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Nine Steps to Getting the Car You Want

A vehicle is likely to be one of the largest purchases you will make. By taking the time to properly plan and prepare for buying a car, you can save yourself hundreds or thousands of dollars. Check out these steps to set yourself up for a more secure financial future:

Follow These Steps to Save Money on Your Next Vehicle.

#1 Figure out What You Can Afford.

Complete a spending plan. As you create your budget you can adjust the numbers to see how different transportation expenses would fit into your monthly expenses. You can then plug that monthly number into an auto payment calculator to see how much you can afford. A budgeting tool, such as PenAir’s Money Management, offers the best method for planning, viewing, and adjusting your spending.

#2 Monitor Your Credit.

Review your credit reports. To ensure the accuracy of the reports and pinpoint areas that may need work, take advantage of the requirement that the credit bureaus must provide you free copies of your credit report annually. If you would like a certified credit coach to review your reports with you, check our Balance web page, or call Balance at 888-456-2227.

#3 Find the Right Car for You.

Think about how you will use the vehicle. Will you be using it to cross snow-covered mountain passes with hairpin turns and thousand-foot drops, or will you be using your vehicle for something more challenging, like chauffeuring your children?

Pay special attention to the safety and reliability ratings. No car meets your needs when it’s up on blocks next to the garage or puts you in harm’s way.

Check with your insurance provider. That cherry-red sports car might sound like the key to your happiness, but you might not be as thrilled when you get your car insurance bill.

#4 Consider New vs. Used, Buying vs. Leasing and Down Payment Amount.

Decide whether you will buy a new or used vehicle. Do you prefer the negligible wear-and-tear and increased reliability of a new vehicle, even if it means the value may drop sharply in the first few years? Or would you rather let someone else take on that depreciation by going with a used vehicle, but take the risk of not fully knowing the condition and history of the vehicle?

You can use Auto Loan Calculators to figure out if you would rather buy or lease the vehicle. If the idea of always driving a new car matters more to you than likely saving money in the long-run, leasing might be an option to consider.

Think about how large of a down payment you can make. Making a down payment can help you get qualified for a loan, get a better interest rate, get a lower monthly payment, get a more expensive car for the same monthly payment, or build equity (owing less on the vehicle than it is worth) more quickly.

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PenAir has the tools you need right at your fingertips.

Auto Loans for New or Used Cars
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#5 Get Financing.

Arrange your vehicle loan before you go to the dealership. You will have a lot to think about when you are at the dealership looking at cars: different vehicles available, test-driving, negotiating a price, etc. Just like you shop around for a good deal on a car, shop around for the best deal on financing.

Avoid subprime lenders. If you can’t qualify for an auto loan with a credit union or bank, consider working on your credit standing first or maybe getting a co-signer and then reapplying for the loan instead of accepting the unfavorable terms provided by a subprime lender.

#6 Determine favorites, contact dealers and check quality.

Find the vehicles that best fit your needs. Websites like cars.com, Consumer Reports, Edmunds, and Kelley Blue Book regularly publish articles on the best vehicles to meet particular needs, so take advantage of these free resources. Create a comparison chart to keep track of all the attributes that matter most to you and how each vehicle stacks up.

Use the Internet or trips to dealerships to comparison shop. Once you know which vehicle will suit you best, start looking at particular models and add the prices of each to your comparison chart. Also, do test drives and check vehicle histories. During the test drive, pay special attention to the transmission, shocks, brakes and alignment. If you aren’t sure what to look or listen for, invite a more experienced driver along on the test drive. Write down the Vehicle Identification Number (VIN) and use it to get a vehicle history report from a company like AutoCheck or CARFAX if you are shopping for a used vehicle.

#7 Get the best price on the car.

Know what your preferred models are selling for. Companies like Kelley Blue Book, TrueCar and Edmunds specialize in tracking the average price of vehicles and rebates or incentives available.

Negotiate each piece of the deal separately. Beware of salespeople who roll the different components of the transaction (purchase price, financing, trade-in, extras) into one deal or who make an offer in one area of the deal that sounds too good to be true.

Walk away if you are not happy with the deal. You know what you can afford and ultimately you control this transaction, so let the salesperson know you know where the door is and that you won’t hesitate to use it if they can’t meet your number.

#8 Know your legal responsibilities.

Find out the insurance necessary for your state. The Insurance Information Institute’s website at www.iii.org has a list of the minimum insurance requirement for each state.

Learn what the DMV requirements are for your area. Contact your state’s Department of Motor Vehicles (DMV) to make sure you have the proper license plate stickers or any other items that might be necessary to register your vehicle.

Know what to do if you can’t make your car payment. If you find yourself in a situation where you are struggling to make a car payment, the worst possible thing you can do is to avoid your lender. Instead, work to avoid repossession by staying in contact and asking about hardship programs.

#9 Put yourself in position to succeed long-term.

Establish an emergency savings account. Unexpected expenses have a way of popping up in life and vehicles can be a major source of these. Tires must be replaced periodically, for instance, and you won’t want to have to pay for that directly out of pocket. An automobile “rainy day” account can make this affordable.

When you are ready to set out on the open road in your own car, it is nice to know that you have prepared to have a pleasant trip. Your credit union is here to help make that a reality. Check out our website and get in touch for the best in rates and auto loan pre-approval.

Next Steps

When you are ready to take off on a new driving adventure, check out the resources we have for you here at PenAir:

Auto Loans for New or Used Cars
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Auto Loan Calculators
What Can You Afford?
Money Management Tool
Build Your Budget
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