Making Cents Blog

5 Steps to Help You Enjoy Buying a New Car

A new car is a milestone in everyone’s life. Whether it’s the first car or the last car you owned, it’s a memorable experience. People remember where they lived, who they knew, and what they were doing when they got the new car. And, of course, they always remember the make and model of the car.

“Oh, that’s when I had the Alfa . . . ” or “That’s when we got the van and went to Tahoe with the kids the first time . . . ” These are lines that can be personalized for everyone since the car culture actually began in the U.S. of A. and has been a main focus for fun, style, and status for decades.

Whether it’s cars, tires, or clothes, there are good, better, and absolutely great places to shop. And whatever the product, there are dozens of places where you can go—usually online—to find out where to get the best deal with the best service. When buying a new car, there are 5 main things you should be aware of to make your purchase an enjoyable one worth remembering.

1) Do Your Homework before Going to the Dealership

Do some research online and find out what the sticker prices (MSRP) and invoice prices are for the car of your choice. If you’re not absolutely set on a specific automobile, Google sites like Consumer Reports for cars or (there are many more) can help you decide. When you get close to what you want, find out if there are dealer incentives (which do not affect the price the dealer will try to negotiate).

It sometimes seems like there’s a dealership on every corner and on some streets known as dealer row that’s no exaggeration. However, if you don’t like doing business in dealerships, you have an alternative—you can go online or use a car service such as the ACU Complete Auto Network (CAN).

2) Find out the Trade-In Value of Your Car

Find out the trade-in value of your car—and where else to do that? The official Kelly Blue Book online. Print it out and bring it to the dealership. Neatly arrange all your research materials in a folder and take it into the dealership with you. It’s a good way to give your salesperson a heads-up that you’ve done your homework and that they’re dealing with an educated buyer. Everybody will get a little more respect that can be measured in dollars and cents at the end of the day.

3) Alternatives to the Usual Negotiations

The #1 Rule—Eliminate variables and only negotiate the sticker price. Dealers count on multiple variables that figure into a strategy using the 4-square worksheet (1—trade value, 2—purchase price, 3—down payment, 4—monthly payment) that is sometimes used to manipulate customers and increase dealer profits.

If you use the ACU Complete Auto Network, you don’t have to worry about negotiations and can enjoy peace of mind with automatic 1% off invoice pricing for new cars and similar discounted pricing for most used cars.

There are also many optional add-ons that your typical salesperson or finance manager will offer you. These include undercoating, window tinting, wheel warranties, and extended warranties. Most add-ons are expensive and rarely add long-term value to the car. If you need certain add-on features, you may want to check first with outside companies that often offer the same service or products for less.

You should also be aware that your credit union offers additional auto protection options such as GAP which is a low-cost coverage that pays the potentially high-cost difference between an insurance settlement and your vehicle loan balance. There is also Mechanical Repair Coverage that can cover costly repairs after your warranty expires.  

4) Pre-arrange Financing through the Credit Union before Going to the dealership

Once a car salesperson knows you don’t need financing, they may still try to beat the APR you’re getting from a credit union or online auto lender, but they’ll be more likely to keep moving forward with you knowing they don’t have to work on the payments. This also allows you to sidestep the 4-square exercise which will save you time and make for a better buying experience.

Before entering the showroom, your best option is to be preapproved by an outside financial institution. And you can also use the Alliance Credit Union’s loan calculator to experiment with different rates, terms, and payments. Then if the dealer can beat the APR rate—great. Just be sure all parties concerned are on the same page and are comparing apples to apples—pre-payment penalty, gap insurance, rate, term, and the things you know something about now that you’ve started doing just a little research.

5) Take the Time to Do It Right

In short, how well you fare at buying anything and how satisfactory the buying experience is depends upon you taking the time to find out where you’re going and what you’re doing before you go and do it. And when you’re talking about one of the two most expensive and memorable purchases you’ll make—next to a home—it’s worth taking the time to do it right.

If we can be of any help with your next auto purchase, please call or drop by an Alliance financial center anytime. You can also visit us online at our Auto Buying Center to check rates and get pre-approved, get insurance, and even buy a car.

Good luck and safe driving!

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