I have bought 2 new cars in the last 6 months. One for my family and one for my mother.
Never buy the first car you see. Dealers will do everything they can to not let you out the door once you walk in. Well, not all dealers but the one who sell the most cars won't. 97% of the people who leave without buying buy their car somewhere else.
Do a lot of research on what cars will do the job you want it for. Not everybody needs a big SUV or Pickup Truck every day let alone more than a day or two a month. Maybe you want one and can afford one. When gas prices go back up you might regret it. For you Hummer owners out there, now is a good time to sell it. Before gas prices go back up.
We bought a Honda Pilot. But first we looked at a Mazda CX9 and Toyota Highlander. We drove them all. Put them side by side as well. The dealers were all within a block of each other.
We also looked at a few others but they didn't fit the mission. Be able to carry 3 people, two dogs and enough clothes and gear to live somewhere almost 2000 miles away for the summer. The CX5, CR-V and Rav4 didn't cut it.
While the CX9 has more listed cargo space than the Pilot it's not really usable unless you are filling the vehicle with sand or water. All those sexy looks of the CX9 make the space less usable.
We also picked those 3 vehicles because they have really good reliability records. We also asked friends and Facebook Friends what they thought of them. Many of them had the Pilot and loved it. They would all buy another one.
Another cost is cost of ownership. The Honda gets and average 18MPG the way we use it most of the time. If we only needed the extra seats and cargo room 2 weeks a year we would have bought the
CR-V. The CR-V gets almost 30MPG. The reason we didn't get it is to rent a Minivan or Pilot size car in the summer is about $1000 per week. We need this car for about 6 weeks. Do the math.
On this car we didn't have a trade. That removes one way a dealer makes more money on you than you think. I will cover how to best deal with a trade in on how and why we bought the car we did for my mother.
Then I looked at TrueCar.com and other sites to see what the invoice price was and what others were paying. Since it was a 2015, the first 2015 the dealer had sold I had to go off the 2014 prices for reference.
They were giving a $1000 dollar incentive for buying a 2014, but $1000 to buy last years model is not enough. Mazda was giving $2,500 dollars of to buy last years model. That's almost enough to buy an older model but we chose the car for the job, not the price. there is nothing you will regret more than buying a car that doesn't do the job no matter how much cheaper it is.
The 2015 ended up costing only $500 dollars more than the 2014 with the $1000 end of year discount would have been.
O.K., so now you have the best deal on the car. Not so fast. You have to make it past the Finance guy. This is where dealers make all the money. They have lots of things to sell you. All of them are based on fear.
Extended Warranties, Paint Protection, Key and Tire Insurance. Don't but it. Any of it. If you really need an extended warranty look online before you buy. You can buy them form any dealer and many sell it for hundreds less than the one that has you locked in their office.
The paint protection costs more than getting your car waxed twice a year. Keys are covered under your motor club at least part of the cost. AAA is a good deal. Don't lose your keys.
Financing. You should know before you walk into the dealership what you can get financed for outside the dealer. When you have those numbers the dealer will either match or beat it.
If your buying a car that needs an extended warranty buy a different brand or buy a cheaper car. If you can't afford a repair out of warranty you probably can't afford the car your buying.
Out of all the cars I've owned they have all outlasted the warranty period. That's probably because I actually change the oil and fluids with Amsoil.
At the first oil change I put in Amsoil engine oil and extended life filter. Then I change it once a year or every 15,000 miles. While it's more expensive initially it's cheaper than changing oil every 6 months or buying an extended warranty.
My Astro Van has 274,000 miles on it. The first owner changed the transmission at 89,000 miles. That's about 14,000 miles past any extended warranty. I put Amsoil in the trans when I bought it at 139,000 miles and changed it again at 240,000 miles. I have gotten more miles, almost double, out of the rebuilt transmission than the original owner got out of the factory new transmission. It also has the original engine and rear differential. Buy Amsoil, not extended warranties. Use that money to do the regular scheduled maintenance.
Ask most owners of the reliable brands and most if not 98% have never used that extended warranty for more than they paid for it. My mother just traded in her 2000 Toyota 4Runner. In the whole time she had it she never had anything replaced that the extended warranty would have covered.
So do the research, pay for the Consumer Reports website, use TrueCar.com, Cars.com and or Edmunds.com among other websites. Drive many cars that fit the job and then and only then should you set foot in the dealer to buy a car. If you don't know how to negotiate then you should hire someone like me to do it for you or follow the online advice of how to buy using nothing but email.
One other thing about sites like TruCar. Most dealers probably don't have the exact car you want. They will give you a price for that car but the dealers will send you quotes on cars they have on their lot.
Some will look really cheap or be within $100-$200 of all the other dealer. But read the small print and they have something called Dealer Installed Options. These are where they make more cash again. Some have $300 in options and some have $2000 in options. Most of these you don't need and many can even be removed from the car before you buy it. And then some let you keep them but take them off the price. Why? They are almost pure profit.
Once you have your new car make sure you follow all the maintenance recommendations. Here is a free website that lets you keep track and even sends you reminders. My Garage.
Enjoy your new car.
Monday, January 19, 2015
Why Doctors and Hospitals are Worse than Car Dealers
Lately I've been doing a lot of research on Doctors and Cars.
In the last year I have bought two cars. One for my mother and one for myself.
I have also had to decide on which health insurance I wanted to buy from my work.
By far the choice of insurance was far harder and has far more unknowns.
I had a choice between three plans. Insurance that is. Well, I really only had a choice between two plans. One of the three had way to much risk and no savings in premiums over one of the other two. It was only in there because the company offered a plan to part time employees. The same cost but way higher deductibles than the cheapest plan for full time employees.
Now why is this worse than buying a car.
First let me tell you a bit about my old plan the company decided they no longer wanted to pay for.
The cost to the employee was only $200 a month with specific copays and very low deductibles and low or no coinsurance.
Prescriptions were also covered for $10 a month. New cost for the same drugs, $30 a month.
$10 copay for primary care doctors.
$25 for a specialist visit.
Urgent Care $50
Hospital ER $100
If you needed surgery you had a 10% copay up to your maximum deductible of $1000 per person.
There were also many things that were free. For example I was having allergy shots 1-2 times a week.
Now heres my issue with the new insurance.
Most of the time when you need a doctor you are sick or injured, you don't have time to shop around. Even if you could shop around doctors don't publish their rates. And if they did they have more prices than a car dealer.
They have a price for people who call in with no insurance. Usually the highest price they charge. Hospitals are almost as bad. They know in an emergency they have to treat you so they handle it a bit differently. They treat you, send you the bill and then give you a discount if you pay in 30 days or less. If not you pay retail on some payment plan.
What might be a $10,000 dollar bill they will tell you it is only $7000 if you pay now. If you have insurance it might only be $5000 ,but, if you have a really aggressive insurance company the bill might get knocked down to $2000.
Then you get bills from the doctors who worked on you separately. Once again the prices could be all over the map. You don't have time to shop or any real power to negotiate. Most doctors or hospitals will just tell you to take a hike if you don't like what they charge.
Now back to my insurance.
If I want to see a specialist I now have to pay the whole bill up to my $800 per person deductible and after that I have to pay 20% of the billed amount up to my $3000 max out of pocket.
Another issue I have is that all my 20% cost sharing is based on rates that the insurance company negotiated. It could be higher than the cheapest price that doctor has said they are willing to take from someone else.
At least when you walk into a car dealer they have their labor rates posted on a wall. You also have time to shop around for the best rate.
Next time you go to the doctor ask them for their price list.
Last week I went into my allergy doc to get my weekly shot. When I was done I asked them how much I owed them if anything. Remember, up until now the shots have been covered 100%. I knew this because it was on my insurance companies website.
My new coverage. Nothing, nada, could't find anything about allergy shots. Are they covered 100%, do I have a 20% copay? Do I pay 100% till I meet my deductible? If I pay do I pay more or less than my last insurance company paid? They paid $5 a shot. Or since I have a new company I don't know.
The receptionist didn't know either. She said she just sent it to the billing people. It's been almost two weeks and I still don't know. The billing department must be way behind. Either that or the insurance company is way behind.
Until I know I'm not going back.
I'm also avoiding specialists. Which wouldn't be so bad if I could get an appointment with my Primary Care Doctor in less than 2 weeks. Urgent Care is now more expensive to visit as well. Which is pretty screwed up since there are several Urgent Cares in the are that let you "join" for a fee and get discount prices. Cheaper prices than I get with insurance. My insurance company is just a middle man siphoning off 20% or more of what I pay. One other side to the equation, what's their incentive to get me the best price when they get a cost plus deal.
I don't blame any of this on the Affordable Care Act. The system has been broken for a very long time. And my plan used to be cheap and cover more because of a collective bargaining agreement. That's right, I belong to a union. The company has been dying to get out from under that health insurance plan for 5 years and finally decided to pay us more so they could. Yet this year they are on track to make multi billions in profit. The CEO will make about 80 million or more this year. I don't think he has to worry about medical bills coating him a new car or his 401k.
So you can hate car dealers all you want but at least there are multiple sources of what a car costs them and now even more sources that will negotiate the price of the care for you.
Costco and Sam's Club, TruCar.Com, Consumers Reports. If you pay too much for a car it's your fault.
Where are these services for Medical Expenses. Why can't I go to the doctor and show my Costco card and get the lowest price possible and then use my insurance to pay their share.
I'd say the system is broken and impossible to fix but it's not. It just requires a change in the way we do business.
My Mother who is 84 has probably the best insurance around. She goes to the doctor, any doctor and pays nothing. Zip, nada, zero.
She pays about $200 a month to a AARP medigap policy. That and her Medicare covers everything.
I know Doctors complain about how much medicare pays. They also complain about all the people they need to pay to keep track of their billing and all those different deals they make with insurance companies.
As I said before I belong to a union. We negotiate a contract every 7-10 years. Almost everyday we complain we are getting paid to little. That we deserve more. We can't come to work one day and just raise our prices.
Well Doc. you might think you have your own business, but you don't. You have expenses and overhead and you have to manage your office and employees but you really work for the insurance companies. Just like my boss tells me that there is now money to pay me more, so does yours. The insurance company.
Actually many doctors are realizing this. They are selling their practices to hospitals and large groups and becoming employees of those groups or retiring. The savings is in hiring fewer people to do the billing among other things.
And don't let Hospitals, Insurance companies tell you the lies they have been. They are getting bigger. A lot bigger. Building more buildings buying more practices and paying CEO's high salaries and bonuses while complain how tough life is.
The medical business is far worse than the auto industry.
In the last year I have bought two cars. One for my mother and one for myself.
I have also had to decide on which health insurance I wanted to buy from my work.
By far the choice of insurance was far harder and has far more unknowns.
I had a choice between three plans. Insurance that is. Well, I really only had a choice between two plans. One of the three had way to much risk and no savings in premiums over one of the other two. It was only in there because the company offered a plan to part time employees. The same cost but way higher deductibles than the cheapest plan for full time employees.
Now why is this worse than buying a car.
First let me tell you a bit about my old plan the company decided they no longer wanted to pay for.
The cost to the employee was only $200 a month with specific copays and very low deductibles and low or no coinsurance.
Prescriptions were also covered for $10 a month. New cost for the same drugs, $30 a month.
$10 copay for primary care doctors.
$25 for a specialist visit.
Urgent Care $50
Hospital ER $100
If you needed surgery you had a 10% copay up to your maximum deductible of $1000 per person.
There were also many things that were free. For example I was having allergy shots 1-2 times a week.
Now heres my issue with the new insurance.
Most of the time when you need a doctor you are sick or injured, you don't have time to shop around. Even if you could shop around doctors don't publish their rates. And if they did they have more prices than a car dealer.
They have a price for people who call in with no insurance. Usually the highest price they charge. Hospitals are almost as bad. They know in an emergency they have to treat you so they handle it a bit differently. They treat you, send you the bill and then give you a discount if you pay in 30 days or less. If not you pay retail on some payment plan.
What might be a $10,000 dollar bill they will tell you it is only $7000 if you pay now. If you have insurance it might only be $5000 ,but, if you have a really aggressive insurance company the bill might get knocked down to $2000.
Then you get bills from the doctors who worked on you separately. Once again the prices could be all over the map. You don't have time to shop or any real power to negotiate. Most doctors or hospitals will just tell you to take a hike if you don't like what they charge.
Now back to my insurance.
If I want to see a specialist I now have to pay the whole bill up to my $800 per person deductible and after that I have to pay 20% of the billed amount up to my $3000 max out of pocket.
Another issue I have is that all my 20% cost sharing is based on rates that the insurance company negotiated. It could be higher than the cheapest price that doctor has said they are willing to take from someone else.
At least when you walk into a car dealer they have their labor rates posted on a wall. You also have time to shop around for the best rate.
Next time you go to the doctor ask them for their price list.
Last week I went into my allergy doc to get my weekly shot. When I was done I asked them how much I owed them if anything. Remember, up until now the shots have been covered 100%. I knew this because it was on my insurance companies website.
My new coverage. Nothing, nada, could't find anything about allergy shots. Are they covered 100%, do I have a 20% copay? Do I pay 100% till I meet my deductible? If I pay do I pay more or less than my last insurance company paid? They paid $5 a shot. Or since I have a new company I don't know.
The receptionist didn't know either. She said she just sent it to the billing people. It's been almost two weeks and I still don't know. The billing department must be way behind. Either that or the insurance company is way behind.
Until I know I'm not going back.
I'm also avoiding specialists. Which wouldn't be so bad if I could get an appointment with my Primary Care Doctor in less than 2 weeks. Urgent Care is now more expensive to visit as well. Which is pretty screwed up since there are several Urgent Cares in the are that let you "join" for a fee and get discount prices. Cheaper prices than I get with insurance. My insurance company is just a middle man siphoning off 20% or more of what I pay. One other side to the equation, what's their incentive to get me the best price when they get a cost plus deal.
I don't blame any of this on the Affordable Care Act. The system has been broken for a very long time. And my plan used to be cheap and cover more because of a collective bargaining agreement. That's right, I belong to a union. The company has been dying to get out from under that health insurance plan for 5 years and finally decided to pay us more so they could. Yet this year they are on track to make multi billions in profit. The CEO will make about 80 million or more this year. I don't think he has to worry about medical bills coating him a new car or his 401k.
So you can hate car dealers all you want but at least there are multiple sources of what a car costs them and now even more sources that will negotiate the price of the care for you.
Costco and Sam's Club, TruCar.Com, Consumers Reports. If you pay too much for a car it's your fault.
Where are these services for Medical Expenses. Why can't I go to the doctor and show my Costco card and get the lowest price possible and then use my insurance to pay their share.
I'd say the system is broken and impossible to fix but it's not. It just requires a change in the way we do business.
My Mother who is 84 has probably the best insurance around. She goes to the doctor, any doctor and pays nothing. Zip, nada, zero.
She pays about $200 a month to a AARP medigap policy. That and her Medicare covers everything.
I know Doctors complain about how much medicare pays. They also complain about all the people they need to pay to keep track of their billing and all those different deals they make with insurance companies.
As I said before I belong to a union. We negotiate a contract every 7-10 years. Almost everyday we complain we are getting paid to little. That we deserve more. We can't come to work one day and just raise our prices.
Well Doc. you might think you have your own business, but you don't. You have expenses and overhead and you have to manage your office and employees but you really work for the insurance companies. Just like my boss tells me that there is now money to pay me more, so does yours. The insurance company.
Actually many doctors are realizing this. They are selling their practices to hospitals and large groups and becoming employees of those groups or retiring. The savings is in hiring fewer people to do the billing among other things.
And don't let Hospitals, Insurance companies tell you the lies they have been. They are getting bigger. A lot bigger. Building more buildings buying more practices and paying CEO's high salaries and bonuses while complain how tough life is.
The medical business is far worse than the auto industry.
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