For many people, a vehicle is the ticket to freedom and mobility. It gives you the literal power you need to get to work, to play, to family and to all the places you need to be to keep life moving. Because a vehicle is also a major purchase, it is important to be prepared and know how to make your buy a smart one. It all comes down to eight basic steps.
1. Prepare your finances.
When getting your finances ready for the purchase of a new car, it is important to review your credit report and look into your credit score if you can. If you find errors in your credit report, take steps to resolve them now by contacting the credit bureau and the lenders associated with the error. You can also decide at this stage whether you need to take additional action to improve your credit – such as getting current on monthly payments or paying down high-interest debt.
Another consideration is budgeting. If you already make a car payment and are trading in your old vehicle, or if your vehicle purchase will create an all-new expense, your monthly budget can be greatly affected. Inspect your income and overall household expenses to ensure you have room in your budget to purchase your car and take on the additional expenses, like insurance.
2. Get pre-approved.
One of the best steps you can take to be truly ready for a vehicle purchase is getting pre-approved for an auto loan. With a pre-approval, you know what financing you qualify for before you even begin shopping. For this reason, pre-approval helps you save time during the shopping process. Be sure to work with a local credit union lender for the best value and service.
3. Do your homework.
You may already have a dream car in mind, but it is critical to make sure you shop for a vehicle that will work for you and your everyday needs. If you are someone with a long commute, a huge, gas-guzzling truck might not be a smart fit, for example. On the other hand, if you have a large family, that tiny electric vehicle might not be practical. Reliability ratings are also critical to research.
4. Narrow your focus.
With your auto loan pre-approval in hand and your research complete, you will now be able to create a short list of your favorite vehicles. You will also need to decide where to purchase. There are many pros and cons to buying from a dealer versus buying from a private seller. Investigate local reviews to help you decide which dealerships have the best reputation for value and service. If you consider buying from a private seller, insist on having the vehicle inspected by a quality mechanic. Lastly, decide whether to buy new or used and whether to purchase or lease.
5. Start shopping.
A great place to begin is online. Center Parc members can take advantage of CU Carfinders, which can locate the vehicle of your choice, negotiate the best price, and deliver the vehicle to you. Other popular car shopping sites include AutoTrader, CarsDirect and CarGurus. Your preferred local dealers will also offer their inventory online to help you determine your available options.
6. Negotiate.
Once you find “the one,” it is time to negotiate a price. Many dealerships will not negotiate on price – but some will, so it is in your best interest to try, even if it means having the dealership remove added-on services you simply won’t use. Private sellers are more likely to negotiate. During the negotiation process, focus solely on the price of the car without revealing you already have financing. This strategy has the potential to get you your best overall price and most affordable financing, all at the same time.
7. Make your purchase.
With your financing in hand, the actual purchase should be quick and easy with no waiting for hours-long back-office processes. At a dealership, you will sign purchase agreements and likely be offered extra services. A private seller may also have a contract to sign as well as the vehicle’s title.
8. Drive with peace of mind.
If possible, coordinate with your insurance agent for coverage on the vehicle before the purchase. Not only can this shed light on how much insurance coverage will be, but it will also ensure your vehicle is covered from the moment you take possession of it. At APCU/Center Parc, we can also discuss with you additional coverage options such as extended warranties, Guaranteed Auto Protection, debt protection coverage and more. Another way to drive with confidence is to start setting aside some savings for automotive emergencies, such as repairs.
For assistance with your vehicle purchase, your friendly lenders at APCU/Center Parc are here to guide you through the entire process. Start your auto loan pre-approval online, stop by any branch or call us at 800.849.8431.
