Money Matters

Your Credit Union Newsletter

Car Buying Tips!


Everyone loves buying a car – but not so much the process of actually purchasing one.

The best thing to do before you walk into a dealership is to ask yourself some questions….

What Can I Afford?

A better question to ask yourself is, “what can I comfortably afford?” Try following the “20/4/10” rule to make sure your pocketbook isn’t hurting at the end of your purchase.

  • Make a down payment of at least 20%.
  • Finance a car for no more than 4 years.
  • And don’t let your total monthly expense — car payment, gas, car insurance, and maintenance — exceed 10% of your gross income.

Take a good hard look at your finances and get pre-approved. A pre-approval puts you in a much stronger negotiating position for both price and interest rates. Be sure to factor all of these costs into your budget.

New Or Used?

The reasons to buy new or used differ for everyone. But everyone should start his or her search online. Save time and money with helpful tools like Your Credit Union’s Auto Buying Service powered by TRUECar®. Starting online allows you to compare prices from multiple dealers without leaving the house until you’re ready to negotiate.

Buying new means you’ll enjoy the latest features, full warranty, and custom options. However, the latest and greatest usually comes with higher price tags.

Buying used means you’ll save with huge selection, low cost, and less depreciation—a new car loses up to 20 percent of its value the moment it leaves the lot. However, maintaining a used car usually requires more time and money.

In the end, whether to go new or used is up to you as long as you know what works for your budget and long term needs.

When Should I Buy?

If you’re able to choose when to buy, there are several times when car dealers are eager to make a deal.

At the end of the day, everyone wants to go home. Go to the dealership an hour before it closes, and you won’t find much of a struggle in getting a good deal.

At the end of the month, dealers qualify for bonuses as they reach their sales goals. Visit as the month is coming to a close and dealers will be motivated to maximize bonuses by handing out great deals.

At the end of Summer, car manufacturers are gearing up to release next year’s models. Dealers want to have room for these new cars, so take advantage of rebates and incentives designed to move out the old inventory.

When buying a car there is no one-size-fits-all piece of advice, but your Credit Union is here to help. And with low Auto Loan rates, start rolling and get pre-qualified now. Apply now!

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