Purchasing a Vehicle - a Resource from Three Rivers FCU

A new car is second only to a home as the most expensive purchase many consumers make. Many newer cars have hefty price tags too. That's why it's important to know how to make a smart deal. Spending time now may save money later. Think about what model and options you want and how much you're willing (or able) to spend. Think about your driving habits, your needs, and your budget. Use the Internet to research the value of and information about the vehicles you are interested in purchasing as well as the vehicle you may be trading in. After you're comfortable with the information you have, shop around to find the best price. Dealers may be willing to bargain on their profit margin, often between 10 and 20 percent. Usually, this is the difference between the manufacturer's suggested retail price (MSRP) and the invoice price.

Terminology you should know: Invoice Price is the manufacturer's initial charge to the dealer. This usually is higher than the dealer's final cost because dealers receive rebates, allowances, discounts, and incentive awards. The invoice price typically includes freight (also known as destination and delivery). If buying a car based on invoice price (for example, "at invoice," "$100 below invoice," "two percent above invoice") and if freight is already included, make sure freight isn't added again to the sales contract. Base Price is the cost of the car without options, but includes standard equipment and factory warranty. This price is printed on the Monroney Sticker (see below). Monroney Sticker Price (MSRP) shows the base price, the manufacturer's installed options with the manufacturer's suggested retail price, the manufacturer's transportation charge, and the fuel economy (mileage). This label is required by federal law and is affixed to the window. It may be removed only by the purchaser. Dealer Sticker Price is usually on a supplemental sticker. It's the Monroney Sticker Price plus the suggested retail price of dealer-installed options; such as additional dealer markup (ADM) or additional dealer profit (ADP), dealer preparation, and undercoating.

Financing Your New Car There is a strong chance you will decide to finance your car. If you finance, the total cost of the car increases. That's because you're also paying for the cost of credit, which includes interest and additional loan costs (depending upon your lender). You'll need to consider how much you can put down, your monthly payment, the length of the loan, and the annual percentage rate (APR). Keep in mind that annual percentage rates usually are higher and loan periods generally are shorter on used cars than on new ones. Note: You can view current Three Rivers rates on our website. Sometimes, dealers offer exceptionally low financing rates for specific cars or models, but may not be willing to negotiate on the price of these cars. To qualify for the "special" rates, you may be required to make a large down payment. With these conditions, you may find it's more affordable to pay higher financing charges on a car that is lower in price or to buy a car that requires a smaller down payment. To help determine what your monthly payments might be, utilize our Loan Calculation Wizard. You can also compare a possible loan to your current loan by utilizing our Loan Comparison Wizard. Three Rivers Federal Credit Union has established relationships with most of the dealers in our community. This means you can complete the paperwork for a Three Rivers auto loan on the spot. We streamline the process so you can get quick approval. However, you can also apply on-line if you already know the price or want pre-approval. You should strongly consider purchasing credit insurance to pay off your loan if you should die or become disabled. Many insurance experts consider credit insurance, offered through credit unions, a good value. The additional cost breaks down to just pennies a day. This coverage will provide you with peace of mind should your car be totaled or stolen and, for your convenience, the cost can be included in your monthly loan payment. Be sure to talk with your loan representative at Three Rivers for more information on this option.

Zero %: Too Good to be Real? What could be wrong with these low rates? Plenty if you take a closer look: - Low rates are often only available to those with the best credit records. One small blemish, the rate goes up. - Many companies offer these low rates for terms up to 36 months or less, which increases the monthly payments. - The rates are sometimes only offered on slow selling models and not popular cars and trucks. Also, consider the total cost of the loan. Will you be charged an application fee? Is there a pre-payment penalty? Would you be required to pay off more of the interest earlier in the loan (front loaded interest)? You may carry a larger principal balance longer, meaning at some point the value of the car could be less than the balance of the loan. At Three Rivers, we don't play those games. You have the power of choice with your auto loan. Choose your make and model.

Trading in Your Old Car Discuss the possibility of a trade-in only after you've negotiated the best possible price for your new car and after you've researched the value of your old car. Though it may take longer to sell your car yourself, you generally will get more money that way than if you were to trade it in.

Considering a Service Contract Service contracts provide for the repair of certain parts or problems. These contracts are offered by manufacturers, dealers, or independent companies and may or may not provide coverage beyond the manufacturer's warranty. Remember that a warranty is included in the price of the car while a service contract costs extra. Before deciding to purchase a service contract, read it carefully and consider these questions: What's the difference between the coverage under the warranty and the coverage under the service contract? What repairs are covered? Is routine maintenance covered? Who pays for the labor? The parts? Who performs the repairs? Can repairs be made elsewhere? How long does the service contract last? What are the cancellation and refund policies?