Buying a car is an exciting time. There are so many possibilities. While your heart may be into the shiny little sports car on the lot, your budget may have something like a nice modest sedan or SUV in mind. This guide will help you narrow your focus so you really can score a better deal next time you buy a car.
Focus on Price First
Whether this is how you view the process or not, the salesperson at the lot may view selling a car as a game. Their objective is to score the best deal for the dealership (and a higher commission check for him or her in the process).
Your mission, however, is to get the best deal for yourself. Begin by negotiating the price of the vehicle. Don’t mention down payments, trades, or any other details. Never give more information than necessary. Simply negotiate the cost of the car. Period.
Value Your Trade-In
Once you’ve reached an agreement on the price, ask the dealership for a valuation of your trade-in. It’s important to wait until after you’ve agreed on a price. Otherwise, the salesperson will view them as a group package and arrange that in their favor.
They’ll often claim they can lower the vehicle’s price by
devaluing the trade-in vehicle or promise more for the trade while refusing to
budge on the new vehicle price. Make them separate issues.
- Use our Vehicle Value Resource to check the value of your car before you go to the dealership.
If the salesperson can’t get you on the price of the vehicle or the value of the trade, they’ll attempt one more gambit - add-ons. One bit of advice to consider is purchasing these add-ons from the credit union instead. If you are interested in an extended warranty or GAP (Guaranteed Asset Protection) coverage, you can often buy them from the credit union at a significantly lower price.
Consider a Loan Pre-Approval
Getting a pre-approval for your auto loan helps you make better-informed buying decisions, lets you know how much money you have to work with, and ensures that you won’t go over your budget.
Plus, since you’ll have a specific dollar amount that you’re approved to borrow, the dealer isn’t going to try to sell you features you can’t afford or unnecessary add-ons. While some dealerships may recommend working with their lenders to get a “better deal,” be wary. Many will use tactics like extending loan terms to get the monthly payment lower, enabling them to sell you a much more expensive vehicle outside of your budget.
In some cases, a loan pre-approval can also help you negotiate a lower price on the vehicle you want. Some dealers agree that a bird in the hand is better than one that flies away, so they may be willing to go lower on the price rather than lose the sale altogether.
Seeking a loan pre-approval from the credit union (since it is a not-for-profit organization) means that you’re probably scoring a better deal on your financing than the dealership can match. That’s great news for you!
We’re Here to Help!
Buying a new car can be both exciting and stressful. However, we’re here to help make the process easy on you and your finances. Whether you’re looking for a savings account to help you save for a down payment, auto financing, GAP insurance coverage or extended warranties, we’ve got you covered.
Visit one of our convenient branch locations or call 800-336-6309 today to learn more about how we can help you score a better deal on your next car!
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.