You’ve decided that you can afford a new car. Now what? Follow these tips for smart auto buying and financing:
Do your homework. Decide which makes and models fit your needs, including size, fuel economy, etc. Once you narrow your options, learn which models are the most reliable (Consumer Reports) and the safest (IIHS). While your at it, find out what your trade-in is worth, and what the invoice (dealer cost) is for the new car. If you prefer to buy used, know the NADA values before you shop. The credit union can help with values. Then drive the finalists. Drive them a lot, not just a test drive around the block.
Explore your financing options—especially your credit union. The credit union tends to lend more money than a bank and generally offers more favorable rates. Credit unions also have arrangements with local dealerships, offering at-the-dealer BCSCU financing and member-only sales.
Negotiate. Some dealers have a set price for their cars, but most dealers try to get as much as they can on each sale. This is your opportunity to negotiate, buy low, sell high.
Do not give the dealership a credit application until you know for sure that you are going to finance through them. Make sure that you have exhausted all other sources including your local credit union. A little extra time shopping at your local credit union may save you a lot of money. If you do apply through the dealership, and then try to go somewhere else for your loan, you may find that you have a number of inquiries on your credit report. This makes it look like you weren’t approved for other loans and each lender thinks the others know something bad about you.
If you finance at the dealership, never take delivery the same day. Pick up the car only once you know that the financing is absolutely final.
Always check the dealer’s numbers carefully, and don’t sign the paperwork until you are positive that the numbers are correct. Remember, once you’ve signed, you rarely can get out of the deal.