Greetings!! Each week the founders of “The Black Coffee Company,” meet to discuss their business plans, financials, processes, and completed tasks. The meetings are currently weekly, due to all our activity and deadlines, but at times in the past those meetings were bi-weekly or monthly depending on our availability and agenda. Regardless of when the meetings took place or how often, we made sure to begin each meeting the same way, by discussing our lives, sharing our daily experiences, and learnings. In my opinion this is the single most valuable aspect of our company, our differentiator, and our key to success. After a recent discussion we thought it would be an interesting experiment to share these “private conversations” with our community and wider network of followers. It is our sincere hope that you can take something from our discussions and apply an insight or tip to your own life and goals.
With that said our first open discussion:
Gino: Wsup fellas so as I mentioned on our last call I’m feeling like now is the time to go ahead and make this purchase, but I wanted to talk to you all and hopefully get some tips
Jamin: Good luck!!! Lololol
Leonard: Dont do it!!
Branden: Congrats Bro!
Chris: Huh, what did you say? My connection is tripping
Gino: Lolololol @Chris Bro I’m ready to go ahead and cop this ride man!! I need the hook up
Chris: Oh fasho, my bad have you done any research?
Jamin: go to your Credit union first, that’s if you have one.
Leonard: How much have you saved?
Branden: Have you ever owned a ‘new’ car?
Gino: Actually, I contacted my credit union. Never owned a ‘new’ car… my old one is long gone, and I’ve saved about $6,000 just for a new car.
Jamin: Balller!!!!! Let me hold something? Lolol nah I think it’s best to invest that cash.
Leonard: Good work Bro!! You have a bunch of options to consider: could buy a used, but it needs to be reliable, could buy a new car, but you don't want to spend too much, and you better get a good deal.
Chris: Or keep on stackin that cash and let’s buy the block
Branden: I agree with Chris!!! Lol
Gino: Well I’ve never had a brand-new car, and that’s been weighing on my mind, but I do not want to have a high car note.
Jamin: That makes two of us; every car I’ve owned has been used. They were new to me though. I make sure I only buy certified used, but that only guarantees you so much, so if you do go with a used, get that extended warranty and try to stay away from high mileage vehicles (anything over 60K miles)
Leonard: Well if you decide to go the new car route and take out a loan, make sure your credit score is on point so you can get a low interest rate; a credit union probably will offer the lowest interest rate; always look at the big picture (overall cost of the car and loan), then consider what the monthly payments are going to be; ask if dealer offers incentives like free maintenance for three years or $500 off for being a student or because you work at a particular employer; save and put down as much as you can!
Chris: I always do the used car route. After doing my most recent debt assessment I realized that I only have $600 left to go on my car now, which was a used car. I put money down on my car, to get the payments down to where I was comfortable. I also paid extra each month to pay the loan off quicker and avoid some of that interest. Personally, living out in here in Atlanta in makes no sense to buy a new car, the roads are terrible, potholes everywhere.
Branden: I think certified pre-owned is the way to go. Having a high car note is going to depend on how much you put down and your interest rate. Find out the sweet spot in terms of how much you want to pay per month. Pick a car based on your monthly allowance and if it doesn't matter and you are going to have to pay a large amount anyway, I wouldn't put down any money. I don't believe in that. Keep that liquid cash for emergencies or alternate/actual investments…. A car is truly not an investment.
Gino: What's the difference between a new and preowned car?
Jamin: A new car is exactly that, new, never before owned. Usually comes with 5-10 year/ 60-100k mile warranty. A “Pre-owned” car is really a “Used” car, dealers just say pre-owned to imply that the used car does not come with a warranty or inspection. If the vehicle is labelled “Certified Pre-Owned” then the dealer is certifying that the vehicle was inspected and passed.
Leonard: What Jamin said!
Branden: There is a difference between pre-owned and certified pre-owned. Certified comes with the remaining warranty from the initial manufacturer, and it includes a multi-point inspection with the option to add another extended warranty. They are usually ‘newer’ and often are in really good condition. The ones I’ve looked at had a lot of features that customers added upon purchase. That means that there may be freebies, in a sense.
Chris: They hit the nail on the head. Certified pre-owned is the way to go!
Gino: Would it be better to have a higher down payment or use that money to pay off some debt to raise my credit score?
Jamin: Pay off the debt and raise that credit score!! Well that's the mission I am currently on, and after purchasing a “certified pre-owned” vehicle just over a year ago, I regret putting so much money down on the car. Sure, I owe less, but my interest rate is much higher than I am comfortable with, and thus I am now paying down debt so that I may refinance the vehicle and get a lower rate,
Leonard: If you can hold out from purchasing to get your credit score up and pay off your debt that would be ideal. Honestly, I would sit down and look at the numbers, it will lead you to the light! If you do not have savings right now, then it does not make any sense to put all your money into a car.
Branden: I agree with Leonard and Jamin. I don't like putting money down, you can repurpose that down payment money, plus it doesn't really take that much off the monthly payment in most cases. Each situation is different, so definitely look at your numbers. I am an advocate of doing what makes sense for your situation.
Chris: I prefer to have a good credit score and cash on hand for emergencies and for other more lucrative investments. By accomplishing those priorities first, I have not had to stress about car payments, because I usually get good deals based on my credit history.
Gino: I’ve been saving a lot of money over the last couple of years, so the $6k won't deplete my funds that much.
Leonard: If the interest rate is like double digits, you want to really take a look at the overall picture. If the interest rate is low like 2-3% it might be best to not put as much money down. Repurpose those funds for your emergency savings or pay off some high interest debt.
Branden: You could always wait until the loan is complete (meaning extended to you) and then make payments over time with the saved money. By doing that, you would still have money as you need it (or for other investment opportunities) while still maintaining the ability to cut that loan down at any moment and reduce years of interest.
Chris: Pay off your outstanding debt, your credit score affects so much more
Leonard: Yep, get on a plan to pay off debt and watch your interest rates fall, wait till your score is up!
Gino: Usually, new cars have different options or starting packages with more features on the car. Those aren't necessary, right?
Jamin: I call them bells and whistles, doesn't matter how many bells you got, the bike still works the same...but you need to be comfortable, especially after investing so much money, so get a good sound system from the homies..
Chris: I don't need the bells and whistles, if I do want them then I’ll get them afterward
Branden: It's all subjective, I’m not rolling no window down manually or anything like that, but I would just get the standard model. Mid-level cars are all about the same, just like cellphones or laptops these days. However, you don’t want to decide against something you really wanted over just a couple hundred bucks. I did that with the paint color…. All over $200. It really boils down to your flavor and bread.
Gino: I've had AAA for a long time for roadside services, but I know they offer car insurance also. Do you guys have insurance through AAA or a different insurance company?
Jamin: I’ve been w/ Mercury Insurance since I first started driving. I have shopped around from time to time, but they always seem to offer me the cheapest rates. Oh and yes, I have AAA roadside assistance as well.
Leonard: We have All State. I used to have AAA for roadside service, then I realize that my insurance provides roadside assistance, so I got rid of AAA. Having AAA for insurance might not be a bad choice. It won’t hurt to call around though.
Branden: State Farm…. Need that multi-policy discount playa! Shop around!!
Chris: ….and that's a wrap fellas!!!