This document provides advice and guidance for buying a used car. It discusses how new cars quickly depreciate in value, with the average car losing 80% of its value in 6 years. It also outlines total driving costs based on miles driven per year. The document cautions that car payments should not exceed 25% of one's net income and provides a table showing recommended maximum payments by military pay grade. It notes that options like loans, rent-to-own, and payday loans often have high interest rates and fees. The document emphasizes doing thorough research and considering one's full financial picture before taking on a new car purchase.

1. Life Hack:
Buying a Used Car
© Wise Rides 2015
Presented by
Drive. Smart! ™

2. First Let’s Understand Inflation
A house purchased in 30 years ago for $100,000
A house sold in today sold for $220,000
What is the profit? ZERO Why?
INFLATION!

3. Understanding Car Depreciation – A NEW CAR
New Car- $ 33,650
1 Minute (.09) - $3,163
1 Year (28%) - $7,740
2 Year (20%) - $6,730
3 Year (16%) - $5,384
4 Year (8%) - $2,692
5 Year (6%) - $2,019
6 Year (5%) - $1,682 Total 6 Year LOSS – $26,247
Car value loses
80% in 6 Years

4. Understanding Your Total Driving Cost
Based on AAA 2014 Annual Survey
$0.46 per Mile
$6,956 per Year
$0.61 per Mile
$9,151 per Year
$0.75 per Mile
$11,248 per Year
$0.77 per Mile
$11,599 per Year
$0.65 per Mile
$9,795 per Year
Life Hack:
Walk before ride and
ride before you buy!

5. What You Can Expect for Loan Terms
Good credit 4% and risk up to 8.7%... But we hear war stories more
than 20%! As long as the dealer discloses the interest: IT IS LEGAL!
A longer term with smaller
payments is ALWAYS going
to cost you MORE!

6. How Interest Rate Effect YOU!
Loan Rate Payment Interest Paid Total Spent
10,000$ 4% 184$ 1,050$ 11,050$
10,000$ 6% 193$ 1,599$ 11,599$
10,000$ 8% 202$ 2,165$ 12,165$
10,000$ 10% 212$ 2,748$ 12,748$
10,000$ 12% 222$ 3,346$ 13,346$
10,000$ 14% 232$ 3,960$ 13,960$
10,000$ 16% 243$ 4,590$ 14,590$
10,000$ 18% 253$ 5,236$ 15,236$
10,000$ 20% 264$ 5,896$ 15,896$

7. Pay Grade vs. Debt
Rank based on realistic promotion timeline (E5 at 3 years, E6 at 4 years, E7 at 10 years). Car expense should be no more than 25% of net income (15% to payment and 10% for maintenance).
Rank Pay
Recommend
Max Payment
Maintenance
Budget
Total Auto
Spend
E-1 $1,546 $231.90 $154.60 $386.50
E-2 $1,734 $260.10 $173.40 $433.50
E-3 $1,823 $273.45 $182.30 $455.75
E-4 $2,019 $302.85 $201.90 $504.75
E-5 $2,464 $369.60 $246.40 $616.00
E-6 $2,876 $431.40 $287.60 $719.00
E-7+ $3,747 $562.05 $374.70 $936.75
Life Hack: Don’t let car payments define your life!

8. Other Finances to Consider
Before a car
• Food
• Cell
• Cable
• Clothes/Haircuts
• Entertainment
• Savings
• Child Support
• Toiletries
• Smoker?
• Drinks?
• Credit Cards/Loans
After a Car
• Gas
• Insurance
• Tax, title, and delivery fees
• Car Maintenance
• Registration and emissions

9. Other Financial Pitfalls to Avoid
Pitfalls
• Payday & Title Loans – over 70 companies in the Killeen market
• Rent to Own – over 20 companies in the Killeen Market
• Pawn Shops – over 22 companies in the Killeen Market
• BAH/BAS mishandling
If you pay in cash your credit score is irrelevant!

10. Financial Support and Resources
Safer alternatives:
• Army Emergency Relief - (254) 287-8908/8979
ATTN: AFZF-MWR-ACS-AER/Bldg. 121
761st Tank Battalion Avenue
Fort Hood
• Army OneSource
• Army Community Service
• Consumer Affairs
• Solicitation Office
• Consume Affairs and Financial Assistance Program(CAFAP)
• Command Financial Specialist

11. The Hard Math…
Remember the guidelines? What is your needed down payment?
(and that’s assuming you have an above average credit score!)

12. The Hard Math…
As a E-3 you would need to put $16,750 or about 52% Down!

13. Group Discussion
Car Buying War Stories

14. Thank you!
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@WiseRides
Drive. Smart! ™
www.wiserides.com
info@wiserides.com