If you’re eying a new or new-to-you car this Christmas, experts say it’s the best time of year to buy. Dealerships are running out of time to meet their quotas — and they’re motivated to move inventory.
Jean Hopkins, director of consumer lending with WeStreet Credit Union, says there are a few small things you can do to get the best deal on your next car purchase.
First, before talking to a salesperson, look up the make and model of the car you want on automotive resource websites like J.D. Power or Kelley Blue Book. If you’re trading in your current vehicle, look up the value of your trade-in too, and use that to negotiate the sale price.
“Most dealers don’t have the room to come down on the price that much, they really don’t,” Hopkins said. “Sometimes you just have to negotiate a little bit more for your trade.”
Keeping receipts for repairs and upgrades can help with that too.
Next, start comparing loans and insurance quotes. Hopkins says people forget lenders require full coverage auto insurance, which varies from car to car but typically consists of liability, comprehensive and collision coverage.
Most banks and credit unions offer auto loans at various annual percentage rates, which Hopkins says is the “price you’re paying for your credit.”
“Think of it like they’re selling you money at a price, and this is the price that you pay each month to borrow that money,” Hopkins said.
Doing a rate comparison between credit unions and banks is a great idea to make sure you’re getting the best price. Hopkins says the impact on your credit score should be minimal if there are only a few checks over a short period of time.
Hopkins says she always advocates for pre-approved auto loans, which can help save a few dollars when negotiating your financing, but it’s not a guarantee.
“That’s not making a commitment that I’m going to borrow the money from my credit union, but it is getting a commitment from them that they find me credit worthy,” she said.
Finally, when the day comes and you’re sitting in front of a salesperson, Hopkins says to remember they are trying to sell you on a lot of things, including financing, and they can make certain things look attractive. You should know what a comfortable payment is for you before you get there.
Hopkins says even upping the length of your loan may lower the rates, but you’ll have to pay for liabilities longer as the car gets older. Don’t forget to ask what any line expenses in the purchase agreement mean, and only offer your down payment after negotiating the price of the car.
She also says to make sure the due date for your monthly payment works with your money habits. You can ask for a due date at the beginning, middle or end of the month so you’re not caught paying late fees.
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