1) Research car prices.

Start your search online. Doing so will help eliminate sales pressure. Once you narrow down your list of cars, search dealerships in your area to see what’s in stock and current prices. Even though you may get a lower price than what’s listed online, the point right now is to get an accurate price estimate of the car you’re interested in buying.


2) Calculate your trade-in value.

People often assume their trade-in is worth more than it actually is. That’s why it’s important to understand how much your trade is worth before stepping into the dealership. You can easily find your car’s current value by visiting Kelley Blue Book (www.kbb.com) or the National Automobile Dealers Association (www.nada.com). You can even obtain online estimates for your trade at retailers, such as CarMax or Carvana. These figures can help gauge what the dealer is likely to offer you for your trade. You can then use this information in the negotiating process and to help estimate the final cost of your new car.


3) Do the math.

With the help of free online calculators or loan calculator apps, you can easily plug in numbers to estimate what you can afford. Be realistic and make sure the numbers match your monthly budget. No matter how great of a deal you get, buying a $60,000 vehicle and expecting a $250 monthly payment just isn’t going to happen. So, having this information before you set foot in the dealership helps to ensure you don’t overspend.


4) Get pre-approved.

Stop by the credit union or apply online to obtain a pre-approval. Our team will review all your finances and approve you for a specific amount within your budget. A pre-approval is one of the best car-buying tools. It helps keep you within budget, gives you the upper hand in price negotiations, and often forces dealerships to drop their prices to meet your spending limit.

*NOTE: If you’re pre-approved for a vehicle by the credit union and a dealership tries to get you to obtain financing elsewhere, that’s usually a sign the deal is heading in the wrong direction.


5) Skip the add-ons.

Dealerships only make a portion of their money by selling vehicles. A good chunk of their income comes from the finance office. Once you sit down, dealers will try to sell you everything from leather protection to extended warranties. Be prepared to say “no.” If you are interested in GAP (Guaranteed Asset Protection) or an extended warranty, you can purchase these same protections at the credit union for much less than at the dealership.


6) Negotiate.

It’s essential to recognize that car dealers will usually try to sell you a car that makes them the most profit. Because of this, there is typically some flexibility with the price. All new vehicles come with a Manufacturer Suggested Retail Price or MSRP. The keyword to remember here is “suggested.” There is nothing that says the vehicle must sell at that price, and often you will be able to negotiate the price down. Keep in mind that most dealers would rather sell a car at a discounted price than not sell it at all. Always start with negotiating the vehicle’s actual price and leave out down payments and trade-ins from the initial discussion.


We’re Here to Help!

While buying a new car is exciting, it does come with a fair amount of stress. However, the more prepared you are before stepping into the dealership, the better deal you’ll end up getting.

If you’re in the market for a new car, our financial experts can work with you one-on-one to determine how much car you can afford. Or, if you’re looking for a savings account to help you save for a down payment, GAP insurance coverage, or extended warranties, we have you covered.

Please stop by any of our convenient branch locations or call (949) 588-9400 to learn more about how we can help you score a better deal on your next car!


Each individual’s financial situation is unique and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.