Buying a Car

Woman jumping for joy by her new car

Not something most people like to do.

We all fantasize about a new car. Yet most people would rather chew off their own leg than go through the car-buying process. We really want you to keep both of your legs so here’s some advice to make it a bit easier for you.


This is critical to ensure that you get exactly what you want. Read reviews, consumer reports, ask colleagues and friends, compare options, gather gas consumption data on the make and model you’re interested in. Your goal should be to narrow your search to one or two models. Why? Because knowing exactly what you want will help you get exactly what you want.

Shop around, look at other cars on the road. Test drive them here and there. Read all about them online. Narrow down the make, model, and features you want (and don’t want).

Be sure to keep insurance costs in mind as this will really add to your monthly expenses. A brand new car’s insurance will be higher than a used car. Plus, what type of car you choose will also affect this. Check with your auto insurance rep or shop around so you know what to expect.

How much car can you afford?

The number one thing most people are concerned about are the monthly payments. Check out this auto loan calculator to figure out how much car you can afford. Look at purchase price and monthly payments.

Preapproval is free process where you apply for a loan before you buy a car. This will help you determine how much you can spend. The beauty of being preapproved for a car loan is that you know exactly what price range you’re dealing with and you can shop wherever you want (instead of just one dealership). This will also give you more confidence when negotiating the price. It’s the best way to keep from making poor or impulsive decisions while shopping.

Financing and/or leasing

Paying for your new car requires more research. You want to make a monthly payment that fits your needs without a ridiculous interest rate.

If it’s a new car, you need to determine if you’re going to lease it or buy it. Here’s a great calculator to help you see which is best for your situation. If you decide to lease the car, negotiate the price just as you would if you were buying it.

If you decide to buy the car and you’re not paying cash for it (most of us can’t afford to do that), you will need to decide if you’re going to finance it at the dealership or at your credit union.

DEALER FINANCING VS. CREDIT UNION FINANCING CALCULATOR – Use this calculator to help you determine whether you should take advantage of low interest dealer financing or credit union financing combined with a manufacturer rebate.

If you do decide to finance your car at the dealer, understand that they are making just as much (if not more) money on the financing as they are on the car sale, so don’t let down your guard during this process.  Really listen to what the finance manager is saying and be sure that you know that the extra’s that they present to you are optional, regardless of how they might make it sound in their office.

Should you decide to finance with Linn Area Credit Union, we would not only be thrilled, we would also offer some other products to you when we put together your loan paperwork. These are  optional but be sure to read up on them so you can make an informed choice.

Used cars

By purchasing a used car, you can save a lot of money. A new car depreciates quickly in the first few years and after 3 years, it is worth only about 60-70% of the original price. In fact, as soon as you leave the dealership, your new vehicle is suddenly worth $1,000-$2,000 less. Here are some things to look for when you’re buying a used vehicle.

Another piece of advice: Take the car to the mechanic you trust for an inspection and don’t give a deposit or sign a contract before you do.

Your trade-in

Unless you’re buying your first car, you most likely have a car to sell or trade-in. We suggest you go to NADA (National Automobile Dealers Association) and see what your car is worth. Generally, you will get more money on your old car if you sell it yourself versus trading it in at the dealer.

A negotiation trick: Try to negotiate your trade after the negotiations are complete on the purchase.

Negotiating price

Ah, here we are! This is the part of buying a car that is usually the most intimidating. Here are some great negotiation tips from

  1. Start negotiating from the beginning. Try to get a discount from the very first time you phone about the car. If they ask for $15,000, ask them if it’s worth to come if $14,000 is your bottom line, considering that you are the real buyer. Usually they won’t say “No”, which means that when you come, you can start negotiating down from $14,000, not from $15,000
  2. Negotiate the total price. Dealers always like to add some additional fees on the top of the sticker price. Ask to calculate a total price “on the road” and use it for a negotiation.
  3. Make a lower offer. Don’t be afraid to make a lower offer. If they are asking $15,000, offer $13,000. If the salesperson believes you will really buy a car, he/she will go down in price, and maybe you will then get the car for $13,800 or thereabouts.
  4. Be ready to leave if you feel any pressure or if you have any hesitations about the car – there are so many other cars available. You don’t have to decide immediately. Do not give a deposit or sign anything until you are absolutely satisfied with the car and conditions.
  5. Nothing works better than competition. Let’s say you have two cars on your list that you’re interested in. Show it to the salesperson and say you will buy a car from whomever gives you the better price. For example, if one of the salespersons offers you a $500 discount, phone to another dealer on your list and ask them if they can match it.
  6. Whatever is promised by a dealer, ask to confirm in writing. Negotiate all the details of the deal. If the dealer promises to install new tires, make sure you agree on what kind of tires – cheapest available or of a well-known brand like Michelin or Goodyear. If there is some kind of warranty that comes with the car, make sure you understand all terms and condition. If the dealer promises to show you all the service records, make sure you check them before paying for the car.

Buying from a private owner

When you purchase from an individual (not a dealership), make sure there are no registered liens against the vehicle and that the person who signs the Bill of Sale is the actual owner of the car. Check the vehicle’s registration to make sure the car has not been stolen.

Other bits of advice

If buying from a dealer, read the warranty policy and all the papers including the fine print very carefully.

When buying a used car:

  • If it’s a “Certified” used car, you’d be wise to check exactly what items were checked off and approved because sometimes the car might have a history of an accident in the past, come with a poorly maintained engine and still be Certifiable.
  • Do not rely on a salesperson’s verbal promises. Whatever is promised, get the details in writing.
  • Find out if the remaining original warranty will be transferred into your name. Different manufacturers have different warranty policies.

Other calculators to help when you’re thinking about buying a car:

AUTO LOAN EARLY PAYOFF CALCULATOR – Find out how much interest you can save by increasing your monthly auto loan payment.

SAVINGS GOALS CALCULATOR – What will it take to reach your savings goal? This financial calculator helps you find out.

You can always stop by and talk to one of our financial counselors, as well. Their heads are full of knowledge, and they could be a great resource for you. Good luck, and we can’t wait to see what you end up getting!