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How to Switch Credit Cards and Save Money While Doing It

We’ve all done it. You open a credit card and the rates look great at an initial glance—because you’ll never miss a payment, right? A big purchase comes around and you find yourself in a little more debt than you anticipated. That’s when your interest rate hits hard, each time increasing your already-unpayable balance to even higher levels. What should you do when credit card debt gets a little out of hand? In this blog, we’ll focus on how to successfully switch credit cards, and transfer your credit card balance, in order to both lower your interest rate and save you money.

What Are My Options?

Here is a short list of things you can do when you find yourself faced with an overwhelming balance:

  • Dip into your savings account. One way or another, the debt has to be paid or it will naturally accumulate interest via the rate you and your credit company agreed upon. This is typically the primary option since you won’t have to deal with any fees or interest rates from new loans. Understandably, however, you may not have the cash on hand to pay the balance and it’s not a practice you’d want to make a regular habit of doing.
  • Pay off the debt with a loan. This type of loan is designed to pay off your credit card debt and allow you to make payments according to a flexible repayment plan. The interest rate will be drastically lower than your credit interest rate, allowing you to pay off the principal balance much faster. That said, it’s always important to read the terms thoroughly and ask questions—some debt payoff loan promotions may have a maximum loan amount or a slew of extraneous fees.
  • Transfer the balance to a lower-rate card. This debt consolidation option is typically the most cost-efficient. But it really depends on who you choose to work with. Big banks often have low or even 0% APR offers, but they’re almost always for a limited time and change to a high-interest rate after a couple of months. By contrast, some credit unions, like Common Trust, will give you an ongoing rate that never changes, so you can rest easy and budget accordingly. The rate will be much lower than that which you are currently paying, so you’ll be able to pay off your debt quicker. Promotions can also impact the rate you’ll receive, ultimately saving you even more money.

Transferring Your Credit Balance

So, you spent too much at the annual outlet sale and found yourself in some serious debt. Time to panic, right? Wrong. While there is a bounty of debt-eliminating options you can resort to—including a Debt Payoff Loan or Debt Consolidation Loan—a balance transfer credit card is typically the smartest, safest option.

To reap the benefits of a transfer balance credit card, you’ll start by filling out a card application. As with all big steps, be sure to ask as many questions as you need to finalize your decision. Make sure to double-check that there aren’t any drastic opening or closing fees, surprise rate increases, or any other types of random costs. In order to be approved for the new card, you may be subjected to a soft inquiry credit-check to be sure you make your payments on time and aren’t a huge credit risk. The bank will then pay off your credit card company for the current balance, and in exchange, you’ll owe the same balance with a comparably-lower interest rate. It’s that simple!

Changing Future Habits

After the dust has cleared and you’ve made the final payment to your Credit Balance Transfer account, you’ll likely want to re-think the way you manage money so you avoid future debt pitfalls. Making a resolution to manage and spend better is an optimal preventative measure to any type of debt.

The key to a healthy credit score and credit report is managing your money in a productive way and staying out of debt. Try to avoid spending money that you don’t have, and keep frivolous purchases to a minimum. Doing so will allow you to keep track of balances and ensure no line of credit is getting out of hand. Don’t open too many credit cards (even if the incentive is really great)—managing multiple accounts can lead to missed or late payments and breed into skyrocketing interest balances once again. If you do have multiple accounts open, checking in with Credit Karma every once in a while will help to manage all balances and keep them in check. Though this may not be the end-all to any financial hardship, it’s a huge step in the right direction.

Struggling to keep up with credit card debt? You’re in luck! Until March 31, 2020, Common Trust is proud to be offering our Credit Card Balance Transfer promotion. With a rate of 6.99% that stays fixed until your entire balance is paid off, you can focus on paying off your principal debt balance and not worry about having to get it done in a stressful, limited time period. This offer only lasts a few months, so don’t miss your chance to live debt-free—give us a ring or reach out via email today!

Is a Home Equity Loan Right for You?

A new year means new goals, adventures, and purchases. Are you financially prepared and in good standing to follow through with your dreams? Whether you’re looking to make big home improvements, pay off debt, fund a loved one’s education or simply have extra cash for a special project, a home equity loan could be the right solution for you to quickly get you the funds you need. But before we launch into what defines a “good” home equity loan and how to get one, let’s get started with the basics of this source of financial backing.

What’s a Home Equity Loan?

Similar to the first mortgage you used to initially purchase your home, a home equity loan is a second mortgage on your home. With this type of loan, you’re borrowing money against the value of your home without any of your unpaid balances. The terms will vary depending on promotion, company, and creditworthiness. Some will have fixed rates, whereas some may have variable rates based upon U.S. economic trends. Some may also have numerous other fees attached—something to look out for. 

How much will the loan be for?

The maximum home equity loan you’ll be eligible for would be the total value of your home minus any outstanding balances. Depending on which bank or credit union you decide to pursue the loan through, home equity loan values can vary. At Common Trust, your loan can be approved for up to Eighty Percent (80% LTV) of the appraised value of the real estate, minus First Mortgage balance before minimum dollar amount. Loan-to-Value amount is the ratio the bank will allow you to be approved for (ex. 80% LTV of a total value of $100,000 would be an $80,000 loan). The minimum loan value is $10,000 and the maximum dollar amount is $300,000. Imagine what you could do with such spending power! The possibilities are endless.

A simple equation for use in determining the Home Equity Loan you’re eligible for: 

[(Appraised Value of Home) – (Outstanding Balances)] × (LTV%) = Total Loan Value

Is a home equity loan a good idea?

Home equity loans are a great way to access funds that you need to do the things you love. If you are in good financial standing and have a good grip on managing your finances in general, you’ll surely reap the benefits of a Home Equity Loan without any negative drawbacks. If you find yourself struggling to manage your budgeting and always stress about finances, a home equity loan may not be the right choice for you. 

Are there any cons?

As with any financial investment, if you aren’t responsible you may find yourself in deep waters relatively quickly. It’s important to understand your financial standing and whether or not you can afford to take out such a loan. Be sure to confirm all interest rates before signing off on the loan to prevent any surprise fees, and never be afraid to ask as many questions as you need to finalize your decision. This is likely one of the biggest loans you’ll take out, so make sure it’s the right choice. 

There are a few other very notable disadvantages to a Home Equity Loan if used frivolously, however. Keep in mind that your home is being used as collateral to back this loan, so if there are any instances where you can’t make payments they can technically take possession of your property. Since your loan is based on the equity of your home, which can decrease in value depending upon economic trends, you may end up owing more money on your home than it’s actually worth if there’s a serious drop in appraised value. This is commonly known as being “underwater” or “upside-down”. Though these drawbacks can easily be prevented with more research on your loan terms and home value, they are still important to consider when investing in this type of loan. 

Think a Home Equity Loan could be right for you? We have good news! Until March 31, 2020, Common Trust is proud to be offering our 10 Year Home Equity Loan promotion. With competitive rates as low as 4.99*, you can get access to the funds you need and pursue the opportunity you’ve been waiting for. Take advantage of our low rates while you can—give us a ring or reach out via email today!

*Actual rate is subject to creditworthiness

5 Steps to a Debt-Free 2020

The holiday season is a great time to buy sentimental gifts for all of your family and friends. Unfortunately, this also means spending much more than you typically do during the rest of the year. After the holidays are over, you can be left with a lot of debt. With 2020 in full stride, has your debt got you down? Here are 5 steps to a debt-free future.

1. Minimize Your Spending

When debt is growing each day from high-interest rates leading to even higher balances, it can become a serious hindrance to your mental health. Try to minimize spending during this time of repayment. The more you add on to your principal balance, the more money you’ll end up having to pay in the long run. Only buy the things you need, like groceries, gas, utilities, and bills of course. If needed, try to stay away from any stores or places that may lead you to splurge. Don’t highly restrict yourself, but don’t spend frivolously either.

2. Take Advantage of a Low-Interest Loan

If your debt is getting out of hand, it may be time to consider paying it off with a lower-interest loan in order to prevent tacked-on interest payments. Since most credit cards usually rest around a 20% APR interest rate, that’s a lot to save over time. Act quickly when you realize the interest rate on your credit card is starting to rack up, and start searching for a debt payoff loan that works best for your needs. Either way, you’ll likely be paying around 10% less on a loan than in credit card fees.

3. Credit Balance Transfers Are Your Best Friend

Another quick alternative to lessen the blow of built-up debt is a Credit Card Balance Transfer. Similar in savings to a loan, this is when you transfer your higher-interest balances onto a lower-interest credit card and pay a lower rate until your balances are paid off. Over time, this solution will save you loads of money and help you make more payments on your principal balance rather than mountains of accumulating interest.

4. Save, Save, Save!

In this instance, you may not have been prepared for the oncoming holiday debt. Make it a New Year’s resolution to start saving more in preparation for big spending. It’s nice to not think about your funds when continuously swiping your credit card, but it’s even nicer to have a large nest-egg to fall back on when you’re in need. 

Open multiple savings accounts to track these goals and save up enough to shower your friends and family with the gifts they deserve. The incentive for planning ahead is a higher interest rate, meaning you’ll have even more money when the terms are up. Select the type of account that works best for you, and start stockpiling those pennies! With this easy step, you’ll be ready for any financial hardships or random splurging. 

5. Steer Clear of Future Debt

We understand how hard it is to stay out of future debt. It’s easy to grab a whole new wardrobe while scouring the racks of Nordstrom, or a funky piece of furniture at that cute antique shop on the corner. Try to build the habit of saying “no” as you move into the new year. 

If you absolutely must buy that thing, make sure you have a reputable and low-interest credit card at your side. And if you find yourself in another financial sinkhole, don’t hesitate to pay off debt with lower-interest loans before the interest starts accumulating. If you have a hard time staying true to your spending limits, try constructing a budget and sticking to it. Staying out of debt will have a long-term benefit on both your credit report and score.

Holiday debt lingering a little longer than intended? It’s time to find a solution. Our team is highly knowledgeable in financial planning and can help you get back on track. With low-interest rates and a wide variety of flexible products, a better financial future is right around the corner. Don’t let the pressure of debt bring you down – give us a ring or reach out via email today!

Dealership Don’ts: 5 Tactics to Get the Best Deal on Your New Vehicle

Car dealerships, like all businesses, are out to make as much money as possible — and as soon as you enter the showroom, their target is on you. There’s a reason in-person vehicle negotiations average about 3 hours: The dealership assumes that once you’re captive, you’re there until they make a deal. But don’t let this process force your hand. Strategize up front with these 5 “Dealership Don’ts” to ensure you have the right defense and tactics to successfully negotiate the right car for you at the right price for your budget.

Don’t Talk Too Much

Dealerships know how to make you more comfortable — friendly smiles, soft chairs, weekend tryouts, even free popcorn for the kids. But take care not to let your guard down: Every bit of small talk offers a salesperson more insight into how much they can manipulate a vehicle’s price. Just changed jobs? Trade-in not in great shape? Kid going to college? Absolutely in love with the test drive? Not great at math? Really, don’t mention it.

Don’t Agree to an Up-Front Credit Check

Six out of 10 shoppers are undecided when they walk into the dealership. Don’t agree to a credit check until you are sure that you’ve found the vehicle you want because every “hard pull” lowers your overall score by a few points. It’s also important that you know your credit score before negotiations begin — shady dealerships can sometimes manipulate that number to increase your payments and their profit.

Don’t Be Oversold

You walked into the dealership looking for mid-sized hatchback; don’t leave in an overpriced SUV. The salesperson’s job is to upsell you with fancy features, fully loaded extras, and “exclusive” deals, but don’t buy into it. Studies show 59% of car buyers research their purchase online before walking into the showroom; staying confident in your purchase decision will make you less susceptible to suggestion.

Don’t Discuss Payment Options Too Soon

Dealerships make a lot of money on financing deals. If you’re not using their financing, they will try to compensate by raising the price, lowering your trade-in, or bundling add-ons (keyless entry, free oil changes, etc.) that you didn’t ask for. If you are planning on paying cash or have come to the table with your own pre-approved financing deal (we offer those at CTFCU!), it’s in your best interest to keep that to yourself until you’ve locked down a price.  

Don’t Be Afraid to Walk Away

There’s a lot of power in being able to walk away from a deal that won’t suit your needs — even if you’re still tempted to sign off. Your trade-in value is low-balled, the monthly price is higher than you’d like, the color isn’t for you — whatever your reason, know that you can at any stage leave when you’re not 100% happy with a proposed deal. The dealership might be upset, but knowing they are losing business could entice them to lower your costs or add free incentives.

The best tool to take with you while vehicle shopping is pre-approved financing from Common Trust Federal Credit Union. Our ongoing auto loan promotion offers you rates as low as 2.49% with terms at 60 months, 72 months for 2019 models, or 84 months for loans of $50,000 or greater. Visit our auto loan promotion page or stop by the branch today to get started!

Pay Down That Debt! Transfer Your Credit Card Balance in 3 Easy Steps

The bills are piling up, late fees are drowning your principal payments, and too often you let those collection calls roll to voicemail. It’s time to consider a faster, more cost-effective way to manage your debt!

Credit card balance transfers allow you to pay off numerous debts by consolidating them onto one card with a lower interest rate. This gives you the breathing room to catch up with payments and begin to repair your credit score.

Completing the transfer scenario can be tricky, though. At Common Trust Federal Credit Union, we’ve consolidated this into 3 simple steps to reduce your debt and get started on the path to financial freedom.

1. Log current balance and interest rate info

If you’re looking to disrupt the status quo, you have to start by knowing the status! Spend some time researching your current balances, payoffs, and interest rates, and keep this information on hand. This will help you plan what kind of credit card balance transfer plan will work for you and will set the foundation for how to obtain the help you need.

2. Find and apply for the right balance transfer card

There’s no one-size-fits-all solution to paying off debt, even with credit card balance transfers. It’s critical you choose a card that best fits your immediate and long-term financial needs. The fine-print terms and conditions are the first place to start your research: Is there an interest-free period, and how long does it last? How quickly must the debt transfers be made? Is there a transfer fee? Once you have the answers you want, it’s time to apply for the card.

3. Pay off your debt

Once approved, call your new card company and initiate the transfers — then watch those debt numbers shrink! With the right solution in place, you will be paying off large chunks of debt while making affordable payments toward your principal balance. The plan only works if you work it, so make sure your monthly budget factors in your payment. Missing even one payment can immediately end interest-free periods and cost you more in the long run. Take the time to educate yourself on good credit behaviors to ensure you are starting fresh and can stay ahead.

Our loan experts are here to help! Explore the opportunities available today with Common Trust Federal Credit Union’s Credit Card Balance Transfer program. Through June 30, 2019, you can get rates as low as 6.9% until your credit card balances are paid off — plus the rate is good on purchases, advances, and balance transfers. Visit our credit card balance transfer promotion page or stop by the branch to learn more.

6 Summer Safety Tips for Kids

From biking to swimming to playing sports, summer is the time of year where kids can fully enjoy the outdoors. However, with so much free time during the summer, there’s also more room for kids to get injured. The following are six tips to make sure your kids have a fun and safe summer!

Pack the SPF

It takes as little as 15 minutes for the sun to burn unprotected skin, according to the National Institutes of Health. Once the skin is burnt, the damage is irreversible for life. No matter whether you are going to the pool, the beach or the park, always pack sunscreen with at least SPF 30 in it. Don’t forget to re-apply after about 2 hours in the sun or after swimming and sweating.

Stay cool

Did you know that small children are more susceptible to dehydration than adults? When kids are playing outside during the hot summer weather, make sure that they take breaks to drink fluids and cool down. For about every 20 minutes of activity in the heat, children should drink 1 cup of water in order to prevent dehydration and heat exhaustion. In addition, try to remind them to drink water continuously throughout the day instead of only when they are really thirsty.

Keep chemicals out of reach

During the summer, chemicals like gardening sprays, insect sprays, and pool chemicals are constantly in use by adults. When these chemicals are not being used, make sure that they are put away and out of reach from children. Kids that get their hands on these dangerous poisons run the risk of ingesting or spraying in their eyes, causing serious damage.

Car safety

It doesn’t have to be a 90-degree day for car temperatures to quickly become dangerously high. The temperature inside a car can rise 20 degrees in as little as just 10 minutes. Because of this, never leave a child alone in the car, even if you’re just running into the store for a few minutes. Leaving a child in a car puts them at serious risk for developing heat stroke, a potentially deadly disease that can take effect in just a few minutes. Also, make sure your car is always locked when not in use to prevent kids from playing in it and getting trapped inside.

Prevent bug bites

We all know that the summer months means the season of pesky insects like wasps, ticks, and mosquitos. These bugs not only cause painful bites but also may carry dangerous diseases. When outside, especially at night, use an insect repellent to guard against ticks and mosquitos which can carry Lyme Disease and West Nile Virus.

Many insect repellents use DEET, an effective insecticide, but a potentially toxic chemical. Choose a repellent with less than 30% DEET, and always wash the product off before bed to prevent overexposure to the chemical. To protect against tick-borne illnesses teach kids to avoid playing in fields with tall grass, and always do a tick check before bed.

Ride carefully

Kids should always wear a properly fitting helmet whenever playing on anything with wheels, whether that’s a bike, scooter or skateboard. The helmet should be secured tightly to their head so it doesn’t fall backward or forwards, and if they are riding a bike, check to make sure it fits them properly. Their knees should not be hitting the handlebars, and their legs should not be completely outstretched while pedaling.

If your child has outgrown their bike, now’s their chance to win a new one with CTFCU’s youth account promotion. Open a youth account for the chance to win a new bike or an Amazon gift card!

If you’re looking for some more summer safety tips, join Common Trust Federal Credit Union at our second annual Child Safety Day on June 1st. During the event, we will be giving away free child safety kits and will have a fire truck for kids to play on!

4 Mistakes to Avoid When You Want to Build Your Credit

From buying a car to paying for college, having good credit is essential for so many of the financial endeavors that go on throughout life. Credit refers to your reputation as a borrower, and it signifies to borrowers how likely you are to repay your loans.  A long and positive credit history helps you to secure loans with low interest rates and may even help you land a job or rent an apartment.

Unfortunately, you can’t build good credit without using credit. It’s a process that takes time, and if you’re trying to build it quickly, you might make some harmful mistakes along the way. The following are four mistakes to avoid when you’re beginning your credit journey.

Signing up for multiple new credit cards

One of the biggest mistakes that many first-time credit card users make is signing up for a bunch of cards at once in hopes of boosting their credit quickly. This is a risky practice as the more credit cards you open up, the harder it will be to keep up with their monthly payments. If you open up five new credit cards, and you put purchases on each of those cards, you’ll have five more monthly payments to juggle. In addition, each time you apply for a credit card an inquiry is added to your credit report which can drop your overall score.

Signing up for the wrong credit card

While having a credit card is a great way to start building credit, some cards do more harm than good. From sneaky fees to high-interest rates, signing up for the first credit card you find may end up hurting your credit. Make sure to do your research beforehand and find a card that suits your own financial needs. Some credit cards tempt members with money-back bonuses so always do your research before to ensure that it offers the terms you want before you apply. Common Trust FCU offers Mastercard credit cards with low-interest rates and no fees, making a perfect option for someone just starting out.

Spending more than you can afford

If you’re trying to build credit, one habit to steer clear of is borrowing more than you can afford. While you might be excited about opening up your first credit card, avoid the temptation of overspending on your new card. Try not to use more than 30% of your available credit in order to keep your credit utilization score low. Credit utilization, or how much of your available credit you have used, can negatively impact your credit score when it’s over 30%. Be cautious about overspending on your cards as it can end up harming your credit rather than helping it.

Making late payments

Did you know that your payment history typically makes up over one-third of your credit score? Your payment history is primarily comprised of whether you missed a payment and how severe and frequent the missed payments were. Because of this, consistently making late payments or missing payments altogether can stay on your credit report for up to seven years. Even if you can only pay your minimum balance, make on-time payments to positively build your credit. In addition, getting into the habit early on in life of making timely payments will benefit you in the long run.

Building good credit is essential, but you also want to make sure that you do it the right way. If you currently don’t have any credit, taking out a credit builder loan from CTFCU is a great way to get started. Running until May 31st, this low-interest loan is the perfect solution for growing your credit history easily and safely. Visit our credit builder loan promotion page to learn more or stop by the branch to get started!

Promoting Financial Literacy in Our Community

Improving financial literacy in our community is one of our primary goals, and we believe that starts with offering extensive financial education resources for our members. To celebrate how we work to promote financial literacy in our community, we wanted to share some of the services that we are proud to offer.

Youth Accounts

Financial literacy is an essential skill that should be taught early on in life. This can be practiced by encouraging kids to save and manage their own money at a young age. We offer youth accounts for our members’ children and family for exactly that reason. This month we are offering a promotion on our youth accounts to encourage younger generations to start practicing money management. From now until June 1st, those who open a youth account will be entered to win a bike or an Amazon gift card.

Financial Education Center

Whether you’re a beginner at managing your finances or an expert, there’s always room to learn more. That’s why we offer a free financial education center for our members. On this online platform, you can find short interactive courses on topics essential to financial success, such as saving for a home and paying for college. After completing these courses, you’ll have a deeper understanding of the best ways to tackle big financial endeavors.

Financial Literacy Program at Woburn Middle School

Another service that we are proud to offer to our community is our Financial Literacy Program at Woburn’s Kennedy Middle School. With this program, representatives from the credit union teach two classes that help middle school students build a strong foundation for financial responsibility. In March we hosted the first financial literacy auction at the middle school where students were able to take profits from their school business and bid on auction items. You can learn more about CTFCU’s Financial Literacy Auction in our blog post all about the event.

Woburn High School DECA Program

In addition, we’ve also had the opportunity to donate to Woburn High School’s DECA Program, an organization that prepares students for their careers through competitions, conferences and other forms of professional development. For the past two years, the credit union has donated to send students to a state-wide competition in Boston. This is a valuable program as it helps to boost students preparedness for the workforce, which in turn helps set them up for financial success.

As we grow our membership in Woburn and the surrounding communities, we look forward to expanding our financial resources to reach more individuals across new towns and cities. Stay on the lookout for more financial literacy resources and programs as the credit union continues to grow!

4 Smart Ways to Use a Home Equity Loan

As home prices continue to rise, homeowners are sitting on a growing amount of equity in their homes and an increasing source for extra cash. While tapping into that cash to fund an expensive lifestyle might be tempting, using your home’s equity should be done cautiously and with a specific reason in mind. Continue reading for four of the smart ways that you can safely use a home equity loan to improve your financial future.

Home improvements

Home renovations are one of the most frequent uses of home equity loans and are also typically one of the smartest options. Home improvements are a great decision because if done right, they raise your home’s value and make for a great investment. If you decide to use a home equity loan for this, focus on improvements that will increase the home’s value but also will improve its functionality or make it a more enjoyable living space for you.

If you’re planning on selling your home soon, make sure that you are spending on upgrades that shoppers are looking for so you can make back as much of your investment as possible. It’s best to focus on upgrades such as fresh paint, new flooring, or bathroom and kitchen updates, which are features that buyers frequently look for.

Consolidate high-interest debt

Another smart way to use a home equity loan is to consolidate debt. If you are currently making payments on multiple high-interest credit cards or loans, taking out one home equity loan to consolidate these expenses offers numerous benefits. One benefit is that by consolidating your debt into one payment, you have the potential to save thousands of dollars on interest. Consolidating with a home equity loan also gives you the freedom of making just one payment per month, rather than coordinating multiple monthly payments. Lastly, home equity loans have a designated loan term, so you will know exactly when the debt will end, in comparison to revolving credit card debt.

Investment properties

Using a home equity loan to fund an investment property is another smart option if done properly. If you have built enough equity in your home you may be able to use a loan to pay for a downpayment or even for the full cost of an investment property. However, when purchasing a second property, you should have the intent of receiving a return on your investment by either renting or reselling it.  While it might be tempting to use a home equity loan to purchase a vacation home for your family, avoid spending it on something that will not offer the opportunity to improve your financial future.

Emergency expenses

If you are faced with expenses from an emergency situation, tapping into your home’s equity might be the right solution for you. Whether you are faced with a medical emergency or job loss, paying for your expenses with a home equity loan is a smart option, especially if you do not have an emergency savings fund prepared. Even though you will not be using the loan to better your financial future, when life hands you an unexpected situation, taking advantage of your home’s equity can provide you with the necessary funds.

Now that you know the smart ways to use a home equity loan, if it’s the right choice for you, get started with CTFCU. From now until the end of March, CTFCU’s home equity loan promotion is offering rates as low as 4.99% with terms at 10 years. Visit our promotions page or stop by our office to learn more.

6 Tips for Negotiating with Car Dealers

For many, the thought of entering into a car dealership to purchase a new car is very intimidating and unpleasant. While car dealers are professionals who know how to persuade, you shouldn’t let the dealership scare you away from purchasing your dream car. By sticking to the following tips you can make the car buying process run much more smoothly and get the price you want.

Be prepared

In order to best negotiate with a dealer, one of the most important steps is to do your research beforehand. Experienced dealers know how to convince prospective buyers to settle for the price that they want, even if that price is much higher than the car’s going rate. Do your research in advance to learn everything there is to know about the car, such as the sticker price and what other shoppers have paid for it. Armed with this knowledge, you will be able to stand your ground against a dealer who is offering too high of a price, and you’ll know when it’s time to walk away.

Be polite

When negotiating a deal, you might think that it is a good strategy is to act like you are in charge or to threaten to walk away; however, one way to receive the price that you want is to treat the dealer politely. Car dealers work with shoppers every day who are stressed and who take their frustrations out on the dealership’s staff. By remaining respectful and polite, they will be more likely to give you the price you are looking for.

Avoid showing your emotions

While it’s important to remain polite, avoid showing your hand right away to the dealer. If you openly gush over the car and let the staff know how much you love it, they’ll know that they will have the power to convince you to purchase for any price. Present yourself as someone who is in control and rational, rather than emotional, to help keep the power in your hands.

Separate your trade-in

One trick that many shoppers fall for at the dealership is negotiating their trade-in in the same transaction as the new car. This is a trick used by dealers to low-ball your trade-in’s value and disguise the real cost of the car. For example, they might tell you that they dropped the car’s price by $1,000 so it appears that you are getting a great deal; however, they are really making a profit off of your trade-in. To avoid this, treat your trade-in as a separate transaction. Once you have settled on a purchase price for the car, then negotiate the price of the trade-in. Handling the trade-in and purchase price separately is the only way to ensure that you are receiving good deals on both.

Avoid expensive add-ons

Once you’ve settled on a price and you are almost to the end of the car-buying process, don’t let your guard down. This is the stage where dealers will attempt to convince you to purchase costly and unnecessary add-ons such as extended warranties or fabric protection. When you are in the researching phase of car shopping, decide on the extras that you will purchase and politely say no to any other add-ons that the dealer tries to sell you on. While it might be hard not to be persuaded in the moment, you’ll thank yourself later when you have saved thousands of dollars.

Secure financing beforehand

One trick to negotiating with a car dealer is to receive a pre-approved auto loan before you head into the dealership. A pre-approved loan lets dealers know exactly what your budget is so they won’t be able to push the price higher. Typically, the dealer will work to find a price that works with your pre-approved loan or they risk losing your sale. Securing your own financing beforehand is also a good way to avoid the stress of negotiating with the dealership’s financing department.

From now until the end of March, CTFCU is offering an auto loan promotion with rates as low as 2.75% and terms up to 84 months. With the help of an auto loan from CTFCU as well as these tips for negotiating, you will be able to best bargain with a car dealer and receive a great price for your new car.

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