically deposit your paycheck, have some of the funds directed into a savings account.

Additionally, MMI offers many online tools and resources to help consumers budget. Check out our free financial webinars to learn how to assess your financial situation, set financial goals, create a budget, and commit to a savings plan.

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Money Management International (MMI) is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling and debt management assistance to consumers since 1958. MMI helps consumers trim their expenses, develop a spending plan and repay debts. Counseling is available by appointment in branch offices and 24 hours a day, 7 days a week by telephone and Internet. Services are available in English or Spanish. To learn more, call
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