Low Interest Rates On New & Used Car Loans, Auto Financing

Used Car Buying Tips

You know that those car air freshener’s come in a “new car scent,” right? If you’re a huge fan of that brand spanking new scent but you aren’t ready to shell out major money for your vehicle, it pays to know your options. Although most dealerships offer a selection of used cars, you may find the best deal through a private seller.

You don’t have to have the cash on hand in order to purchase from an individual. If you’re working with a credit union you can still purchase from wherever you find the best deal. Just as when you’re shopping for cars at the dealership, it’s important to be educated about both the process and the vehicles themselves.

The Kelley Blue Book is always a great place to start if you’re looking for an accurate idea of a car’s value. In doing your research, be sure to read reviews, consumer reports, and safety ratings. If you notice there seem to be a large inventory of the same make and model on the market, investigate the reason. It’s easier than ever to find out the history of a car with the VIN (Vehicle Identification Number), and if you’re buying from an individual with no warranty it’s worth running the search. Further, if you aren’t particularly knowledgeable about cars it would behoove you to have a trusted mechanic look the car over.

Regarding the actual purchase, talk with your credit union and establish your budget before you start looking at options. If you go into the search process with a set number you are less likely to overspend. Just make sure you budget in the sales tax and title registration fee’s as they can add significantly to cost of the car. If you go through a credit union (as opposed to a dealer) for the financing the credit union will issue a blank cashier’s check up to the amount of the loan you qualify for. When you make the purchase you’ll simply fill in the amount onto the credit union check (and be sure to keep a copy!).

-L. Steele  (ExperienceCreditUnions.com Staff Writer)

Car Loans & Car Prices

According to the National Automobile Dealers Association the average cost of a new car is just over $28,000.00 and is the second most expensive purchase an individual will make. Although significantly cheaper, even the cost of a used car has been on the rise, averaging today around $13, 200 but going as high as $22,000 for a used SUV.  In today’s economic climate the likelihood of someone paying cash for a vehicle used or new is dwindling, but you still have the opportunity to save yourself a significant amount of money by being educated about your options and as always, shopping around.

Although most dealerships will offer to help you finance your car, you’ll likely find the best deal by contacting the lender directly. Dealers may, on occasion, offer incredibly low financing rates on a certain type of car but often will not negotiate on the price when special financing is involved. Further, in order to qualify for these special rates they often require a large down payment. By going through the lender directly you are likely to find a better interest rate and more flexible payment options.

Regardless of where you acquire your car loan be careful to consider the ‘big picture.’ Rather than focusing on the monthly payment, consider the annual percentage rate (APR) and the length of the loan. Obviously, a shorter-term loan will provide for larger payments, but ultimately less money paid out in interest. Perhaps the most enticing benefit of the shorter-term loan, is that one step closer to the paid off car. This author would argue there are few things more satisfying than sending in that very last check. (Save perhaps hearing those three little words we all love to hear: “You were right!”)

In addition to thoroughly understanding the terms of the loan, do your homework and understand the price.  There are three main types: Base Price, Monroney Sticker Price (MSRP) and the Dealer Sticker Price. The Base Price, is just as it sounds: the cost of the car without any upgrades, although it does typically include the factory warranty. It will be printed on the Monroney sticker, which by the way, is the official name for that sticker in the window. The United States government requires that it be affixed to all new automobiles and that it be removed only by the purchasers.

The sticker is required to list a standard set of facts about the vehicle. According to the Federal Trade Commission, as of 2007 the following must be displayed on the sticker: 

MSRP (Manufacturers Suggested Retail Price)

Engine and Transmission details

Standard Equipment and Warranty Details

Optional Equipment and Pricing

Fuel Economy Ratings

Crash Test Ratings

The Dealer Sticker price is another sticker entirely, usually attached just below the Monroney Sticker and it will include the MSRP with additional dealer markup (ADM). That is to say, it’s what the dealer considers to be a fair price for the vehicle, and despite what you hear, it is always negotiable-especially when you understand the pricing and loan options!

-L. Steele (ExperienceCreditUnions.com Staff Writer)