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Even if you don't think you do, you already know plenty about commodities. Want us to prove it? No problem.
What makes oil produced in Saudi Arabia different from oil exported from Nigeria? It's the same thing that makes the corn you ate at last summer¿s barbecue different from the corn used to produce ethanol. Stumped? Well, don't feel bad, it's a trick question. The answer? Absolutely nothing. Corn is corn no matter where it comes from -- just as wheat is wheat and natural gas is -- right! -- natural gas. (Though the quality may differ, the make-up is uniform.)
So, in less elaborate terms, corn and oil (and all other commodities) are homogenous goods that can be processed, resold and more often than not, used as an input to the production of other goods or services. These goods are traded on a commodity exchange, thus setting the price-per-barrel (or other metric unit) used to value them.
Now pay attention, here's a question that indeed does have an answer: What is the difference between a commodity and a stock? While a stock can tank and become worthless, a commodity cannot have its value be wiped to zero. One other difference: Most commodities are traded in futures, meaning traders buy and sell where they think the price of a product will be at a certain point in the future. Stocks trade based on the value of the underlying company at that point in time.
Home / Personal Finance / Women in Business
Wednesday, June 11, 2008
Buying a Car? Here's How
Buying a Car? Here's How
Auto analysts report that 2008 will be a down year for the domestic market, so dealers are eager to sell. That gives you the edge when it comes to haggling over content and price.
There are no car-buying secrets you can't discover yourself. Guides such as Consumer Reports, Strategies for Smart Car Buyers and Buying a Car for Dummies are chock-full of information, as are user-friendly websites such as autobrag.com, which offers advice about deals and dealer scams. With due diligence, research and auto financing facts at hand, you can enter the lion’s den with impunity.
Strapped for time, one savvy entrepreneur handled her entire minivan purchase by e-mail. She found a local dealer online that offered a great price on the model and features she wanted, and she e-mailed her order. Since it was the end of the month, when dealers close the books, he was eager for the sale. He e-mailed back saying that if she came in that day to sign the papers, he’d give her the deal. Although he tried to renege when she showed up, she had copies of the e-mails to prove her price.
Research selections. Be clear about the cargo space and mileage you want, along with your home and business needs. Once you've decided the size of vehicle best suited to your business, research manufacturers’ and local dealers’ sites for detailed specifications, features, options and prices. For more price quotes and to address concerns about reliability, safety and fuel economy, visit edmunds.com, cars.com, fueleconomy.gov, Kelly Blue Book, consumerreports.org and nadaguides.com .
Comparison shop. Manufacturers' sites list area dealers for your city, so you can find price quotes from multiple dealers selling the same brand and model. Former ace car salesman Don Fuller advises cross-shopping similar, competing vehicles by features first before comparing price. Car A may include an option as a standard feature, while car B does not. Some options are packaged along with other features you may not need. Compare the annual "cost to own" at intellichoice.com and cars.com. Then test drive your selections on local streets and highways for handling, performance, wind noise and overall comfort.
Financing. Consider the cost of both principal and interest and increased insurance, advises Bob Brisco, CEO of CarsDirect.com. Factor in the trade-in value of your current vehicle, plus incentives and rebates. Get a copy of your credit report because the car salesman will use it to determine which debtor tier you qualify for.
Ask your company accountant whether it’s smarter to buy or lease (we’ll cover leasing next month), and decide how you’ll pay for the vehicle: credit union, personal bank account or a loan from the automaker. Arm yourself with up-to-date local loan interest rates from bankrate.com. The website's calculator will also figure out your monthly payment range.
If you ask, many dealers will give you a few days to check for comparable interest rates even after you've signed the vehicle sales contract. As a negotiating tool, you can call Consumer Reports' New Car Price Service at 800-693-8714 to find the actual price the dealer paid the manufacturer for the vehicle, rather than the manufacturer's suggested retail price and invoice price. It’ll cost you $14, but you could save more than $5,000. Note: Some hybrids qualify for tax credits
Go over every clause in the contract with care. Watch for hidden costs: delivery fee, title, license and sales tax. Don’t fall for extended warranties, paint or fabric protection or other add-ons, says Autobrag CEO Danny Chan. Don’t tell the salesperson the monthly payment you can afford early on; he’ll simply lengthen the contract to fit it, Fuller advises.
Negotiating. We all hate this part. But as a small business owner, you already possess the skills of negotiation, so take heart. Besides, the worst is over since you’ll have armed yourself with copies of your research and had a contract faxed or e-mailed to you beforehand. Handling your purchase via computer until the test drive is a neat trick to avoid the possibility of a patronizing salesperson.
Among negotiating processes are cash-backs, incentives and rebates, so check them out online the day you are ready to purchase. But don’t buy a bigger car just to get the bigger discount. In fact, you could negotiate a lower interest rate by skipping the rebate. A dealer might call you after you’ve taken possession of the car, cautions Chan, saying the financing didn’t go through and he needs you to pay more. Don’t fall for it.
A final admonition from Fuller: Never, ever lie to the sales guy. He’s better at it than you are.
Now go buy that new car.
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