Buying a car without getting taken for a ride

by ECCU

June 7, 2017

The process of buying a car doesn’t have to be a losing proposition. With a little help and a lot of preparation, you can slide into the car you want at a price you can afford. We’ve put together some ideas to help make your dream machine a reality.

Be a Know It All
Some people careen into a dealership armed only with their need for a new set of wheels. Information is one of the most valuable tools you have when buying a car. Some online sleuthing can uncover anything you’d ever want to know about any car on the market before stepping foot into a dealership—the features you want, whether you want new or used, and the hidden costs associated with each.

Get started! Here’s one place to search, shop and finance.

Are You Getting Used?
There’s nothing quite like the feeling of owning a new car, but it comes at a price. Cars depreciate as much as 20-25% within the first two years. You may want to find one of last year’s models with low miles. This way the original owner absorbs most of the depreciation while you drive away in a near-new car that’s still covered under a partial warranty.

Want to know more:  Is that new car smell worth the cost?

Run the Numbers
Determine how much you can honestly afford to spend—and stick to it. Browse some car dealer sites and see which models and options are available that would meet your need. This will at least give you a ball park estimate of what kind of cash you’re looking at.  Also, ask your insurance agent about premiums for this new ride so you can factor payments into your purchase decision. Sometimes they’re so steep you’ll want to find an alternative model.

Check out our What Can I Afford? auto loan calculator to help you do the math.

Here’s a step most people skip: To know what kind of deal you’re looking for, head to Edmunds.com (not yet, but after you’ve read this whole post) to find a vehicle’s True Market Value. TMV uses actual sales figures to determine the average price buyers are paying in your area.

Find Funds First
Bonus TipAlong with scouring the net for rebates and cash-back programs, don’t let the dealer dictate the financing. Secure your financing before you shop. Check with your credit union and see what type of rates are available, whether or not you would be approved for a loan, and what kind of cash you will need to put down.

Remember, most dealer commissions come from the in-house financing and extras sold with the vehicle. Dealers don’t just hand out low financing to anyone. Read the fine print and you’ll notice these deals are reserved for those who have excellent credit.

ECCU members can get pre-approval on low auto loan rates. Check out the details here.

Bring a Buddy
Vehicle shopping can be a high-pressure process, especially if you are alone. Having a friend with you can reduce the chances of your rushing into a decision, and it helps keep the salesperson accountable.

If you just don’t have it in you to hold a steely-eyed stare down with a salesperson, ask someone to go with you who does. Some people LOVE negotiating. I know a couple that works great as a team in these situations—she is a world-class researcher, and he is a negotiating ninja. When it comes time to bottom line the deal, she wants to crawl into a corner, and he’ll lay out a final offer…and wait quietly for what seems like hours. 30 seconds later, they just saved a few hundred dollars more.

Be Kind.
Let’s face it, grandma was right. People enjoy dealing with others who are polite and respectful. If you come crashing into the dealership with an abrasive attitude, you’re not likely to get what you want from a salesperson. With a little courtesy and respect on your way to the negotiating table, you’ll be in the driver’s seat.

Category: Common Cents