Car Buying Tips & Resources

Always get pre-approved from your lender before you go to the dealer.

Getting pre-approved before you shop puts you in control of the buying process and helps you understand how much you can comfortably spend.

Benefits of getting pre-approved:

• Allows you to take charge of the process.
• It gives you a specific amount of money to work with so you know how much you can spend.
• Helps you avoid the sales game at the dealership.
• Saves time at the dealership.

When deciding what type of vehicle you would like, consider the following:

• Your Needs – Think about how you will use the vehicle every day, including passengers, cargo, commuting, and other requirements.
• Your Wants – Consider the features you would like to have and separate your wants from your must-haves.
• Safety & Reliability – Research the vehicle's safety features, reliability and expected maintenance needs.
• Your Budget – Know what you can comfortably afford before you start shopping.

There are advantages and disadvantages to each option. Consider which one best fits your needs, driving habits and budget.

Before deciding on a vehicle, examine your budget and determine how much you have available for all of your car expenses.

Remember that the monthly loan or lease payment is only part of the cost.

Car expenses can include:

• Loan or lease payment
• Auto insurance
• Gas
• Maintenance
• Registration
• Parking & tolls

If you are planning to get a loan to pay for your car, a good credit score is important.

To get a car loan with a reasonable rate, most lenders require a credit score of at least 620.

Things you can do to improve your credit score:

• Always pay on time
• Pay down existing debt
• Avoid taking on additional debt
• Pay collection accounts

Before signing your financing documents, make sure you understand the terms of your loan.

Make sure you understand:

• Amount you are financing (borrowing)
• Annual Percentage Rate (APR)
• Finance charges
• Payment amount and number of payments
• Payment penalties

Three Main Financing Options

1. Dealership
Financing offered directly through the dealership.

2. Credit Union/Bank
Financing through a financial institution such as a credit union or bank.

3. Finance Company
Financing provided through a separate finance company.

Getting pre-approved before visiting the dealership can help you understand your financing options before you begin negotiating.

Negotiating the price of a car is a national pastime. Doing your homework ahead of time can help you stay focused on the deal.

Tips for negotiating:

• Don't reveal too much
• Avoid being overly enthusiastic
• Do your homework
• Search around
• Go at the right time
• Avoid unnecessary extras

Be sure to look beyond the advertised vehicle price and pay attention to the complete cost of the deal.

If you have a vehicle to sell or trade in, compare both options before making a decision.

Trading your old car can save sales tax, but sometimes you may get a better deal by selling your old car separately.

Always compare the numbers and choose the option that makes the most sense for you.

Be careful of additional costs a dealer may add to the vehicle. Some items may be necessary, some may be available at a better price through your credit union, and others may not be necessary at all.

When purchasing insurance products or extended warranties, make sure you are getting the best deal.

GAP Insurance can provide additional protection if you owe more on your vehicle than it is worth.

For example, a dealer may charge up to $1,500 for GAP insurance, while MEFCU charges less than $600 for the same coverage, with the added benefit of ADR.

An extended warranty may be helpful when purchasing a vehicle that is near or out of warranty.

In many cases, an extended warranty can be financed into your vehicle loan.

Before purchasing an extended warranty, make sure you understand what is covered, what is not covered and the total cost.