Many consumers make big mistakes when buying a new car. This includes mistakes with financing, as well as buying the right car to fit a particular budget or needs. Here are some helpful tips and advice to help you make a more informed decision when buying a new car.
1 Set a realistic car budget
Your first step when buying a new car should always be setting a realistic budget. Ensuring you have a monthly payment you can afford is an important part of your overall financial health. Look at your budget and figure out a payment you can afford. Take into consideration the fuel and insurance costs for a new vehicle, as well as your down payment. Guthrie Community Credit Union’s online auto loan calculator can help you determine a monthly payment based on the price of the car, down payment, etc. It’s a handy tool for helping you to determine your budget.
2 Shop around for an auto loan and get pre-approved for a loan before you begin dealership visits
This is probably the most important tip we can provide. Pre-approval will arm you with more negotiating power when shopping. Your local credit union can be a great help when it comes to getting pre-approval for a new car loan. Guthrie Community Credit Union provides members with auto loan pre-approvals that will give you greater confidence when negotiating a price on a new vehicle. Pre-approval will also provide you with a good idea of a price you can afford. Shop around for the best auto loan rates and terms before getting your pre-approval. You may find some great offers you didn’t expect. For instance, Guthrie Community Credit Union is now offering the Advantage Plus Auto Loan promotion. It’s designed to get car buyers behind the wheel with a payment they can afford offering up to 40% lower payments than traditional auto loans. It’s like a lease, but you own the vehicle. Tap to learn more.
3 Avoid buyer’s remorse, begin your car shopping with advance online research
Take advantage of the internet to research and compare makes and models to find a vehicle that not only fits your budget but your needs as well. Remember, a car salesman has one main goal and that is to get you to buy a car right now. If you have a good idea of what you want and can afford before stepping foot in the dealership, it just might help you avoid making a big mistake with the wrong vehicle. Advance online research will help you find and compare various cars in your local area. You can also research vehicle specifications, reviews, and safety information. Reputable online sites that can help with your research include Kelley Blue Book, Edmunds, cars.com, and Consumer Reports. Use any of these sites to plug in and compare the make/model for the vehicles you’re interested in. Most offer side-by-side comparisons. While you’re doing your research, use Edmunds or Kelley Blue Book to research the value of your trade-in as well. You will see an estimated price for trade-in at the dealership, as well as a price to sell it on your own. Another helpful tip before heading to the dealership.
4 Time for a test drive
You’ve let your fingers do the walking with your research, now it’s time to test drive those vehicles that most interest you. Don’t get too emotionally attached to any particular vehicle because you haven’t even begun negotiating. A thorough test drive will ensure the vehicle has the space and features you need. While you’re in the process of test-driving you can ask about any dealership deals. There may be a vehicle that isn’t selling well or one that’s sitting on the lot with newer models that they’d like to get rid of. You may find a great bargain just by asking. Looking at previous model years can often save you big bucks. Visit more than one dealership for better price comparison and don’t fall victim to high-pressure salespeople. Let them know you are only shopping around and comparing right now.
5 Negotiate a great deal
When beginning negotiations, don’t negotiate based on monthly payment. Although you want a monthly payment that will fit your budget, a dealership can manipulate the term to get you the payment you want. This doesn’t mean you got a good deal. Price is what matters and you’ve already been pre-approved for a loan. Be vague if they ask for your monthly payment goal. By now you will have checked online resources to get an idea of price ranges for various vehicles. If a dealer offers you a price you think is too high, you can show him your research, so he knows you’re an informed buyer. Ask for “out-the-door pricing.” Bring up your trade-in only after you’ve agreed on a price for your new vehicle. Finally, don’t be afraid to walk away. You always want to compare among several dealerships for the best pricing.
We hope these five tips help you better navigate the tricky waters of buying a new car. Guthrie Community Credit Union is here for all your auto loan needs.