Are you thinking of buying a car, but want to make sure you get the best price? Here are a few tips to help you find the right car at the best price.
Buy “off-season.” Peak demand for cars is in the spring and fall, but if you want to find a bargain, shop for a car in December and January when the prices are lowered. That’s when dealerships are eager to move the inventory off their lots to make room for newer models.
Know the real price of the car. Use websites like Edmunds.com, Kbb.com (Kelley Blue Book), and carsdirect.com to find the actual value of particular make and model. If you’re looking at new cars, find the invoice price (what the dealer paid for the car) and the manufacturer’s suggested retail price. If you’re looking at used cars, find the wholesale price and the dealer’s asking price. Also look for current rebates. Knowing this information will help you during your negotiations with dealers.
Comparison shop. Use online resources like TrueCar.com and Cars.com to compare the prices at dealerships in your area. This will save you time and gas money.
Zero Emission Vehicle (ZEV) states have the best prices for hybrids. If you live in a state with strict emissions regulations, like California, you can probably get a good deal on hybrids and battery-electric cars. Manufacturers must sell a certain number of zero-emission cars per year in order to continuing selling in those states, so invoice prices will be lower there.
Look for discounts. Check the automakers websites under their “current offers” webpages. Many offer discounts to students, military servicemembers, and members of credit unions. Deduct these discounts after you negotiate the price with the dealer.
Don’t settle for dealer financing. Since dealers get a commission or flat fee for every loan they coordinate, he or she will probably try to get you to finance through the dealership. There are better options. You’ll get a much better loan rate at a credit union — typically 1-2 percentage points lower than the average.
Cash Rebate vs. 0% Financing. Some dealerships lure customers by offering a cash rebate or zero percent financing. Typically, only 10% of car buyers qualify for these incentives, and you may find you don’t qualify. Even if you do qualify for their incentives, you’ll likely save more money per month by taking the cash rebate and getting your loan through your credit union. To see for yourself, use the calculator at http://www.bankrate.com/calculators/auto/car-finance-payment-calculator.aspx to compare the two options.
Before you head to the lots, do a little research, then talk to one of our loan officers to ensure you get a great auto loan.
Copyright 2017 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.
Car Buyers’ Worst Mistakes
How much money do you think educated car buyers can save over uneducated buyers when buying the same car? Would $5,000 get your attention?
While you may not save as much as $5,000, you’ll save a bunch if you avoid these classic car-buying errors.
* Showing enthusiasm. If you act excited, the sellers know they have a unique product you want. The price goes up instantly. Keep that enthusiasm in check until you’ve driven home. Sneer a little if you like the car.
* Buying in a hurry. If you buy on your first visit to a dealership, you don’t have time to compare. Take your time. Be willing to walk away. The price at most dealerships falls quickly if you move slowly.
* Giving deposits before the dealer approves your offer on a vehicle. Feel free to give a deposit, if you really want a vehicle. But don’t give it until the boss has said “yes.” Some dealerships use deposits to keep you there while they try to convince you to pay more. And you can’t leave if they have your deposit—money, a credit card, a driver’s license, or your kids.
* Being switched to leasing without doing your homework. Because dealerships make a much larger profit if they lease rather than sell, even the best dealership may try to “switch” you. They’ll try to convince you leasing is cheaper than buying. In most instances, it isn’t. If you want to lease, fine. Just don’t do it on the spur of the moment.
* Trading in your old car without knowing its value in advance. A dealership has the right to give you the least you will take for your old car. But you have a right to get the most your car is worth. To know that value, simply clean it up, and try to sell it to several used car departments. The highest amount you’re offered for it is your car’s real value right now. Don’t accept less than that in trade.
* Financing automatically at the dealership. The dealership may be the cheapest place to finance, but not always. To find out, simply bring a copy of the filled-out dealer contract to Greenville Heritage FCU and compare contracts. If the dealership won’t give you a copy, they’re probably telling you they’re not really the cheapest.
Big mistakes, big bucks out the window. We like to help you preserve your money—that’s what credit unions are all about. Avoid these mistakes, and put that money to work rather than throwing it away.
Alan Berry, Greenville Heritage Federal Credit Union
For more information on the beneifits of credit union membership, visit www.greenvilleheritage.com
Copyright 2017 Credit Union National Association Inc.