1. Transaction. Transaction. Transaction.

We said it three times because buying a car can mean up to three separate transactions, all rolled into one:

The New Car Purchase
The Trade-In Transaction
The Financing

Three transactions represent three ways for a dealer to make a profit. So treat each part of your buying process as a separate transaction to get the very best deal you can on each one. Over the next several Essential Tips, we’ll review each transaction to help you make the most of all three.

2. Negotiating the Price of a New Car

It’s no secret – the price of a new car is usually negotiable. But how can you make sure you’re getting the lowest price possible? Start by determining the actual Invoice Price of a new car, which is the amount the dealer pays the manufacturer. START HERE for new auto invoice pricing.

And shop around! When you’re pre-approved from UCCU, you can buy a car from wherever you want. 

Here’s a tip:  A dealership’s internet sales staff almost always offers a lower price than you’ll find through the traditional car buying route.  So when contacting a dealer, send an email, and get the lower price.

Remember that on top of the price of the vehicle, you’ll have to pay sales tax, registration, and (most likely) a dealer documentation fee. So review the contract carefully for additional charges or fees and don’t be afraid to ask the dealer to explain each number and exactly what it means.

3. Trade-In Credit vs. Used Car Values

The amount of trade-in credit you receive for your existing car should have no bearing on the purchase price of your new car. They’re completely separate values. Discussing them together could result in you paying more money for your new car than you should and/or getting less money for your trade-in. So don’t mix them!

Check the NADA (National Automobile Dealers Association) for an accurate value of a used vehicle. The KBB (Kelly Blue Book) is another resource, but UCCU uses the NADA, which is traditionally more conservative.

Understanding the NADA values:

• “Clean Retail”  = High Book Value
• “Average Trade-In”  = Low Book Value
• “Rough Trade-In”  = Dealer Trade-In Credit   (if you’re lucky)

You can also browse sites like autotrader.com and the Cars section of the KSL Classifieds to learn what similar cars are currently selling for in your area. You may find that you’d prefer to sell your car yourself. After all, it’s easy to list it online and you’ll usually get more money than you would through a trade-in at a dealership.

One more tip:  Before you buy a used car, research the value, gas mileage, and availability here at AutoSMART.

4. Control Your Financing

Dealers earn an incentive for placing auto loans with local financial institutions, which means some dealerships are highly motivated to guide you into the loan that is best for them instead of the deal that’s best for you.

For example, a financial institution might offer a dealer up to $1,000 for placing an auto loan with their institution. With a commission like that, it’s easy to understand why a dealer might steer you toward that specific loan, even if it’s not in your best interests. UCCU pays a reasonable commission to dealers who help our members get their loan setup at the dealership.

But if you pre-qualify BEFORE you begin shopping, you’ll avoid that risk entirely. You’ll also know your price range and your payments before you even start shopping.

Also, be cautious of accepting 0% dealer financing, which is usually offered in lieu of a large cash rebate. In most cases, taking the cash rebate and then financing with UCCU saves you more money.

5. Know the Process Start to Finish

There are a lot of steps to buying a car! And for most people, seeing these steps laid out from start to finish can provide important perspective and confidence to the car buying experience.

We’ve compiled a helpful list of steps associated with three different car buying scenarios. Simply click and print any of the scenarios that you might be interested in learning more about:

• Buying from a Dealer
• Buying from a Private Party who has a loan on the vehicle (lien holder)
• Buying from a Private Party who owns their auto outright (title in hand)

6. When Buying Add-Ons, Don’t Overpay

Add-Ons can add great value and peace of mind to your car buying experience. While many dealers offer valuable Add-Ons and fair prices, certain dealers may overcharge for them (or even try to slip them in without the buyer noticing).

For example, a dealer mark-up on an extended warranty can be up to 100% over what you could pay for the same coverage elsewhere.**  Another good example: GAP insurance coverage could cost you up to $795 at certain places while you can get the same thing at UCCU for $400.

Buying an add-on is up to you, and there are often great reasons to include them in your purchase. After all, a good insurance plan or extended warranty can help protect you and provide ample peace of mind. But getting overcharged for Add-Ons can cost you hundreds—even thousands—of dollars.

Remember, once the purchase agreement is signed, UCCU has very little authority or influence over the add-on prices you agreed to pay so be sure to consult with us first.

• Click here for a list of popular Add-Ons (and tips on how to save on some of them)

7. Buying From A Private Seller

Buying a car from a private seller is often less expensive than buying from a dealer. But there’s nothing worse than getting scammed or buying a car that’s doomed for costly repairs, especially when you could have avoided either by doing a little research.

When buying privately, check the paperwork carefully. Examine all the legal documents and the details of the car’s history. Make sure the vehicle identification number (VIN) matches the documents. Inspect the title carefully.

Carfax.com is a resource that will provide a detailed vehicle history report on any used car. And many mechanics will provide a thorough, unbiased examination of any car for a nominal fee.

These services cost a little money, but a little money now can save you a lot of money (and heartache) down the road.

8. Don’t Let a Monthly Payment Drive Your Decision

“What kind of monthly payment are you looking for?”

It’s one of the most common questions dealers ask, but be careful. Getting the monthly payment you want could come with a cost – like extending your loan, inflating your rate, or lowering the price of your trade-in.

Instead, protect yourself by getting pre-approved before you start shopping. When you’re pre-approved, you’ll know how much you can afford to spend and what your payments will be.

9. Don’t Get Upside-Down

When you owe more money on your auto loan than your car or truck is worth that’s called being “upside-down” and it can be a difficult situation to be in when you want to sell your car.  If your loan-to-value ratio is over 100%, then you are upside-down.

Remember that on top of the price of the vehicle, you’ll have to pay sales tax, registration, and (most likely) a dealer documentation fee. When buying a car, a good rule of thumb is to keep your loan-to-value ratio under 105%, if possible, then shorten your loan payback to ensure your loan payoff amount is decreasing faster than the depreciation of your car.

10. Relax!

Buying a car can be confusing. And nerve-racking. And downright scary. But it doesn’t have to be.

Because UCCU is here to help, and we’re ready to act as your car-buying advocate.

Just stop by any UCCU branch or call the Buyer Relax Hotline at 801-223-UCCU. We’ll assist you with any part of your car-buying experience and always pre-approve you for the lowest rate, guaranteed.

So you can relax. And get the best deal on the car you want.