auto loan Archives - Common Trust FCU

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!

5 Auto Loan Tips for First Time Buyers

From car financing, shopping and negotiating, being a first time car buyer is an overwhelming task. Receiving an auto loan from a trustworthy lender is a great option to make the financing process much easier. Consider these five tips to guarantee a successful experience while getting your first auto loan.

Check your credit

Checking your credit reports is one of the first necessary steps towards financing your new car. Your credit rating determines the interest rate of your auto loan and if any errors are present, it will leave you paying more than you should have to. Check your credit score before applying for a loan and address any mistakes. If you have no credit, consider building good credit by taking out a secured or store credit card.

Determine your budget

When planning for your first car, determining a budget and figuring out how much you are willing to spend per month is one important step you do not want to skip. Use an auto finance calculator to figure out a monthly payment that you can reasonably afford. Make sure to factor in other expenses that come with owning a car including insurance, repairs, and maintenance. While planning your budget, don’t forget that although low monthly payments might be appealing, the lower they are, the longer your term will be and the more you’ll end up paying in interest.  

Save for a downpayment

First time buyers should consider putting at least 20% of the car price down. A no-money down deal sounds great, but it has the potential to leave you in a risky situation. You can avoid getting into a situation where the car is worth less than what you owe by putting down a larger down payment. It saves you money on interest over time and shows the lender that you are committed to your investment.

Get a pre-approved loan

Getting a pre-approved loan before making a large financial decision is always a good idea. Pre-approval means you are approved to borrow a certain amount of money before you even enter the car lot. It’s a great way to know how much you can afford before you start shopping, and it offers more credibility to car salesmen that you are firm on your budget and serious about your offer.

Find a cosigner

If you are unable to qualify for an auto loan on your own, using a co-signer is a great way to finance your first car. A co-signer is a trusted individual who signs off on helping you with any missed payments but you’ll maintain all rights to the car. Using a co-signer often improves the chances of your approval and helps to improve the terms once approved.

Are you looking to buy a car for the first time? This fall we are offering auto loan rates as low as 2.5%, making first time financing easy. Visit our auto loan promotion page or contact us to learn more.

Did you know that CTFCU now has an online Education Financial Center for members? Learn more about buying a car through this 3 minute course!

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