Wednesday, July 29, 2009

How To LEGALLY Buy A Car Using Someone Else's Money - Part 2

Author's Note: This is the second part of a three part article.

Suggestion 4: Use a credit card.
Credit card debt is scary stuff, but most people get into trouble because they don't know how to use their card properly. There are plenty of ways to safely use your credit card to make a down payment without getting yourself into trouble down the line.

Get a credit card with a low interest rate or no interest rate for the first year. If you know you can pay off your debt within the first six months to a year, there are many credit cards that offer no APR or a very low one for those time periods. You won't pay a cent of interest!

Budget your income to pay off your credit card. If your plan is to use a card and pay no interest, you're going to have to budget to pay off that card in time. People get into trouble when the interest rates go up at the end of the year. Be the one smart person who budgets properly and you'll outsmart the credit card company at its own game.

Only use that credit card for car payments. If you open a credit card for a car payments, chances are you'll be tempted to use it for other things. Don't give in to that temptation! Your budget for paying off the credit card will be blown, and the temporary comfort of having money will soon be offset by high interest rates. Use it for car payments only.

Be careful when using credit cards! There are plenty of ways to use them well, but many people make mistakes. We want you to borrow money without having to suffer any consequences, so budget your payments and keep your APR low.

Suggestion 5: Get rid of some extra weight.
Admit it. You've got a lot of stuff hanging around that you don't really need. Think about whether you'd rather have that old parcel of property or a new car that doesn't break down and has windows that actually work. Take a hard look through your possessions and figure out what's not pulling its weight.

Property. If you have any property of any kind, selling off even part of it can get you plenty of money for that initial down payment and then some. If it's a small parcel, go ahead and sell it if you had no plans for it. If you have a serious acreage, consider selling just a piece of it - you'll never miss it, and you'll love the new car it bought you.

Housing. You may not have a whole slew of properties to sell off for cash, but you might consider renting out or selling that gardener's shed at the back. What about the barn? The garage? If your mortgage payments have gotten to be too much for you, consider whether you'd rather have a house to upkeep or a car that gets you to and from a brand-new apartment.

Old cars. The car you're looking to replace can help you make that down payment on the new one. Sell it for blue-book price or, if it's beyond repair, sell off the individual parts. Many cars after a certain age are more valuable in pieces than all together, and car enthusiasts will buy everything down to the frame and the lug nuts if they need the parts.

Electronics. A stunning 70% of Americans keep old hardware around the house long after they've stopped using it. If you have an old computer, stereo, or television set that you've long relegated to the basement, haul it out, dust it off, and sell it. Even if it's not the latest model, it's still functioning well and it's worth money. You'd be surprised how much you can get for certain computer cables.

Antiques. Do you have any old furniture that may be of value to an antique store? We're not advocating selling family heirlooms here, but if you have an old rocking chair in the attic, an ancient-looking wagon in the barn, or a fistful of unwanted gold jewelry sitting unworn at the bottom of your jewelry box, you might be sitting on untold wealth. Ask an antique dealer to look at your pieces and assess their worth. That new car payment may have been collecting dust around the house all along.

These are just suggestions, but you can certainly look around your own house and see what's worth selling. Don't simply assess items based on whether that one thing can make the whole car payment, either: a bunch of small items added up can get you there just as easily as one single item.

This is your chance to clear out the clutter and make room for something brand new: that car you've had your eye on. You'll use a new car every single day. How often are you going to use that parcel of land? If the answer is "less than every day", we think you know which one is worth your while.

Suggestion #6: Bad credit score? Go for the hard money.
A hard money lender can help you out if your credit score is lousy. Instead of using your credit score as a gauge for whether you're loan-worthy, hard money lenders secure your loan with the value of a piece of real estate, like a parcel of land or a house.

You can usually get a fairly significant chunk of change for a hard money loan, which means you won't have to worry about having enough money to make that first down payment on a car.
You also don't have to worry about your credit score fouling up the works. If you've got some problems in your credit history, it won't keep you from getting the money you need, since your loan is guaranteed by that piece of real estate.

The down side of hard money loans is that the interest rate is often very high. That's the trade-off for getting a loan even with bad credit. You'll pay the loan back according to the agreement, and of course, if you can't pay it back, the lender has the right to possess the property you used to secure the loan in the first place.

However, all of this is only a problem if you don't budget your money. And we know you're capable of doing that. Just plan to make all your payments on time and not only will you get a car payment loan on bad credit - you'll have built up new, good credit for the future! Pretty good deal, right?

- Conclusion Coming Next Week.

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Recommended PaperbacksCar Buying Secrets Exposed - The Dirty Little Tricks of a Used Car Dealer Authors:Tracy E. Myers, CMD with Jimmy Vee & Travis Miller. Available at and better bookstores everywhere