6 Steps to Take Before Buying a Car
1. Get Pre-approved
The very first step you should take when car shopping is getting pre-approved for an auto loan. This will provide you with guidelines so you can get the best overall deal. Get pre-approved, determine what your price range and payments will be, and then use your pre-approval as a negotiating tool.
2. Don’t Be Misled
Dealers may sometimes use misleading tactics to convince you that you have to finance with them. This isn’t true. If a dealer is telling you that you must finance with them, they may be trying to upsell you. If that is the case, you always have the option to leave.
3. Know Your Options
Don’t settle for just any auto loan. We offer an additional interest rate discount when you open a checking account with direct deposit or choose to protect your loan. You can save up to an extra 1% off your rate!
4. Use Your Resources
You can never do enough research before buying a car. Reading this article is a good place to start. We recommend figuring out what features you want from both your car and your loan. We suggest looking at Kelly Blue Book and Edmunds to research vehicle prices and options. For loans, think about things like flexible terms, interest rates, whether or not you can prepay without penalty, and how long it takes to get approved.
5. Determine the Value of Your Trade-In
Many car shoppers will trade in their previous vehicle to lower their down payment. Before doing this, you should figure out what your current vehicle is worth. Carmax, Carvana, and KBB Instant Offer are good resources because they can provide you with a written offer to show your car dealer.
6. Negotiate the Price, not the Payment
Because you have already been pre-approved for your auto loan, you do not need to negotiate payments. If you let the car dealer negotiate payments with you, you may end up paying more in interest because they may try to lower your payments by extending your term. Negotiating the total price of the vehicle will get you a better deal overall.