Tag Archives: negotiation

Buying a New Car? Cash Rebate vs 0% Financing Spreadsheet

I think the toughest part about buying a new car is selecting a model. When I searched for my most recent car, it took me months to figure out which one I wanted. I even feel like I settled on my Chevy Malibu because I was just tired of shopping. Whatever car you end up selecting, there comes a time when you have to choose between the cash rebate and the super low financing rate (typically 0%).

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Cash Rebates

Cash rebates are exactly what they sound like. Many automotive companies offer cash back when you purchase one of their new cars. If you see a commercial for a new car that offers $2,000 cash back, you can expect at least $2,000 off the MSRP. There are several types of rebates so make sure you know about all of them. You can get rebates for being a recent graduate, being in the military, etc. Make sure you negotiate the lowest price before mentioning any rebates. This will ensure you receive the best deal possible. You can find a list of current rebates at this site.

Special Financing

Many companies also offer the chance to get great financing rates through their company. Many companies, especially right now, offer 0% financing for a couple of years. Even if they do not offer 0% rates, they usually still offer rates lower than you can get through traditional banks.

Which Offer to Choose

Now comes the part where you need to figure out which one to choose. Here are the options which you will need to pick from:

1. Pay Cash for the Whole Car

In this case you should obviously take the cash rebates. You should also be proud of the fact that you will own the car free and clear. Congratulations!

2. Take the Cash Rebate and Finance the Car at an Outside Bank

With this option, you need to figure out if the amount of the rebate will be greater than the amount of the interest expense of the outside loan. For example, let’s say you need to borrow $15,000 for the new car and you can get a 60 month loan at your credit union at 5%. Over the term of the loan you will pay $1,984 in interest. So for this example, if the rebates are greater than $1,984 you should take the rebate and finance it at the outside bank. You can search for auto loan rates in your area at Bankrate.com. Also consider joining a credit union. They always seem to have great rates. You can use the spreadsheet at the end of this post to calculate the interest expense. It will also tell you which option to choose.

3. Pass on the Cash Rebate and Finance the Car at the Special 0% Rate

If the rebates are smaller than the interest expense you calculated for #2 (using the spreadsheet at the end of this post), you should use the 0% financing (assuming you qualify).

I should note that many companies are offering cash rebates PLUS 0% financing right now due to the economy. If that is the case, you should obviously take both.

Spreadsheet to Help You Choose

Use the following spreadsheet to help you choose the best option for you. Be sure to read the comments in the spreadsheet so you get all of the numbers in the right spot. Enjoy!

How to Get Free Auto Insurance Quotes and Purchase Online

Every six months you can find me surfing the web for auto insurance. Call me weird, but I always need to know I am getting the best price. If I had to guess, I would say that I have changed my auto insurance carrier seven times over the past nine years. Is that bad or am I just a good shopper? Anyway, I thought I would share with you my routine for shopping for auto insurance and things to look for. Currently, I am with Progressive and I have been pleased so far. Please keep in mind that none of these companies paid me to write about this. I also do not receive anything if you visit their site, so please feel free to visit them!

Check Your Current Policy

When six months rolls around (sometimes sooner), I will double-check to make sure that the coverage is still what I would like it to be. If for some reason the company lowered my limits, I make sure to get a new quote for the coverage amounts that I like. Here are the coverage amounts that I currently carry:

Bodily Injury Protection: $100,000 per person / $300,000 per accident

Property Damage: $100,000 per accident

Uninsured Motorist: Same limits as personal protection

Medical: $2,500

Comprehensive: $50 deductible

Collision: $500 deductible

I keep the bodily injury quite high because the cost of medical care is high. It’s that plain and simple. I will never buy less than $100,000 in property damage due to the high costs of vehicles today. For example, if I were in an at-fault accident with two other SUV vehicles, I would have caused damages (considering both were totaled) of around $50,000 if I am lucky. I really do not want to have to pay for any additional amounts out of pocket. I just keep the uninsured motorist coverage the same as my personal coverage due to the same reasons above.

In regards to deductibles, I keep my comprehensive very low because it just does not cost that much more to have it close to $0. Also, why have a $500 comprehensive deductible when you will use it for mostly inexpensive things? In terms of the collision deductible, I would like to have the deductible at $1000 because I could save around 15% on my policy. However, my credit union forces me to have at-the-most a $500 deductible. Anyone else have that problem?

Before you move onto the next section, make sure you obtain a new insurance quote from your current carrier. Their pricing structures may have changed.

Time to Start the Quotes

I typically have several sites that I check every few months for auto insurance. In this section I will list the sites that I visit and my general experience (price, obtaining a quote) with them.


As I mentioned before, Progressive is my current carrier. So, far I have had a good experience with them. They were my carrier several years ago as well but of course, they were outbid a few months later so I switched. Obtaining a quote from Progressive is very easy. All you have to do is enter a few bits of information and you are all set for an accurate quote. They even offer to show you the prices of some of their competitors. However, I have never gone off of what they said. Can you really trust another insurance company to give you a quote for another company? I would rather do the digging myself. One of the main reasons I decided to go with Progressive is their MyRate Program. This program is for conservative drivers like myself. You basically install a tracker in your car that measures your distance and time traveled as well as your braking and acceleration. It then compares your driving to others in your rate class and gives you a discount accordingly (that is if you are below the average). My discount so far is about 5% at renewal (I have only been using it for a few weeks). All in all, I would recommend Progressive to anyone.


Before Progressive, my auto insurance carrier was Geico. They are well known for their commercials with the gecko. When I first purchased a policy from them it was very easy. Their quote system is very similar to Progressive. I only switched from them because Progressive’s quote was about $100 cheaper for six months and I also wanted to try the MyRate program. If you happen to find a cheaper quote with another company, make sure you call your current company first and see if they can negotiate with you on the price. Most companies will be willing to do this with you rather than see you go.


Esurance is a fairly new auto insurance company. They are the ones with the animated (which I think are a little corny) commercials. Since the commercials are animated, I guess it allows them to produce cheaper insurance. I used Esurance for a few months and their quotes were quite low compared to some others. However, when I moved to Texas, their rates became more expensive and I could no longer use them. I would encourage you to check them out. They are very competitive right now and it does not hurt to get a quote.

State Farm

I have heard very good things about State Farm and their service. However, every time I get a quote there, they are always way more expensive than some of the others. I am talking about 25% higher. Maybe it is because I am in a strange rate class right now (young male). You may have more luck than me so be sure to check them out as well. Even though I never get a great quote from them, I still check. If you are someone who needs personal service, you may want to purchase from them even though they may be a fraction more expensive. They have many agents that you can see in your area.


My first insurer was Allstate. Looking back, I could have probably saved quite a bit of money had I shopped around before I went with them. However, everyone in the family used them and I figured why not. I really did not know much about auto insurance back then. As soon as I went to college and became interested in personal finance, I started shopping around and got some pretty good deals. Allstate has quite a few good features such as accident forgiveness, deductible rewards, etc., but most of them are just a gimmick and add additional costs to the policy. Every time I quote with them now, they are even more expensive than State Farm. However, your circumstances may be different so be sure to at least get a quote from them.

Those are all of the companies that I get a quote from. I know there are probable plenty of other companies, but by the time I am done with quotes for these few, I have reached my maximum utility for auto insurance. There more than likely was a quote that I was comfortable paying for.

Time to Buy!

When you find a quote/company that you like, they make it very easy to purchase. Once you receive a quote, they automatically give you the option to purchase the insurance on the spot. Many companies even give you a discount for buying online.

Other Things to Consider

I figured I would give some additional brief tips to help you save some money on auto insurance.

1. Keep all of your policies with one company. If you have your homeowners, umbrella, renters and auto policy all at the same company, you will receive a discount on all of them.

2. Increase your deductibles. If you are allowed by your finance company (if you finance), raise your deductibles in order in increase your savings.

3. Find some discounts. Many auto insurance companies offer different types of discounts. They range from being a good student to belonging to a union. Make sure you ask your company if you are getting all of the discounts you are entitled to.

4. Drive a low-profile car. Drive a fast car? Chances are you are paying more due to that fact.

Anyone else have a company that they have used in the past? Did you get some good quotes from them?

How to Get Out of an Apartment Lease

In a past post, I talked about my inability to negotiate with an apartment complex. In that circumstance, my lease expired and I was trying to stay there at the same price for the remaining 3 months I was going to be there. Unfortunately, they said that there was nothing they could do and I paid the 17% increase for those 3 months. But what if you need to terminate your lease BEFORE it expires? Resonably priced apartments can become very unaffordable when you lose a job. If you break a lease, many times you lose your deposit, you must pay next months rent, or you may have to pay a percentage of the amount remaining on your lease. Sometimes this can be a substaintial amount. In our personal situation, we would have to pay 25% of the remaining rent on our lease if we were to move out. Given that we have 6 months left, we would owe them over $1500 just to move out. That’s quite a wallet emptier! Here are some ways to work around some of these leases. Many may not be applicable to you, so it’s best that you check your lease document or talk to the apartment manager.

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Negotiate Your Remaining Lease

Although I have had lots of bad luck with negotiation, you may fair better. Speak to your landlord and tell them your unique situation. Let them know that you have every intention on staying but since your circumstances have changed, you may not be able to make the whole payment. You may be surprised to see that the landlord will be willing to agree on a slight reduction in your rent. Sometimes it’s more cost efficient for them to reduce your rent rather than pay to evict you and search for a new tenant. This may be easier in an area that has slow growth rather than rapid growth. If the landlord has 10 people in line waiting to get your apartment for a higher rent, they will evict you in no time. If they do decide to negotiate with you, make sure you get it in writing!

Find Someone to Take Over the Apartment

There are two ways for this to happen: you can either sublease or have the new tenant assume the lease. A sublease allows you to rent the apartment to another person. They basically replace you in the apartment and begin making the required rent payments. With a sublease, you are still obligated to pay the rent if your subtenant fails to pay. These types of agreements are hard to come by. In the two complexes I have lived in, neither have this clause in the lease. If allowed, the landlord will more than likely have to approve the new tenant.

When a new tenant assumes your old lease, you are free from it for good. They basically just sign a new lease from the landlord for the remaining time that was on your lease. If the neglect to pay, the landlord will not look to you to pay. In my opinion, this seems like the more logical choice, especially for the landlord. They will be able to get a new tenant to replace you and they have the opportunity to choose the person.

If All Else Fails

If none of those options worked, you may just have to break the lease. You should first evaluate the financial consequences for such a move. For example, let’s say you have 6 months left on your lease and you are having trouble paying the $600 rent (you can only afford $500). In order to move out of this apartment and into a more affordable one, you must pay $1000 in additional rent to break the lease. That does not make financial sense because you are paying $1000 to get out of $600 in additional rent ($100 x 6 months). You should stay in the apartment and just find additional ways to pay the rent, even if it means putting the additional $100 a month on a credit card (just the $100!).

Also, be sure to give the landlord an appropriate amount of time to find a new tenant or they may slap more fees on you. You also want to make sure the landlord is trying to rent the property. If you told them that you need to move out and they are not actively searching for a new tenant or allowing you to sublease, you may a defense if the landlord tries to collect additional rent (fees) from you.

The Age of No Negotiation: Credit Card Edition

As many of you may know, I have ranted before about how you cannot negotiate many things these days. I have had trouble negotiating for a bike at a big box store. After that, I had trouble negotiating my lease at my apartment complex. I am just so tired of businesses not wanting my business. The other day I ran into this problem again with my credit card company (Citi). As many of you may already know, Citi (as well as many other credit card companies) have begun to increase interest rates on all of their cards. Even for those who have been great customers like myself (I made them a lot of money). My rate with them was about 6% and they wanted to increase it to 16%. Now that’s what you call an increase!

So, I got a letter in the mail from them stating that they would increase my rate to 16% if I did not contact them by a certain date. The letter also said I had the option to keep my current rate but there was a catch. In order to keep my current rate, I had to have the card paid off in full by the expiration of my card (June 2009) and then they would close the account for good. I have quite a bit on the card so an increase in the rate by 10% would increase my cost of credit immensely so I figured I would call them and try to work something out. The lady on the other line was very friendly but she said there was nothing that they could do. You had to chose one or the other. I asked to speak to a manager and she said that they would not be able to do anything for me either. She already had several other people requesting a manager for the same thing. I then told her that they were going to lose a customer from all of this and she just did not seem to care that I was leaving them! I told her I would have it paid off by June and to close my account.

I just do not understand what companies are thinking these days. I know the credit market is bad right now, but do you really want to lose a great customer like me? If I were Citi, I would rather keep a good customer and earn a slightly lower interest rate then lose them all together. Especially a customer like myself. I have been with them for about 5 years and have never missed a payment. The went from making some money from me to none at all. I just do not understand!

Has anyone had the same problem with a credit card company? I have always had good luck with them in the past but not now!

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The Age of No Negotiation: Apartment Edition

In my recent post, The Age of No Negotiation, I talked about my experience dealing with a big box department store. Of course, they were out of stock of the advertised item that I wanted. Being the person that I am, I asked them to extend the sale discount on another more expensive model. They said NO very fast and I left the store without giving them my money. The same sort of thing happened to me today at my apartment complex.

After returning to Texas from my trip home to Pennsylvania, I had a note hanging on my apartment door. The note stated that my lease will expire on October 31, 2008. They offered me to extend my lease for 12-14 months for the same price that I pay now ($495). However, I graduate in December of this year so that is not possible. If I do not extend my lease, they ‘allow’ me to remain on a month-to-month lease for $580 a month, an increase of 17%.

Once again, being the person that I am, I went over to the office to explain my situation. I told them that I wanted to stay until December for the same price that I am paying now. They immediately stated that they could not do that. I even reminded them that I have always paid on time, never had a check bounce, have no complaints against me, and I would continue to live there until December. They said that none of that matters because that it is their policy. I even reminded them that the apartment would be empty and at least with me, they would receive some sort of money. Once again, they said there is nothing that they can do as it is in their policy. I was even talking to the manager! I really do not understand what some people/companies are thinking! WHY DON’T THEY WANT MY MONEY!?!

I’m not really sure what I am going to do. I could bite my tongue and pay the increase but it would reduce the amount that I use to pay down debt. I also have some friends that would probably let me live with them on the cheap for the two months. What do you do if you were in my position?

The Age of No Negotiation

Back in the day when I worked in a department store, we had this one manager that was extremely passionate about making sure that the customer was take care of. I even remember one occasion where a customer brought in a 10 year old item that stopped working. The customer was upset (I would not be if something lasted me that long) and the manager made sure they were taken care of. The customer left with a smile on their face and a brand new item in the hand. Now that is what customer satisfaction is all about.

I told you that story to get to something that happened to me in a store the other day. I went to a local department store, let’s call it BullsEye, to look at a hybrid bike that they had in their ad. It was $199 down from the regular price of $220, about a 10% discount. I had my wallet in my hand and the money was practically in their cash register. Of course when I got their, they were sold out and offered me a rain check. The spontaneous person that I am, I noticed another bike that was rather similar and it was regular price for $249. I asked the salesperson to speak to a manager and they arrived shortly thereafter. I told them that I was looking to take home a bike today and reminded them that the one in the ad was sold out. I told the manager that if they were willing to knock 10% off the price of the $249 bike, then I would give them my money and be on my way. She quickly said no and then walked away! Are you kidding me? Since when doesn’t a store want money?!?

Needless to say, I left the store without buying anything and I really don’t know if I ever want to go back. Are we now living in a age where nothing is negotiable? I have been reading You Can Negotiate Anything by Herb Cohen (which you can find in my recommended reading section), and I am beginning to wonder if he was wrong. It didn’t seem to work for me!

This post was more of a rant than anything, but I want to see what other people have been experiencing. Have we now become a world where customer service doesn’t matter or are the store managers just improperly trained? If I was in that managers position, I would have given the customer the discount. I would rather lose $25 on one sale then lose hundreds later because they never came back to shop at my store.

Has anyone else experiened anything like this lately? Has anyone had great customer service to the point where it is the only place you shop now?

photo by: gak