Car Buying Tips

Whether you are a first-time car buyer or you’ve been in the game for a while, below are a few tips and tricks from the pros at CFCU to remember when you’re trying to get the best deal.

    1. Determine Your Budget
    2. Get Pre-Approved
    3. Focus on the Total Purchase Price
    4. Know When to Shop
    5. Don’t Be Afraid to Walk Away

It’s easy to fall in love with that new or new-to-you car smell and forget about getting the best deal. Avoiding pitfalls in the process can literally save you thousands and give you peace-of-mind for your purchase.

Determine Your Budget

The first step for a savvy car shopper is to determine how much you can afford in your monthly budget. Don’t forget to include fuel, insurance and the cost of tax and registration. If you’re buying an older car, you might think about mechanical breakdown protection or savings to cover repairs and maintenance. You’ll need to decide if you’re going to pay for some of these expenses in cash or if you want to roll costs into your loan.

Get Pre-Approved

Once you’ve made these decisions, it’s a good idea to come to the credit union. Our experts can work with you to get pre-approved for an auto loan in the total amount you’ll need and give you some guidance on the cost of vehicle registration, taxes, mechanical breakdown, trade-in values and the book value for the models of vehicles you are considering. Being pre-approved and the knowledge you gained at the credit union gives you a significant advantage when negotiating the purchase. You know what to expect, reasonable costs and an approximate monthly payment.

Focus on the Total Purchase Price

When you visit the dealership, the conversation often shifts to the monthly payment. Dealers like to focus on the payment because it is the easiest cost to sell a shopper, but it masks the cost of add-on products, documentation fees, trade-in value, down payment and purchase price. When you negotiate, look at the total amount of the vehicle including any add-ons, less your trade value, then less any down payment. This keeps the conversation transparent and keeps your pre-determined budget in sight.

Know When to Shop

Knowing when to shop can also ease the stress of negotiation. Shopping near the end of the month often gets you the best deal. Dealers have monthly goals and quotas, so they are more likely to cut a better deal toward the end of the month. Also, shop later in the day, it’s easy to get worn down in all day negotiations. If you show up later in the day, the dealership has less time to draw out the process. Their goal is to get you in the vehicle, same day.

Don’t Be Afraid to Walk Away

To that point, don’t be afraid to walk away from a bad deal or if you feel uneasy. You’re in the driver’s seat and the one making the purchase. Also, comparison shop multiple dealers. You can often handle some, if not all, of the negotiations beforehand via email or phone before ever setting foot on a car lot. Just remember to have your pre-negotiated terms in-hand when you get to the dealership. Also, many traditional dealerships now have online no-haggle purchasing options to keep up with competition from disruptors, such as Carvana. If you aren’t certain of your negotiating skills, these are great options!

Have any other questions about car shopping? Call or visit your neighborhood CFCU branch.

P.S. – Just by reading this and doing research, it shows that you’re on the path to an informed purchase decision!