Car Buying Can Be Easy

Episode 84: Pocket Change Podcast

What are common mistakes people make when car buying?

1. Not checking the car's value.
2. Not looking at the budget as a whole before purchasing the car.
3. Not being aware of the car’s history, if it was pre-owned.

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Full Transcript

Shea:

Hey, this Shea.

Carrie:

and this is Carrie.

Shea:

Welcome to the Pocket Change Podcast.

Carrie:

Where you'll learn better ways to spend, save, and invest and take control of your financial journey. So today, our guest is kind of known amongst our members as a financial therapist.

Shea:

Yeah. She really gives a lot of good financial advice to our members. Of course, she's been doing it for many, many years. And so she really helps them and builds relationships with them.

Carrie:

Yeah, she's really great about giving advice on the process and helping our members along their journey and letting them know, you know, if it's a good idea or a bad idea. And she's just going to share a little bit of insight for us.

Shea:

Looking forward to it.

Carrie:

All right. So we're excited to welcome our guest Graci Miller, one of our financial champions here at Leaders. Welcome to Pocket Change Gracie.

Graci Miller:

Thank you I'm glad to be here.

Carrie:

We're so happy to have you join us today. So can you tell us a little bit about yourself and how you got to Leaders?

Graci Miller:

Sure. So I worked at another credit union before, and I was just looking to expand and learn other things. And the opportunity came around when I ran into a friend that worked here. And Leaders has very many opportunities, and I was excited to be a part of that. So…

Shea:

And you've been here, what, about 15 years now?

Graci Miller:

Almost 14. Yeah, yeah.

Carrie:

A long time.

Shea:

Just helping members with all loans.

Graci Miller:

Absolutely. Yes, yes, yes.

Shea:

That's great. So what does a day in the life of someone who's helping members with their loans look like?

Graci Miller:

Typically… a little bit of everything. So I answer personal questions. I give personal advice. I try not to let them put all the weight on what I tell them. But, you know, I like to help them out and give them my opinion.

Shea:

Yeah!

Graci Miller:

But loans all day for sure. Giving car values, letting them know what I think would be a good purchase. Possibly. Or not. But yeah. And just answering general questions throughout the day.

Shea:

Well, sounds like you're going beyond the application. I mean, you're helping our members, you know, make a good choice on a, on an auto loan or other type of loan. And so, I mean, that's really, really helpful to someone that they have, someone they can count on and trust to make those big decisions in life because sometimes they are big decisions.

Carrie:

Yeah. So it sounds like to me you build relationships with your members. So and I know that when we're out in the field, we hear all about Graci. Oh, yeah. Graci helps me do all these things. So you're definitely known for that. And you're good at it. And why do you think that relationships is important when it comes to your finances?

Graci Miller:

Well, you know, everybody wants someone that they can trust. So I try to be that person for them, you know, and just be real with them. Be honest and, you know, let them feel comfortable with communicating anything that they may have questions about. I just try to just help as best as I can.

Carrie:

Exactly.

Graci Miller:

If I, if I were in that situation, I'd want to be able to have someone like that as well.

Shea:

Right. And sometimes that can be, you know, maybe it's not right now if there's an answer that someone doesn't want to hear, but you also have to give those answers and that's hopefully good for the person long term.

Graci Miller:

Exactly. And it's not a lot a lot of times good things. So I mean they don't like everything that I tell them. But you know, I just want them to know that I'm just looking out for their best interest.

Shea:

That’s right.

Carrie:

That's so important.

Shea:

Yeah. Helping members make smart financial decisions.

Graci Miller:

That’s right. That's right.

Shea:

All right, so what are some common misconceptions about car buying that you hear and what advice would you offer to folks.

Graci Miller:

Well, I would just, you know, recommend that they do a, you know, a good, good check as far as like the value, you know, a lot of people will just go and say, okay, you know, this is this is what I'm getting. This is what I want. You know, I need to finance this. They don't look at the value. They don't look at, you know, the history.

Shea:

We just scroll and like, oh. That’s what I like.

Graci Miller:

Exactly. And they don't pay attention to the dollar price or the monthly payment that comes along with that car. And when that first payment comes around, they're like, what have I done? Buyer's remorse, you know. So but yeah, just looking out for that stuff, you know, because a lot of times there are people that are asking too much for a vehicle, especially when buying from an individual. You don't know those things. You don't know where that car has been or who's had that car, or if it's been wrecked, or if it even has a salvage title. So we can offer that perspective and give them that information and let them know whether it would be a wise decision, you know, as far as what we would think.

Shea:

Yeah, definitely.

Carrie:

Yeah, that’s great.

Shea:

Looking at those values and doing your research is important.

Graci Miller:

Yes. Yes, it definitely is.

Carrie:

If someone needs to borrow some money for a car, how do they even get started?

Graci Miller:

Well, I mean, a good step is to start the pre-approval process because our applications, when we start them, are good for 30 days and we don't have to do additional credit checks if they change their mind on a certain vehicle. We can run multiple vehicles with that same first credit application, but that way they know where to start because we can let them know approximately what amount we can finance for them and give them stipulations on possibly year and mileage, because that can be factored in or a very important factor as far as you know, credit score, age of the vehicle… that is… it all boils into one thing mileage, credit score, the value of the vehicle. All of those things can factor into an approval or a denial. So you just want to kind of get started pre-approved, that way we can kind of give you some beginning steps to start from.

Carrie:

That's great.

Shea:

And I think, you know, with that, you know, you want to know you should start there because you could go look for something that has this price and this price point and, you know, maybe out of the range.

Graci Miller:

Right. Right.

Shea:

And so you don't, you know, get to looking before you know exactly how much you can afford.

Graci Miller:

Exactly.

Shea:

That makes it important.

Graci Miller:

And it's good to know, you know, kind of a budget as far as what you want your monthly payment to be. And we can then, in turn, give them the mileage they need to stay within. And the, you know, approximate rate of possibly. Right. You know, we can give them starter points.

Shea:

That’s good.

Carrie:

Good.

Graci Miller:

And also we do offer CarFaxes you know. So if a lot of people are looking for used cars we can run that Carfax history to see if it has a salvage title. Mileage is accurate or if there's any mileage inconsistencies.

Carrie:

That's right.

Graci Miller:

But yeah, that's a good tool that we have to help our members when searching for a vehicle.

Carri:E

That's awesome.

Shea:

Still talking about the pre-approval process. What does that look like? I mean, I know you deal with people on the phone and calling in or applying online. So what all do they have to provide or what do they need? What's that look like? A little more…

Graci Miller:

Basically personal information, you know, all the all the necessities and just verbal permission to run credit. Of course we need to know their income, employment situation. But that's the starting point. We run their credit and then we can determine if proof of income is required and then what those stipulations would be.

Carrie:

How long does it typically take to get pre-approved?

Graci Miller:

As long as you're available at that moment to take that call. So say like if we're taking an internal phone call, I mean, it literally takes you five minutes to go through the application process because you just need their basic name, phone number, you know, their employer, their income, but it's literally five minutes.

Shea:

How long does it take to get pre-approved? Completely.

Graci Miller:

So sometimes we can know within about 20 minutes maybe, you know, maybe while we're on that phone call, we can give them a decision right then and there. But typically maybe within an hour to two hours.

Shea:

Okay.

Carrie:

That's not too bad.

Graci Miller:

No. But yeah, it's a very quick process.

Carrie:

So what should someone keep in mind if they're trying to build their credit and get a better interest rate with an auto loan?

Graci Miller:

I think a very important factor of building credit is not trying to go here and there and take out loans. A lot of people think the more credit, the more loans they get. The more credit cards they get, the better it's going to help their credit. But it's really not. It's the longevity of that trade line once you get it established, and also not paying off loans early because the longer they report, the better it reflects on your credit. And a lot of people don't realize that. We'll have people, you know, that want to take out a share secured loan, and they pay it off in five months. Well, it really doesn't benefit their credit because it hasn't even reported long enough to establish that trade line. But yeah, and, you know, paying things on time of course is the most, most, most important thing. Credit card utilization is a very important factor. You want to stay below 30%, right. And you know, asking for those increases if you can because some places can do an increase without doing a ding on your credit. But in the event that it does do a ding, you should recover from things like that within six months or so.

Shea:

Yeah.

Carrie:

Okay.

Shea:

Yeah. I think, you know, like you said, it can be better in some cases... You have a credit card, one card that's been open for 15 years versus five that have been open one year or something like that.

Graci Miller:

Right right.

Shea:

Because it is that longevity and that history that can be showed. And of course, like you said, paying on time. That's the number one factor.

Graci Miller:

Absolutely.

Shea:

That affects your credit score.

Graci Miller:

I was going to mention also, a lot of people think that, you know, if they have credit cards, say that their balances are maxed out, but yet you're paying on time. That really is not beneficial for you as well. Paying on time… Yes, but the maxed out credit card has not beneficial.

Shea:

Right. That can make it look like there might be some cash flow issues.

Graci Miller:

Exactly.

Shea:

If you have that, how are you going to pay for a car loan payment? Things like that. So those are great suggestions for people and advice for them to keep in mind about their credit. So some people view debt negatively, but how would you advise someone to use debt wisely?

Graci Miller:

You know, only take it out when necessary. You know, not just take it out just because. You know everybody has debt. It seems like, you know, not everybody, but the majority of citizens have debt, so just taking it out only when necessary, not just because like, you know, there, you know, purposes of vacation, maybe home remodeling, things like that, but not just to go buy something that you really need.

Shea:

It’s not extra income. Right?

Graci Miller:

Right. Not just to go buy something that's not something you really need.

Carrie:

Right. I think having control, because knowing that you have that credit limit doesn't mean that you should spend all.

Graci Miller:

Exactly. Exactly.

Carrie:

It's just like when you're, you know, getting pre-approved for any kind of loan. You may can it may say you can afford X amount, but that doesn't mean you shouldn't max it out.

Graci Miller:

You got to think about other things like your groceries, or something that could come up. You could have a flooding…

Shea:

An emergency.

Graci Miller:

Yeah. A car breakdown.

Carrie:

That's right.

Shea:

I think especially when starting a larger purchase, like a car, home, debt can be used wisely in those cases.

Graci Miller:

Absolutely. Because a car is going to report to your credit for a long time, unless you just happen to come into some money and can pay it off early. But yeah, that is a definitely good wise way to have credit or use credit. Buying a home.

Shea:

Yeah.

Graci Miller:

You know, it's a that's an also important purchase that you can make. And not everybody has that cash on hand. So that is a very good wise way to take out debt when you have to.

Carrie:

So you're great at giving everyone else advice about their finances. But what is the best financial advice that you've been given?

Graci Miller:

Well, paying your bills on time. I you know, I wasn't fortunate to really be brought up, taught all of that. I kind of had to self teach myself. And being in banking has helped a lot because you see people that come in and they're not in the best situation. And that teaches you. And I would say that's probably what I've learned is from other people is to just not put yourself in that position.

Carrie:

That’s very smart.

Graci Miller:

Where your debts exceed your income.

Shea:

Yeah.

Carrie:

Yes, 1,000%.

Shea:

Yep. All right. So if you had some, a little extra change in your pocket, what would you spend it on?

Graci Miller:

Clothes. I love clothes. I used to like work at Buckle as a second job, and they would get my whole paycheck and then some. But yeah, I love clothes, I love shoes. Yeah. Anything doing with…

Carrie:

Shopping spree?

Graci Miller:

Yes.

Carrie:

We can go together.

Graci Miller:

Yes, yes.

Carrie:

Well, thanks so much for being with us today and sharing all this with us. You know, as far as loans and car loans and great advice, we appreciate you joining us today.

Graci Miller:

You’re very welcome.