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Financial Advice

Buy & Own a Car


Car Buying Tips

Jim Brown, UFCU Senior Manager of Consumer Lending, visits KXAN's Studio 512 to offer tips on how to negotiate wisely when buying a car.

From setting a budget, pre-approving you for a loan, choosing the right vehicle, to negotiate with the dealers, there are many things to consider when buying a car. Our goal is to help you buy wisely and save money, not simply to sell you a loan. Here are some steps to consider.

Step 1: Get pre-approved with your financial institution before even thinking of shopping

  • You need to be comfortable with the monthly payment. We recommend the payment be no more than 15% of your gross monthly pay. For example, if your gross monthly pay is $2,000 a month, the maximum recommended payment would be $300.
  • Let your budget, not your emotions, drive the process

Step 2: Do your homework

  • If shopping for a new vehicle, find out the invoice price. If shopping for a used vehicle find out the Kelly Blue Book or NADA value.
  • Check to see if there any rebates available.
  • Is the car safe?
  • Is it reliable?
  • Does it have good resale?
  • Does it have damage?
  • Has been the subject of a recall?

Step 3: Keep the transactions separate

  • If you have a trade, keep that transaction separate. Why should the purchase price of the car your buying have any effect on what they will give you for your trade?
  • Negotiate the selling price: out of the door cash price excluding rebates, incentives or trade-ins. This price should include all dealer fees. Never negotiate the price of the vehicle based on the monthly payment.
  • If you are buying any additional products (such as Vehicle Service Contracts, Debt Protection, Guaranteed Auto Protection), compare coverage and pricing.

Step 4: Slow Down and be prepared to walk away

  • Compare offers
  • Don’t be rushed

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