The other day I was driving around with some friends and we were hungry and in a bit of a hurry. To save time, we decided to call in our sandwich order at one of my favorite local delis. Not having the number on hand, I called 800-GOOG411 which is a service Google provides for free directory assistance. The process is completely automated, does an excellent job finding the listing you want in the city you want, and connects you for free (they also will send you a text message of the requested phone number if you so desire). For those that like to text message, you can also use Goolge SMS.
Enjoy!
Franco
Sunday, July 20, 2008
Tuesday, July 15, 2008
Buying Used Cars
Hopefully, after digesting one of my previous posts, some readers have decided to explore the wonderful world of used cars. Congratulations on you big leap out of the man's propaganda campaign and into the more sensible Franco's Army...the frugal, non-football version (on a side note, I only joke about "the man" because I find it funny. I'm a true capitalist at heart). So what are the most important things to consider when buying a used car? I won't pretend that my list is exhaustive, but here a couple things that have done me well over the years.
The first thing I do when looking for a "new to me" car is check Consumer Guide for independent reviews on different makes and models. Make sure you know what you're getting into by researching and asking people who have owned the car (or at least a similar model) before you pull the trigger. I have a personal bias for German (excluding the JokesWagon) made automobiles because I like the way they handle and feel the engineering behind the car is superior to other automobile manufactures (I've definitely been drinking the Deutschland Kool-Aid). On the other hand, my extended family all (literally on my mom's side) drive Volvos, so it really is just a matter of personal preference. The one thing I would advise is to find a brand/model that has excellent resale value in the used market. For example, even if a BMW is 10 years old and has 130,000 miles on it, some kid going to college will think it is "cool" and will want it. It has been my experience that there is always a strong market for used BMWs selling around blue book value. This was not the case for Mrs. Frugal Franco's fancy-pants VW New Beetle, which had to be sold for 20% below blue book value last year.
The next thing I do is search for cars online. My favorite places to look for used cars are Craigslist, Autotrader, and Cars.com. I typically look for private seller listings because I'm always afraid that all the used cars at dealerships are lemons. I mean, why else would someone trade their car in at a dealership for the "trade in value" instead of selling it to another person? I'm sure there are a good number of people out there who aren't as frugal as me and turn the car in to avoid the hassle of having to sell it, but I still can't get past the lemon bias. Not to mention there are few things I can think of that are more unpleasant that haggling with a used a car dealer (okay, there a lot of things, but it's still not something I enjoy). I have only bought one car from a used car dealership and it is something I'm not likely to repeat. I have yet to try the "new" used car experience at places like Carmax where there is a set price based on the blue book value with no haggling. It sounds like a great concept so I would recommend this to people who just can't bring themselves to buy from a private party. For those that are willing to deal with a private party seller, I highly recommend the following:
The first thing I do when looking for a "new to me" car is check Consumer Guide for independent reviews on different makes and models. Make sure you know what you're getting into by researching and asking people who have owned the car (or at least a similar model) before you pull the trigger. I have a personal bias for German (excluding the JokesWagon) made automobiles because I like the way they handle and feel the engineering behind the car is superior to other automobile manufactures (I've definitely been drinking the Deutschland Kool-Aid). On the other hand, my extended family all (literally on my mom's side) drive Volvos, so it really is just a matter of personal preference. The one thing I would advise is to find a brand/model that has excellent resale value in the used market. For example, even if a BMW is 10 years old and has 130,000 miles on it, some kid going to college will think it is "cool" and will want it. It has been my experience that there is always a strong market for used BMWs selling around blue book value. This was not the case for Mrs. Frugal Franco's fancy-pants VW New Beetle, which had to be sold for 20% below blue book value last year.
The next thing I do is search for cars online. My favorite places to look for used cars are Craigslist, Autotrader, and Cars.com. I typically look for private seller listings because I'm always afraid that all the used cars at dealerships are lemons. I mean, why else would someone trade their car in at a dealership for the "trade in value" instead of selling it to another person? I'm sure there are a good number of people out there who aren't as frugal as me and turn the car in to avoid the hassle of having to sell it, but I still can't get past the lemon bias. Not to mention there are few things I can think of that are more unpleasant that haggling with a used a car dealer (okay, there a lot of things, but it's still not something I enjoy). I have only bought one car from a used car dealership and it is something I'm not likely to repeat. I have yet to try the "new" used car experience at places like Carmax where there is a set price based on the blue book value with no haggling. It sounds like a great concept so I would recommend this to people who just can't bring themselves to buy from a private party. For those that are willing to deal with a private party seller, I highly recommend the following:
- Look for single owner cars. This is the number one thing to look for when buying a used a car. The original owner remembers what that car looked and felt like when it was brand new. They also remember how much money they had to pay for it and therefore do everything possible to keep it looking and running like it did the first day they bought it. There are always exceptions to the rule, but you should be able to spot them as soon as you look at the car.
- Ask for maintenance records. If you are lucky enough to find a good deal on a single owner car, chances are they have all the maintenance records on the vehicle. Check to see if service was done at the dealership after the warranty expired (not a deal breaker but a good indication of how the owner treated the car) and if all the scheduled maintenance was done. On a side note, once I own the car, I hardly ever take it to the dealership and try to avoid the "routine maintenance" if everything is running smoothly, but when you are buying a car, these things are always nice to have (a double standard...I know).
- Push back the clock. A lot of people want to have the latest body style in whatever model car they end up choosing, but the truth of the matter is that manufacturers go years (usually 5-7) without making any major alterations to the way the car looks. I would target the earlier years of a model's 5-7 year lifespan and look for the "older" cars with low mileage and excellent maintenance.
- Take it to the mechanic. This one is really a last resort that I sometimes employ. If you find a car that meets the first two criteria, this step may be unnecessary. If something just doesn't fell right about the car or the person selling the car, then definitely take it to a mechanic or just walk away all together. The $100 you spend having a mechanic look the car over can be recouped in the negotiation phase if anything wrong is found on the car. Running a Carfax report is no substitute for having a professional mechanic look over the car. Not to long ago, I was helping my younger brother buy a car. We found a sweet deal on a convertible BMW that had a clean carfax report. Something didn't feel right about the seller, so I made him take it to a mechanic for an inspection. When the mechanic punched in the VIN number it came back that the car had been salvaged and was "reconditioned." Needless to say, the deal was off and Carfax dropped out of Frugal Franco's favor.
- Always ask why the person is selling the car. While we are on the subject of sketchy used car sellers, depending on where you live there is a growing contingent of semi-professional used car flippers. Typically, this person finds cars at auctions or that have been salvaged, does a shoddy job "fixing" them up, and then prices the car slightly below the market to attract some buyers (a Frugal Franco trap if ever I saw one). When you ask this person why they are selling the car, some will be honest and tell you they flip cars while others may tell you they are moving out of the country or some bogus story along those lines. I would highly recommend NOT purchasing a car from these types of people as the risk definitely outweighs the reward.
Remember, a car is not a good investment, so the more one can separate the need (a mode of transportation) of a car with the desire (I sure would look cool in that new car) to own one, the better off that person will be. For those that still can't get past the new car high or driving without a warranty, may I suggest looking for certified pre-owned vehicles or purchasing a used-car warranty (I'm unfamiliar with these, but think car insurance companies offer them). A certified pre-owned vehicle allows one to skip the worst part of the deprecation curve, while still enjoying a new(er) car with a manufacturer warranty. This is still a spendy option if you have to finace it, but it's the next best thing.
Ciao,
Franco
Sunday, July 13, 2008
eCoupons
A quick note for those that like to shop online (and for those that don’t, you are not fit to wear the “frugal” name). Always remember to do a quick search for online coupons before you checkout. I was shopping at Sports Authority today after I found out that my local Sport Authority would still string my tennis racket for free if I bought my strings off the website. Normally, I purchase the strings at the store, but the website had a closeout deal on $18 strings marked down to $5 (needless to say, I bought a couple). I also found some fancy new Adidas golf shoes (on sale…of course) and an inflatable pool for the Frugal Family to escape the summer heat. Before you knew it, I had run up a triple digit bill. As I was getting ready to checkout, I noticed the little box for coupon codes. A quick search for “sports authority coupons” directed me to Coupon Cabin where I found a 15% off coupon. A mouse click later, I was back at the Sports Authority checkout with a slightly fatter wallet for my troubles.
Ciao,
Franco
Ciao,
Franco
Cost of a new car
Buying a car is a difficult process and one that most people do not take lightly. There are so many variables and tradeoffs to consider…foreign vs. domestic, flashy vs. practical, new vs. used, cup holders vs. a car that parks itself (or something like that). Let’s explore the most important part (or at least it should be) of the decision making process…cost.
A car is the single most coveted pleasure that defines one’s status in life…at least that’s what one would believe if they spent any time watching TV, reading magazines, listening to the radio, or glancing at the occasional billboard. Billions of dollars are spent every year to enforce this message and burn it into our collective psyche. To sweeten the deal, car manufacturers even make this piece of the “American dream” available for no money down and an easy monthly payment. How nice of them.
But after the new car high has worn off, what is left? The answer is a huge old liability. Notice that I said “liability” and not “asset.” It’s not an asset because…well…you don’t really own it yet. But even if a car is owned outright, I would still argue that it is a liability and not an asset because A) it doesn’t produce a cash flow (unless you are running a fly-by-night taxi service in your new whip) and B) it can’t be sold for more than what it was purchased for (unless you are buying a rare classic or something of the shorts).
Depreciation is no one’s friend when it comes to being an automobile owner. Take a quick look at this website (granted it’s a British website, but I’m sure the Queen won’t mind us dropping in for a visit) to get an idea of how quickly the value of that “new” (for a working definition of “new” vs. “used” please refer back to my previous post) car evaporates. In the case of my car (or the new equivalent of my car), over 30% of the car’s value is lost after the first year. The cost of owning a new car is not just the monthly payment, but also the value lost by the newly acquired liability as it is used. A bit of a double whammy if you ask me, but wait…it’s gets worse. :)
At the fear of being called a Debbie Downer, I’ll throw a third whammy out there for consideration. That “easy” payment that you are making every month is incurring an opportunity cost. The money that is going to pay down the debt on the car could be used for other purposes. At the very least, it could be sitting in an online savings account making 3%-5% interest. The income and appreciation that is not being earned on an investment opportunity to make room for that shinny, four wheeled liability is the opportunity cost. Not to pour salt in the wound, but it gets even worse for those who forgo paying down their high interest rate credit cards in order to make the monthly car payment. In that case, the opportunity cost is the interest paid on the credit card debt, which we all know is extremely high.
There are definite advantages to owning a new car, the largest of which is the warranty. I’d love to never have to pay the mechanic every time my car broke down, but how much is this peace of mind worth and how much does it really cost (i.e. the triple whammy). The real question to ask onself when considering a new car purchase is "how much am I willing to pay for the perks (warranty) and the new car high (giving into the man's propaganda)?". Too often people spend beyond their means to purchase (or worse yet finance) a car. This needs to stop! There are plenty of reliable, nice (enough) cars to be purchased for a fraction of their new sticker price.
I use the next post to discuss some these options and a list of do’s and don’ts for the used car buyer.
Until next time…ariva derche.
Franco
A car is the single most coveted pleasure that defines one’s status in life…at least that’s what one would believe if they spent any time watching TV, reading magazines, listening to the radio, or glancing at the occasional billboard. Billions of dollars are spent every year to enforce this message and burn it into our collective psyche. To sweeten the deal, car manufacturers even make this piece of the “American dream” available for no money down and an easy monthly payment. How nice of them.
But after the new car high has worn off, what is left? The answer is a huge old liability. Notice that I said “liability” and not “asset.” It’s not an asset because…well…you don’t really own it yet. But even if a car is owned outright, I would still argue that it is a liability and not an asset because A) it doesn’t produce a cash flow (unless you are running a fly-by-night taxi service in your new whip) and B) it can’t be sold for more than what it was purchased for (unless you are buying a rare classic or something of the shorts).
Depreciation is no one’s friend when it comes to being an automobile owner. Take a quick look at this website (granted it’s a British website, but I’m sure the Queen won’t mind us dropping in for a visit) to get an idea of how quickly the value of that “new” (for a working definition of “new” vs. “used” please refer back to my previous post) car evaporates. In the case of my car (or the new equivalent of my car), over 30% of the car’s value is lost after the first year. The cost of owning a new car is not just the monthly payment, but also the value lost by the newly acquired liability as it is used. A bit of a double whammy if you ask me, but wait…it’s gets worse. :)
At the fear of being called a Debbie Downer, I’ll throw a third whammy out there for consideration. That “easy” payment that you are making every month is incurring an opportunity cost. The money that is going to pay down the debt on the car could be used for other purposes. At the very least, it could be sitting in an online savings account making 3%-5% interest. The income and appreciation that is not being earned on an investment opportunity to make room for that shinny, four wheeled liability is the opportunity cost. Not to pour salt in the wound, but it gets even worse for those who forgo paying down their high interest rate credit cards in order to make the monthly car payment. In that case, the opportunity cost is the interest paid on the credit card debt, which we all know is extremely high.
There are definite advantages to owning a new car, the largest of which is the warranty. I’d love to never have to pay the mechanic every time my car broke down, but how much is this peace of mind worth and how much does it really cost (i.e. the triple whammy). The real question to ask onself when considering a new car purchase is "how much am I willing to pay for the perks (warranty) and the new car high (giving into the man's propaganda)?". Too often people spend beyond their means to purchase (or worse yet finance) a car. This needs to stop! There are plenty of reliable, nice (enough) cars to be purchased for a fraction of their new sticker price.
I use the next post to discuss some these options and a list of do’s and don’ts for the used car buyer.
Until next time…ariva derche.
Franco
Saturday, July 5, 2008
Craigslist & eBay
This post is really just an amendment to my last post as further elaboration is needed on the glory that is ebay.com and craigslist.com. Both of these venues offer great opportunities to get lots of stuff on the cheap and each has a unique advantage over the other.
Craigslist
The history behind Craigslist is quite interesting as it grew out of one man's (Craig, believe it or not) house in San Francisco by word of mouth. The site has remained true to its grassroots with a pure text based website (no annoying, flashing banner ads), a skeleton staff of 24 people, modest profitability, and a refusal to sell out to the man (a la ebay…which actually acquired a 25% stake in Craigslist when one of the former principles decided that selling out to the man was the way to go).
Depending on where you live, Craigslist can either be a feast or a famine. It is most popular in larger, metropolitan areas, especially on the west coast, as these were the first markets targeted during Craigslist’s development. Because of the small staff and communal feel, the site is set up to be self regulated as posts are monitored by the people who use the service. I tell you this to let you know that fraudulent activity can and does occur through people abusing this resource. Use your intuition/common sense when it comes to dealing with other people on the phone or by email. If it doesn't feel right for any reason, don't go through with it.
I like to use Craigslist for big ticket or heavy items that will cost a fortune to ship on ebay or for anything that I want to inspect (like a car) before I buy it. As a rule of thumb, items on Craigslist typically go for less than they are listed for as most buyers have the “garage sale” mentality (e.g. even though a used book is being sold for next to nothing, the buyer wants to get it for half of next to nothing). If you are planning on selling on Craigslist, keep this in mind and try to price your items slightly higher than what you want to sell them for (assuming you don’t price yourself out of the market in comparison to other similar products on Craigslist in your area). Some hard to find or in demand products will go for the asking price if they are priced well, as I recently found out when I purchased a premium used lawnmower and weed eater last summer.
Since Craigslist is targeted at local markets, make the effort to meet the person on the other end of the transaction face to face. This will greatly reduce your chances of getting cheated out of your hard earned money, like the time that Kwame guy from Ghana promised to shares his millions with you. It will also give you a chance to inspect whatever it is you are buying. When you set up a meeting place, make it a neutral site like a shopping center parking lot as it is not recommended to invite strangers over to your house (or visa versa).
eBay
Ebay is a great place to shop online. It has become an ecommerce Mecca for millions of individual business owners and average joes looking to bid on whatever suits their fancy. Unlike Craigslist, ebay listings are monitored, payments are tracked, and members are rated by each other on each transaction. Also unlike Craigslist, ebay is a publicly owned company who is out to make lots of money. Because of this subtle difference, selling on ebay is a bit more expensive than the free option that Craigslist offers.
When you buy things on ebay, always check the seller ratings. Look for sellers with a high overall score, a high positive feedback percentage, and the ability to accept paypal, which enables ebay to track your payments. These three things will greatly reduce your risk of coming up empty. If you are making a larger dollar purchase, there are options such as Escrow.com who will charge a fee to act as an independent third party in the transaction. The third party will hold your payment until they receive confirmation from you that the purchased item has be received at which time they will then release your funds to the seller (as a side note, in all my years of using ebay I’ve never made a purchase that was large enough to warrant such a service).
I typically use ebay for smaller items that are easy to ship. Just the other day I bought a new A/C adapter for my notebook computer for a third of what it would have cost me to buy it direct from the manufacturer. It’s always good to compare the cost of things on ebay to what it would cost to buy the same product from other online retailers. Amazon.com is always a good place to check and you can use resources like Google's Froogle or Yahoo Shopping to compare prices at a variety of smaller online retailers.
I’ve been using both ebay and Craigslist for multiple years and have only been stiffed once on ebay to the tune of $15. I would definitely recommend them to any bargain hunter out there looking to save some coin.
Ciao,
Franco
Craigslist
The history behind Craigslist is quite interesting as it grew out of one man's (Craig, believe it or not) house in San Francisco by word of mouth. The site has remained true to its grassroots with a pure text based website (no annoying, flashing banner ads), a skeleton staff of 24 people, modest profitability, and a refusal to sell out to the man (a la ebay…which actually acquired a 25% stake in Craigslist when one of the former principles decided that selling out to the man was the way to go).
Depending on where you live, Craigslist can either be a feast or a famine. It is most popular in larger, metropolitan areas, especially on the west coast, as these were the first markets targeted during Craigslist’s development. Because of the small staff and communal feel, the site is set up to be self regulated as posts are monitored by the people who use the service. I tell you this to let you know that fraudulent activity can and does occur through people abusing this resource. Use your intuition/common sense when it comes to dealing with other people on the phone or by email. If it doesn't feel right for any reason, don't go through with it.
I like to use Craigslist for big ticket or heavy items that will cost a fortune to ship on ebay or for anything that I want to inspect (like a car) before I buy it. As a rule of thumb, items on Craigslist typically go for less than they are listed for as most buyers have the “garage sale” mentality (e.g. even though a used book is being sold for next to nothing, the buyer wants to get it for half of next to nothing). If you are planning on selling on Craigslist, keep this in mind and try to price your items slightly higher than what you want to sell them for (assuming you don’t price yourself out of the market in comparison to other similar products on Craigslist in your area). Some hard to find or in demand products will go for the asking price if they are priced well, as I recently found out when I purchased a premium used lawnmower and weed eater last summer.
Since Craigslist is targeted at local markets, make the effort to meet the person on the other end of the transaction face to face. This will greatly reduce your chances of getting cheated out of your hard earned money, like the time that Kwame guy from Ghana promised to shares his millions with you. It will also give you a chance to inspect whatever it is you are buying. When you set up a meeting place, make it a neutral site like a shopping center parking lot as it is not recommended to invite strangers over to your house (or visa versa).
eBay
Ebay is a great place to shop online. It has become an ecommerce Mecca for millions of individual business owners and average joes looking to bid on whatever suits their fancy. Unlike Craigslist, ebay listings are monitored, payments are tracked, and members are rated by each other on each transaction. Also unlike Craigslist, ebay is a publicly owned company who is out to make lots of money. Because of this subtle difference, selling on ebay is a bit more expensive than the free option that Craigslist offers.
When you buy things on ebay, always check the seller ratings. Look for sellers with a high overall score, a high positive feedback percentage, and the ability to accept paypal, which enables ebay to track your payments. These three things will greatly reduce your risk of coming up empty. If you are making a larger dollar purchase, there are options such as Escrow.com who will charge a fee to act as an independent third party in the transaction. The third party will hold your payment until they receive confirmation from you that the purchased item has be received at which time they will then release your funds to the seller (as a side note, in all my years of using ebay I’ve never made a purchase that was large enough to warrant such a service).
I typically use ebay for smaller items that are easy to ship. Just the other day I bought a new A/C adapter for my notebook computer for a third of what it would have cost me to buy it direct from the manufacturer. It’s always good to compare the cost of things on ebay to what it would cost to buy the same product from other online retailers. Amazon.com is always a good place to check and you can use resources like Google's Froogle or Yahoo Shopping to compare prices at a variety of smaller online retailers.
I’ve been using both ebay and Craigslist for multiple years and have only been stiffed once on ebay to the tune of $15. I would definitely recommend them to any bargain hunter out there looking to save some coin.
Ciao,
Franco
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