Car Buying 101

Buying a car is a thrilling milestone, but as one of the biggest purchases you’ll make, it can also be intimidating. It’s easy to feel overwhelmed by those big price tags, especially when you’re fairly new to the car buying process. We’re here to help you through every step along the way. Use these tips to help you save time, money, and headaches when you’re buying your next car.

Finding the Right Car For You

When you know it’s time for a new vehicle, there are a few things to consider that will help ensure you find the right car for your needs. Ask yourself these questions to help you fine-tune your options:

• When do you need the vehicle? Is it an urgent need, or do you have some time to look for a while before you need to buy? If your current car is having problems, do you think it will be able to last a little while longer or is time of the essence? Is it worth it to repair your current vehicle, or will you come out better just getting a new one? Buying yourself some more time can work in your favor for many reasons. It gives you more time to find a vehicle that best matches up with your needs, and gives you more power when the time comes to negotiate price.
• Are you looking for a new vehicle or pre-owned? Thinking about how long you need the car to last you can help you find your answer if you aren’t sure.
• What is your price range? This one is crucial to determine before you get too into the weeds with your search. You don’t want to fall in love with a car that’s way out of your price range. And don’t forget to factor in if you currently have a car payment that this new vehicle’s payments would be replacing. Our Auto Loan Calculators can help you determine how much you can afford and get an idea of what your monthly auto loan payments will look like.
• What style of vehicle works best for your needs? Think about how often you’ll be driving and what you’ll be using the car for, that will help you narrow down style.
• How much space or storage do you need? Consider how many people the car will need to seat comfortably. Do you need room for car seats? Do you need extra storage space?

Once you’ve answered these questions, you can begin to narrow down your search to a few makes and models.

Do Your Research

Use online tools and resources to research and compare information for your top choice models. Look at things like gas mileage, safety features and equipment, pricing guides, and reliability ratings. It’s also a good idea to look at reviews for each of the models you’re interested in. Looking at online reviews can help you identify the pros and cons of each model. Reviews can also help you uncover problems you might not have thought about, like if the road noise levels are too high or if there’s poor visibility out of the rear windshield, so you can keep an eye out for those things when you schedule a test drive.

Different Ways to Buy

There are three different ways you may choose to purchase a car, each with their pros and cons:

• Private Sale
  • Pros: Many people say that buying from a private seller can help you save more on buying a car, especially with being able to avoid dealership fees
  • Cons: It’s important to take extra precautions if you choose to go the route of a private seller so you stay safe from untrustworthy sellers or websites. Ask to view the registration or title to confirm that the person really is the owner of the vehicle. Additionally, make sure you get the car checked out by a reputable mechanic.
• Dealership
  • Pros: Shopping at a dealership has the key benefit of convenience. You can knock out buying a car in one day.
  • Cons: Due to condensing the buying process into a single day, it can become a high pressure event. There are also additional fees when purchasing from a dealer that you will need to factor into your overall car buying budget.
• Car Buying Service
  • Pros: When using a car buying service, they do all the legwork for you. You also have an advocate throughout the buying process.
  • Cons: They take the wheel, so to speak, so you will have to relinquish some control and trust their service, which may be easier said than done for some of us.

The Test Drive

Whether you’re buying a car from a dealer, a private seller, or using a service, you still need to test drive before you buy. The test drive is your opportunity to get a feel for the vehicle’s performance and features, and see if it meets your needs and expectations. The test drive is one of the most crucial steps of the car buying process, so you don’t want to skip it! Here are some tips to help you make the most of your test drive:

• A thorough test drive should last around 30 minutes.
• Turn off the radio and listen to the car as you drive.
• Include a variety of terrains, conditions, and speeds on your test drive. Include backroads, highways, parking lots, even the interstate if you’re close enough. See how it handles with tight corners, parking, and backing out. Pay attention to how it performs when accelerating and braking.
• Take note of visibility, positioning, and seat comfort. Check how much of your seating you’re able to adjust.
• Check the space of the seats and cargo area. Will backseat passengers have enough legroom? Is the trunk big enough? Can you put seats down or remove them? Test how easy it is to make these adjustments.
• If you’re still undecided about the car, don’t be pressured into buying it.

Negotiating Price

If you decide the car is right for you, now’s the time to negotiate sales price and close the deal. Stay level and be ready to walk out if you feel pressured or aren’t able to reach an agreement on pricing. Ask the salesperson or seller to name their price, rather than responding to the typical starting point of “Make me an offer!” Compare their price to the pricing guides you checked earlier. You can start counteroffering $1,000 below the market price you found, so there’s room for some back and forth while staying within your budget. You can say “My research shows the market price is…” or, “I’ve gotten offers from other dealerships/sellers that are lower.” If necessary, increase your offer by $250 increments until you reach the true market price.

The Loan Process

Whether you start the loan application process online or in-person, there is the same basic information you will need to provide. This includes your driver’s license info, the requested loan amount, the specific vehicle along with the VIN (Vehicle Identification Number) if you have it, and the length of the loan term. The results of your loan request are influenced by several credit factors. We will review your debt-to-income ratio (this indicates your ability to repay a loan), your credit score, the current state of your credit (i.e. if your credit is in good standing; you typically will not be approved for a new loan if you are late on any existing loans), your employment history (so we know you will be able to repay the loan), and the amount of the loan compared to the car’s value. Once we gather all of the preliminary information, your loan application will be sent to a loan processor, who will then reach out to you to obtain any additional information that may be needed, as well as go over loan terms with you. Your loan processor will be with you throughout the entire loan process.

Financing Options

When you finance a vehicle, you have the option to purchase GAP, warranties, and other payment protections. Here are the key points of each:

• GAP (Guaranteed Asset Protection) – If your vehicle is totaled (deemed a “Total Loss” by your insurance company as the result of an accident) and your insurance company determines that the value of the vehicle is less than what you still owe on it, GAP insurance will “fill in the gap” and pay off the remainder of your loan.
• Warranties – Vehicle warranties are especially useful if you’re buying a used car “as is.” Depending on the age and mileage of the vehicle, there are different warranty levels you may qualify for, such as bumper to bumper, major systems, or transmission only coverage.

Buying a car is an important purchase. Let us walk you through the process and show you how you could save hundreds or even thousands of dollars on your next vehicle purchase. With great rates, no hidden fees, and convenient payment options, our Auto Loans make buying a car easy and affordable. Our Auto Loan Calculators help you determine how much you can afford. If you’re ready to start the car buying process, apply for an auto loan online, over the phone, or request an appointment at one of our branches.

At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.