Game plan to avoid being cheated

Consumer cautions for military personnel and other young adults:
                New military recruits graduate from childhood to adulthood quickly.  Before you have a chance to be an adult consumer in the civilian world, you are whisked away to participate in a war.  When you return, you have a pocket full of cash and lots of ideas on how to spend it, but no foundation in how to handle the sales team waiting for you to walk through their door.  A few suggestions:

                These people are not the enemy and they do not look like it.  They look like your best friend, your parents, or a former service buddy who has gone into the civilian life with some sales skills.  They may truly believe they are helping you, and may have no idea that they are asking you to sign a bad contact.  They target you, not because they dislike service members and want to trick you, but because they know you have cash in your hand.  They study you and know what you want and what you worry about.  Your lack of experience in handling cash is not the reason they target you, but it certainly makes their job easier.    

                They have studied their products and can teach you about them.  They know the things that you could not have found out about during your internet search… they take pride in helping you, and before you know it, you know whether they are married or not, whether they were ever in the service, and which branch.  You will know about their kids and what school they went to.  Anything they have in common with you, you will hear about.  The danger is that this will relax you and make you more likely to buy from this person, whether or not this person has the best deal available for you.  You will believe this person when they talk to you about loans and leases, warranties and whether or not you should get your own mechanic to check the used car out after their dealership has already done its special evaluation (which always has some special name that makes it sound like it must be the most perfect evaluation in history). 

                Remember, they have studied people like you, which is why you like them and trust them.  But they also know their product.  They know whether this car seizes when it goes over 50 miles per hour, so that they will encourage you to test drive it only on local roads where the speed limit is 45.  They know that you are interested in saving money and will find it easy to avoid spending extra cash on a mechanic to look at the car or a lawyer to review the contract for purchase.  They play on this.  After all, you are a big man who understands engines.  You have pulled a whole tank apart in the desert and put it back together in less than an hour.  You can certainly do your own evaluation of the car.  You don’t need your Dad or your wife to help, or approve. 

This is how they use your pride against you.  To convince you that you do not need a friend’s opinion, an inspection, a mechanic to look at it, a lawyer to review the contract.  Don’t let them do it to you.  Use your pride to follow a plan.  Here is the plan:

1.       Go online to research your purchase.  Find out prices, the plusses and minuses, the consumer report on it.  If it’s a car, look at the Kelley Blue Book value.  If it’s a house, look at Zillow and Trulia.

2.       Know how much you can afford.  Don’t just take some realtor’s recommendation that you “can” afford something.  Look at how much you want to spend on it and find out how much that would be if you got a loan with that type of payment.  In calculating your costs, put in costs of repair, alterations, maintenance, licensing, insurance, and taxes.  Get pre-approved if you can, even for a car loan.  It’s better to take a more conservative approach and let the dealer beat the deal you have in your hand if they can, than to let the dealer do it for you and have a nasty surprise because you did not know all the details.

3.       Go shopping.  Personally look at the purchase.  No falling in love with a house on the MLS or a car on Cars.com or a sofa on craig’s list is allowed.   Personally walk through it, test drive it, sit on it.  Turn it upside down and check it out.  Don’t get dazzled by the paint job, look at it’s bones.  Appearances will tell you if it was well taken care of, but be careful of reading much more into a clean seat.

4.       Get a professional inspection.  You will probably have to pay for this.  A home inspection, a termite inspection, a mechanic’s inspection.  All are very valuable.  If someone suggests that you should not get an inspection, be suspicious of their motives.  Nothing, not even a rush to get the deal done, is worth missing this step.  And no, you cannot just do the deal and rely upon getting it inspected later.  Undoing a bad deal is usually impossible, and in the few situations where it is possible, it is very, very difficult.

5.       Arrange for a warranty.   Now is the time to start to finalize things, but do not finalize until you finish with step 6!

6.       Bring the contracts to a lawyer for review.  This includes the contract for the loan as well as the contract for the sale.  More than one person has been surprised by bad loan terms they did not understand.  The lawyer can either help you re-negotiate the contract, or can inform you of the meaning of the various clauses.

Follow this plan that you are less likely to get cheated.  Less vulnerable to people who would use your pride against you.