Auto Buying
Tips for you to get the most out of your auto dollars
Table of
Contents
3……… Factors to Consider When Buying a Vehicle
3……… Car Buying Tips
4……… Car Buyers’ Worst Mistakes
5……… Buy the Safest Car You Can
6……… Shopping for Cars on the Web
7……… Shop for the Right Auto Dealer
8……… Avoiding the Rush to Sign
9……… Auto Rebates: Who Gets the Money?
9……… Finding Out About Vehicle Incentives
10…… Five Steps for Buying a Used Car the Right Way
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Factors to Consider When
Buying a Vehicle
Car Buying Tips
• Quality, reliability
Check Consumer Reports
• Get pre-approved for a loan and avoid dealer
markups by financing with HACU
• New, used, or certified “pre-owned”
Affordability, depreciation
• Visit at least three dealerships or car lots
• Highway vs. city driving
Fuel economy, hybrid
• Size and safety requirements
Haul kids
• How long you plan to keep it
Lease or buy
• Your budget
Operating, maintaining, repairing
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• Decide make, model, options, and color
• Take someone with you
• Look for the car you want, with the most features,
at an affordable price
• Consider gas mileage
• Keep good records as you shop
• Negotiate up from the dealer’s true cost, rather
than down from the sticker price
• Avoid dealer markups by financing at the credit
union
Car Buyers’ Worst Mistakes
best dealership may try to “switch” you. They’ll try
How much money do you think educated car buyers
most instances, it isn’t. If you want to lease, fine. Just
can save over uneducated buyers when buying the
same car? Would $5,000 get your attention?
While you may not save as much as $5,000, you’ll
save a bunch if you avoid these classic car-buying
to convince you leasing is cheaper than buying. In
don’t do it on the spur of the moment.
• Trading in your old car without knowing its value
in advance. A dealership has the right to give you
the least you will take for your old car. But you have
errors.
a right to get the most your car is worth. To know
• Showing enthusiasm. If you act excited, the sellers
several used car departments. The highest amount
know they have a unique product you want. The
you’re offered for it is your car’s real value right
price goes up instantly. Keep that enthusiasm in
now. Don’t accept less than that in trade.
check until you’ve driven home. Sneer a little if you
that value, simply clean it up, and try to sell it to
like the car.
• Financing automatically at the dealership. The
• Buying in a hurry. If you buy on your first visit to
but not always. To find out, simply bring a copy of
a dealership, you don’t have time to compare. Take
the filled-out dealer contract to HACU and compare
your time. Be willing to walk away. The price at
contracts. If the dealership won’t give you a copy,
most dealerships falls quickly if you move slowly.
they’re probably telling you they’re not really the
• Giving deposits before the dealer approves your
dealership may be the cheapest place to finance,
cheapest.
offer on a vehicle. Feel free to give a deposit, if
Big mistakes, big bucks out the window. We like to
you really want a vehicle. But don’t give it until the
help you preserve your money—that’s what credit
boss has said “yes.” Some dealerships use deposits
unions are all about. Avoid these mistakes, and put
to keep you there while they try to convince you to
that money to work rather than throwing it away.
pay more. And you can’t leave if they have your
deposit—money, a credit card, a driver’s license, or
your kids.
• Being switched to leasing without doing your
homework. Because dealerships make a much
larger profit if they lease rather than sell, even the
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Buy the
Safest Car
You Can
If you’re buying a new car, you want something that
looks good, something you can fit everything and
everybody into, and now, more than ever, gets good
SUVs or trucks. Such traction control might, for
instance, stop a slide on a wet road before tires
on one side hit a curb and the vehicle tips over.
Federal officials are proposing making this feature
mandatory within a few years.
• Side air bags. Front air bags, which come
required with all vehicles, do little to protect you if
gas mileage. But don’t forget a crucial factor:
your vehicle is hit from the side. But in recent years,
Finding a vehicle that can keep you and your family
side air bags that protect both the head and chest
safe.
have been added as standard equipment or options
Here’s how to make sure you buy the safest car that
fits your needs:
Read the ratings
Both the Insurance Institute for Highway Safety and
the National Highway Traffic Safety Administration
test vehicles for their crashworthiness. You’ll want to
look at both sets of ratings at
www.iihs.org and www.safercar.gov.
Pick your equipment
Among car makers trying to keep costs down for
price-conscious consumers, even some crucial safety
equipment is optional. Here’s a rundown of what is
essential and well worth the cost and what may be
truly optional if you’re watching your budget.
• Electronic stability control. This feature can reduce
the chance of a rollover, so it’s especially important
for larger vehicles like
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side crash test performance has improved greatly as
to many vehicles. The IIHS estimates that such head
and chest air bags can reduce the chance of fatality
by up to 37% for car drivers and 52% for SUV
drivers.
• Rear vision cameras. When you’re backing up,
this camera shows on your dash a picture of what is
immediately behind you. At a cost of about $450,
this is an expensive option that you may not need if
this isn’t an everyday problem for you. On the other
hand, if you live in a neighborhood where small
children often are running around, this camera may
seem well worth it.
Just remember that your ideal vehicle is one that
helps you avoid an accident and protects you well
if there is a crash. And talk to us at HACU if you’re
looking for help financing your new car.
Shopping for Cars on the
Web
Almost two-thirds of new car buyers do homework
• Locate that vehicle near you. Find a local dealer’s
website by putting the name into a search engine
such as Google.com or Yahoo.com. About 70% of
dealers post their inventories on the websites.
first on the Internet, and it is predicted that Web
Check out HACU’s online buying tools and use
research by car buyers will continue to grow
CarQuotes.com to offer its members CarQuotes’
as high-speed Internet access spreads to more
exclusive Know Before You Go pricing on new
households. Here are some tips:
and used vehicles. Get a low, upfront price before
• Explore your choices. If you have an idea of what
heading to the dealer!
you want--a small SUV or a mid-size sedan, for
example--start by clicking on a category.
Car Quotes lets you find the car you want with the
• Check safety records. The National Highway
least searching. You
Traffic Safety Administration gives crash test results
can search for new
on its website at nhtsa.gov. See how vehicles fared
or used vehicles, get
in 40-mile-per-hour crashes at iihs.org.
• Find out the real price. Automotive manufacturer
and dealer sites give the list price or manufacturer’s
suggested retail price, which they may work down
from in your dealings. Instead, you want to know the
dealer’s invoice price and negotiate up from there.
Any manufacturer’s rebate comes off your agreed
price. For invoice pricing and current rebates, go to
hacu.org Resources and use the CarQuotes research
tools that will help you combine a rebate with low
HACU rates and you have the best of both worlds.
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a quote, check out new car rebates and check your
trade-in’s value all in one spot!
Shop for the Right Auto
Dealer
When shopping for a new or used car, consumers
know they should do their homework first before
visiting a dealership. However, not too many
people do homework on the dealer.
To get a good price on your vehicle, create your
own competition and work with a dealer you feel
comfortable with.
Here are some tips for shopping for the right auto
dealer: First, call HealthCare Associates Credit
Union and get your auto financing in place so
you can negotiate with the dealer about the price
of the car, not the financing
• E-mail, fax, or phone several auto dealers in
the area. Tell them what you’re looking for,
what you know, and that you’re comparing
other dealerships and what price they’ll give
you. Tell the dealer you’re not going to buy
right away. Set-up a test-drive for the make
and model you’re interested in, and leave
your name and phone number for the dealer
to get back to you (a cell phone number if
you’re worried about being bombarded by
sales calls).
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• Evaluate the dealers that return your call.
Are they impatient and pushy or relaxed
and open? Did the dealer respond within
a reasonable amount of time? If the car is
not available, has the dealer suggested
alternatives?
• Take the car (and the dealer) for a test-drive.
Again, ask yourself if the dealer is pushy or
relaxed.
The dealer already knows that you still are
shopping and should respect this. Other thoughts:
Do you trust the dealer to be open and honest
when negotiating? If you disagree, are you
comfortable voicing your concern? Is the dealer
listening to your needs/wants? If you feel
comfortable with the dealer, call back after your
test-drive.
Avoiding the Rush to Sign.
Take Your Time at the Dealership. If you’re in the
market for a car, make HACU your first stop for an
auto loan. Heading to the credit union before a
2. Does the dealer require an arbitration
agreement in order to buy a car from that
dealership? Arbitration agreements are usually
bad for the consumer because they take away
the consumer’s rights for any legal redress if
dealership can help you get the best deal.
they have any problems with the dealership.
And remember: Buying a new car requires you
contracts, and don’t buy from a dealership that
to take your time and do your homework before
requires them.
visiting a dealership. Rushing through a car deal
invites a dealer to potentially take advantage of you.
Watch out for arbitration agreements hidden in
3. What will the dealership do with your personal
information? Many dealerships ask consumers
to sign an acknowledgement that the dealership
has a right to sell personal information about
that consumer. If a dealership asks you to sign
a statement acknowledging they can sell your
private information, don’t sign it.
4. What’s your down payment or how much will
you have to pay immediately out of pocket,
either in cash or combined with a trade-in or
rebate?
5. What’s your trade-in value? Make sure you’ve
done your research so that you know what its
value is. Don’t just take the dealer’s opinion. Use
Before you sign or agree to anything, ask the
following questions:
1. What is the total price of the vehicle? There’s
a lot of information on a purchase order, but
the most important thing is the end price of a
vehicle. Be sure to validate all the charges that
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are on a purchase order.
your free CarQuotes Resource buying tools at
hacu.org.
6. Are all fees spelled out in the contract and
how much are those fees? Look for destination
charges, sales tax, and title fees.
Auto Rebates: Who Gets
the Money?
Rebates
Rebates sound so
straightforward: Buy
this car, for instance,
and get $2,000 back. In virtually all cases, the
advertisements you see for rebates are real: The
manufacturer, not the dealer, promises to send you
a check after you’ve bought or leased a particular
vehicle. The money, in theory, has nothing to do with
negotiations with the dealership. Negotiate your
the price you may have negotiated on a vehicle.
price on the new vehicle as if there is no rebate.
What should happen: The rebate money reduces
what you’re actually paying for the vehicle. Let’s
And then have the rebate check sent directly to you
at home. Never allow the dealership to “apply” it to
the amount you owe them.
say you’ve agreed to pay $20,000 for a car. The
manufacturer agrees to send a check directly to
your home for $2,000 as a thank you. When the
check comes, your total cost for your new wheels is
$18,000.
What does happen many times: The rebate money
becomes extra profit for the dealer. For instance,
Where Can You Find Out
About Vehicle Incentives?
CarQuotes Resource buying tools at hacu.org
you agree to pay $20,000; they agree to give
you “credit” for the $2,000 rebate. You should
owe them $18,000, but they draw up paperwork
showing you still owe them $20,000. You just lost
$2,000. And you generally won’t see this trick occur
because the sleight-of-hand is hidden in paperwork.
How to prevent theft of your rebate money: Don’t
make that gift from the manufacturer a part of your
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Once you find what’s out there,
consider your options. Taking the
rebate and getting a conventional loan
from your credit union still could be
the best deal. Low-rate financing offers
generally are limited to shorter lengths
of time and use a sliding scale where
the best rates are for the shortest terms-often so short that most people can’t
afford the monthly payments.
Five Steps for Buying a
Used Car the Right Way
Buying used can make smart money sense…if you
follow these five easy steps:
1
Always have a mechanic check out
a used car before you buy it. Even if
you’re buying from your mother. Use an
independent service shop or diagnostic center. Most
charge about $125 for a complete check.
2
Budget any needed repairs as part of
your purchase price. So, if a seller wants
$7,000 but the vehicle needs $1,000 in
repairs, budget $8,000 for your vehicle. Or, better
yet, negotiate the selling price down to include the
cost of repairs.
3
Forget about a used vehicle’s “asking
price.” Smart used-vehicle buyers never
negotiate down from asking price, they
negotiate up from “loan value.” Loan value is what
most lending institutions will actually lend on a
particular vehicle. Your credit union loan officer can
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Talk warranty after you’ve settled on
the price. And never accept a 50/50
warranty--the dealer pays half of warranty-
covered expenses. On any vehicle, fight for at
least a 30-day, 100% drivetrain warranty. If you’re
also thinking about buying an extended service
agreement, remember that the price of a service
agreement usually is negotiable, too.
5
Always shop used-car financing rates.
Most states allow dealers to charge much
higher rates for financing used cars than for
financing new cars. For instance, a new car might
be financed at 8% while a two-year-old used car
might be financed for 15% or higher. How do you
find the cheapest rate? Ask the seller to give you a
completely filled out copy of the finance contract,
and compare it with your credit union’s rate.
A tip:
HACU finances
used cars at or near new-car finance rates.
tell you this figure. For instance, if the seller is asking
$7,000, but the loan value is $6,000, you want to
negotiate up slowly from $6,000.
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source: express.cuna.org
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