Rev Up Your Car-Buying Strategy

Navigating the car buying process can feel like driving on winding roads. But there are many ways to make your hard-earned dollars go further. So, buckle up and enjoy a few savvy tips that will help save you money and steer you toward an excellent car-buying experience.

When you’re ready to buy (or refinance an existing loan), our knowledgeable professional Member Service Representatives can help guide you through the hassle-free auto loan process to determine what term works best with your monthly budget.

Do Your Research First
The last thing you want to do is walk mindlessly onto a dealer lot, especially as prices and financing costs are rising. Spending some time researching could save you hundreds, or even thousands, on your new car. Here are a few tips to get started:

  • Start Your Search Online: It’s much easier to browse vehicles online without a salesperson following you around. Once you determine the car you want, explore the different models, and choose which best fits your needs.
  • Expand Your Search Area: While your local dealership might be convenient, dealers a bit further away might have better pricing or more selection. Again, put the Internet to work for you and include dealers 20+ miles outside your immediate area.
  • Compare Incentives: Car makers and dealerships regularly run promotions. Identify all the incentives available at various dealerships. Then, determine if there are any restrictions or requirements tied to those deals.
  • Obtain Quotes: Again, there’s a lot less pressure obtaining quotes online than in-person. Request a few quotes from different dealerships. This will help you determine a price range and identify any additional fees added to the car purchase.

Obtain a Pre-Approval
A pre-approval is a document stating that your lender has approved you to borrow a specific amount to purchase a new car. It’s one of the most powerful tools when it comes to car buying. To obtain a pre-approval, you’ll want to apply for an auto loan with your lender prior to visiting a dealership. Once you have your pre-approval, you’ll experience a slew of perks.

  • How Much You Can Afford: Your lender will review your current finances and help you determine a reasonable amount you can afford to spend on a new car. This step will also aid you in narrowing down your new car search by price.
  • Negotiating Power: Dealerships know they cannot sell you a car for over your pre-approved amount. Consequently, they will often make concessions or avoid pricing games altogether if you have your pre-approval in hand.

Pre-approvals are very powerful tools when purchasing a new or pre-owned car. If you’re at a dealership and they try to convince you to finance elsewhere, that’s a clear sign they are trying to get you to spend more money.

Know Your Trade-in Value
 If you have a car to trade in, you can maximize your trade-in value with a little extra effort.

  • Value Your Trade Online: Begin by obtaining online estimates of your trade’s worth. Both Kelley Blue Book and NADA are good starting points. Use these values as benchmarks in your research.
  • Obtain Appraisals: Next, visit local dealerships to obtain a trade-in appraisal or purchase price. Many dealerships will buy your car even if you don’t buy from them. Use these written appraisals to determine the realistic value of your trade.
  • Negotiate: Finally, when you head to the dealership to purchase your new car, bring your written appraisals to help negotiate your trade’s value. Appraisals from other dealers will prevent salespeople from undervaluing your trade-in.

We’re Here to Help!
If you’re ready to get pre-approved, HFCU is here to help. Like many car dealerships, we offer GAP (Guaranteed Asset Protection) programs to protect your investment. We also offer Mechanical Breakdown Protection to help cover some unexpected major repairs, as well as Credit Life and Disability Insurance Protection.

Please stop by or call any of branch locations to learn more!

Each individual’s financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.