So you’ve been driving the same car since your junior year in high school, and now that you have a college degree and stable employment, it’s time to purchase a new car. The thought of going to a dealership and spending all day trying to find the right car and then finding out how to finance said car are enough to make you second guess this decision. But here’s a nice little To-Do list before you make that trip to the car lot.
- First things first. Talk to your local Fort Worth Community Credit Union loan officer and get pre-approved. You will be armed with knowing your interest rate before you step foot into a dealership and this will help ensure you pay the lowest possible interest rate. Understand that you might need a cosigner, don’t take this as a personal insult. If you don’t have established credit, you can’t expect a lender to give you $20,000 on just your word that you’ll pay the loan back. (You wouldn’t even lend your brother the $60 he needed to buy the newest Madden for his PS4, and you’re related to that guy!)
- Do your homework. Don’t trust a salesperson to inform you on what car best fits your needs. They have their own interests (and paycheck) at heart, not yours. Research vehicles on Edmunds, Motor Trend, and other automobile information sites. There is a plethora of knowledge at your fingertips – you just have to take the time to do the research. You’ll see the average price people are paying for a particular vehicle, be able to read unbiased reviews. You can also find out if there are any rebates or special financing options available. Know before you go!
- Exercise your right to walk away. If you’re uncomfortable with the experience or if you’re feeling pressured into buying a car you really don’t think you’ll want to drive for the next five years, do not sign anything. Walk away. You do not have to buy a car at the first dealership you visit, or for that matter, any dealership you visit. If a dealership tells you that “the bank” is requiring you to purchase a warranty or they will not finance the loan, walk away. No one can require you purchase any additional products in order to obtain financing.
- Test drive a few cars on your first visit. Let the dealership know you are not here to buy today, but to merely test drive a few cars. Do not tell them what you can afford or what you want to spend on a monthly payment. This knowledge will be used against you in the negotiating of the sales price. If you tell them that you can only afford a $400 monthly payment, then you are going to wind up with a $400 monthly payment.
- The document you are about to sign is a legal binding contract. You do not have to ability to take the car back and return it like you can a pair of shoes that just don’t fit right. Once you sign the contract, you are now the proud owner of a new ride so make sure it’s the right one!
You should never buy a car on impulse or emotion. Do your homework and know the vehicle you want to buy and what you can afford before going to the dealership. This will not only save you a lot of time but also a lot of frustration and hopefully a lot of money.
This blog was written by FTWCCU Indirect Loan Officer, Matt Johnston.