DCU - Members' Monthly

StreetWise
Top Tips of Auto Buying

Slow down. Speed in the automobile business is very dangerous. When you rush, you don't think, and you don't compare. So, use the web for education, but don't let it rush you into buying without thinking.

Do your homework. Are safety and reliability important to you? How about mechanical reliability? Sellers can't tell you if the cars they sell are unsafe or mechanically unreliable. But our link to the Center for Auto Safety can help you learn that information.

Never buy a car – on the internet or directly from a dealership – on your first visit. All dealerships want to sell you the first time you contact them. That's because they generally make more money if you don't take time to compare prices. A StreetWise buyer never buys on the first visit! We believe you should shop everyone's prices. We show you how to do that easily.

Never leave a deposit until the seller has agreed to your price. Sellers generally want your deposit so you can't easily shop their price.

Don't fall for "spot" delivery. You've probably heard, "take it home on the spot," the first time you've seen the car. Don't fall for it! Many dealerships spot deliver a vehicle only to call the customer a week later to demand more money. Since the dealership has already sold your trade-in, you're forced to pay more. Dealers call these yo-yo sales. Don't let that term apply to your sale.

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 the best dealerships can have bad people. Don't buy if you're not comfortable.

Be StreetWise when it comes to financing. Did you know a credit union's 6% loan is virtually always cheaper than a dealership's 1% loan? Thousands cheaper! Why? Dealer financing promotions usually offer "1.9% financing or $1,500 cash back." If you take the cash back and use it as a down payment at DCU, our loan will virtually always beat their 1% because you're financing less money.

There's an easy way to recognize the cheapest financing, too. Just put the contracts side-by-side. Insist that any dealership or web site give you a completely filled-out copy of the contract they want you to sign. Fax it to DCU 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!

Remember that the price of the new car isn't where the sellers make money. Thousands of dealers and internet services will sell you a car for cost. But many of those sellers will still make thousands on you. Many give you less for your trade than it's worth, or charge you more for financing than you need to pay, or charge you outrageous prices for warranties and other products. The price of the car is only a small part of the profit to the dealership or internet service.

Remember that DCU is different from any internet site, bank, or dealership. We don't care which car you buy. We just want you to buy the best and safest one. We do care how much money you get for your trade-in and we'll help you get the most. And we do care about your financial well-being. That's because you own us. If you're not financially responsible, we won't be here! That's why our answers are always based on solutions that are best for you.

Read Our StreetWise Auto Buying Guide
Read it online at dcu.org or print (.pdf format) a copy. It's like a workbook. You can fill in the blanks, even take it to a dealership. This guide can save you thousands!

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Have you had a good experience with DCU that you want to share with others? Send us an email at dcu@dcu.org or mail it to:

DCU
Attn: Marketing Dept.
PO Box 9130
Marlborough, MA 01752-9130

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Editor: James Paquette
To apply for a Home Equity Loan, Consumer Loan, or Mortgage anytime, call 508.263.6700 or 800.328.8797 (select 3) or visit dcu.org. For a complete listing of DCU's rates, visit our web site at dcu.org or stop by your nearest DCU branch.