Many people buy a car on impulse and end up paying more than they probably should. Slow down and give yourself time to think things through, compare, and be confident in what you are doing. There are similar cars to the one on the lot you're considering at that dealership or elsewhere. There is no need to rush.
Do your homework!
Are safety and reliability important to you? How about mechanical reliability? Our link to the Center for Auto Safety can help you learn if a car is safe or mechanically reliable from a more independent source.
Do not buy a car on your first visit to a dealership.
It is natural for salespeople at dealerships to want you to buy a car on your first visit. It saves them time so they have more time to sell to the next customer. If you fall in love with a car too fast, you'll have a harder time being objective and firm in your negotiations. Take time to shop prices at the competition so you are prepared to negotiate a competitive price. You'll know other places to go if the first dealer isn't willing to give you the price or trade-in value you believe you deserve.
Do not leave a deposit until the seller has agreed to your price in writing.
If you give a deposit, you may then feel obligated to buy that car from that dealer. Until you have a firm written agreement on price, you don't want to feel that way. You want to be ready to walk away and shop elsewhere if you don't get the deal you want. The willingness to get up and walk away until the deal is done is your single most important bargaining tool.
Avoid taking the car home unless you have written agreement on price.
It is not unusual for a salesman to invite you to take a car home overnight to try it out. We recommend you don't. If you do, you may become too attached to the vehicle or so obligated to purchase the vehicle you can't negotiate effectively. You don't want to give up your willingness to walk away from the negotiating table. Test drives are good and for a used car you may want your own mechanic to have a look, but don't keep the car overnight.
Avoid mandatory arbitration agreements.
Call each dealership you are planning to shop and ask if you are required to sign a mandatory arbitration agreement. Virtually all consumer organizations and Consumer Reports magazine recommend that you not buy a vehicle from a dealership that requires you to sign a mandatory arbitration agreement. These agreements severely limit your legal rights, though they generally don't limit the dealers' rights to take action against you. If any dealership you contact requires a mandatory arbitration agreement, consider shopping elsewhere.
Stop the transaction if you feel pressured or confused.
Even if you met the salesperson through an Internet site, remember that even the best dealerships can have bad people. Don't buy, if you're not comfortable.
Be StreetWise when it comes to financing.
If you're given a choice of cash back or discounted financing, usually you can reduce the total cost of the financing by taking the rebate and financing with DCU. There's an easy way to recognize the cheapest financing, too. Just put the contracts side-by-side. Insist that any dealership or website give you a completely filled-out copy of the contract they want you to sign. Fax it to us at 508.263.6392. We'll tell you if we can beat their financing or not. And if we can't we'll send you back to them! What if a financing source won't give you a copy of their finance contract in advance? That probably means they're not the cheapest. If you took the dealer financing and are not sure you got the best deal, all is not lost. Contact DCU to see if you can still save money by refinancing the car with a Second Chance Car Loan.
Remember that the price of the new car isn't the only part of the transaction a dealer can make money.
Every dealer deserves to make a fair profit on the transaction just as you deserve to pay no more than a fair price. Each part of a car transaction has fees, extra charges, and possible add ons to the deal. You also could be given a less than fair price for your trade in. Be aware that almost everything on the sales agreement is negotiable if you are willing to walk away.
Remember that DCU is different from any auto web site, bank, or dealership.
StreetWise is all about giving you practical advice you can use to keep more of what you work so hard to earn. As a financial institution you own, we want to help you achieve your personal financial goals. What can DCU save you? Plenty if you heed our advice and give us an opportunity to serve you.
Read our StreetWise Auto-Buying Guide.
220 Donald Lynch Boulevard
PO Box 9130
Marlborough, MA 01752-9130
508.263.6700 | 800.328.8797
ABA Routing Number: 211391825
Federally Insured by NCUA
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