What to Know Before Buying a Vehicle

Negotiating the best deal in today’s market.

By Damon Vaughn, Lender

Buying a vehicle in today’s market can be more challenging than ever before. Even the most seasoned negotiator may have to change some of their tactics or be willing to “give” a bit more than they would have in the past. The bottom line is, vehicles are in short supply, prices are up, and dealers aren’t as willing to negotiate.

Here are four tips to help you get the best deal when buying a vehicle:

1. Know what your trade is worth. If you’re trading a vehicle toward the purchase of a new vehicle, it’s important to have an idea of what your trade is worth. You can search your vehicle’s trade in value at J.D. Power (www.jdpower.com – formerly NADA Book Values) or Kelley Blue Book (www.kbb.com). In addition to knowing your vehicle’s make and model, you’ll also want your Vehicle Identification Number (VIN) and mileage to get an accurate value.
2. Know the fair value of the vehicle you want to purchase. Once you’ve found the perfect vehicle to purchase, don’t negotiate with the dealer until you’ve had an opportunity to research the value of that specific vehicle. Again, visit www.jdpower.com or www.kbb.com to do your research. If the vehicle is used, record the VIN and mileage before you leave the dealer’s lot. Once you know how much you’re willing to pay, you can negotiate with confidence.
3. Know the fair price for extras. Buying a vehicle can be a very emotionally driven event. You’re excited about the vehicle and just want to get it out on the road. However, when sitting with the finance department, don’t gloss over the cost of extras, such as Guaranteed Asset Protection (GAP), Extended Warranty, lifetime oil changes, etc. The cost and terms of these services can vary widely, so do your homework in advance and make sure you’re getting a good deal.
4. Ask for a breakdown of all your costs. Even if you’ve covered tips 1-3 above, it’s important to request a “preliminary purchase agreement” prior to signing on the dotted line. This document will break down all the costs associated with your purchase. Review it carefully and ask about any line items that are unclear or unexpected.

Finally, no matter how much time you’ve spent researching your vehicle purchase and talking with the dealership, if you’re not comfortable with any aspect of the purchase, walk away. Give yourself 24 hours to review the information and write down your specific concerns. If those concerns can be resolved with the dealership, great! If not, this may not be the vehicle for you.

As your member-owned credit union, we are always here to help! If all this information seems too overwhelming or time consuming, let us do the work for you. We can assist with the research, review the purchase details with you to make sure you’re getting a fair deal, and even prequalify you for a loan with extra services that are guaranteed to be a good value.