Cents of Community: Buying a Car at the Dealership

This monthly column comes from the Arlington Community Federal Credit Union as part of their mission to financially empower the community. Credit unions are not-for-profit member-owned cooperatives and anyone who lives, works, worships, volunteers, goes to school, or does business in Arlington, Falls Church, Alexandria, or Fairfax County is eligible to join ACFCU.*

Consumers are starting to purchase vehicles again and now can be a good time to shop for a car.

Dealers are offering discounts to entice buyers, and financing options from financial institutions are very competitive. If you’re in the position to purchase a car, here are some things to consider:

• Research cars online first: Know what you’re looking for before you go to the dealership. Research quality, safety, features, price and value so you are prepared when you arrive.
• Compare protection plans and service options between the dealer and a financial institution: Financial institutions may offer options like warranties and GAP insurance that are significantly less expensive than coverage offered by dealerships.
• Shop around between dealerships: Compare cars at different dealerships and determine the “drive off price” of the ones you’re most interested in. Drive off price includes the list prices, processing fees, taxes, registration and more. If you have an existing car that you’re trading in, compare what different dealerships will offer.
• Maximize dealership perks: Dealers are trying to entice buyers to purchase right now and may offer the choice between 0% financing or a cash rebate. Compare that to financing offered by your financial institution. If your financial institution can give you a very low loan rate, it may be a better deal to choose the dealer’s rebate and finance with your credit union or bank. ACFCU offers a calculator to help you determine your best option. Some banks and credit unions may “rate match” if another financial institution quotes a lower rate.
• Shop around if you’re considering a lease: Some credit unions or banks may offer lease-like products with more flexibility and features than the dealerships. Compare options to seek out the most competitive payment scenario.

Not everyone is able to make a major purchase right now, but for those that are, this may be a good time to buy a new or “new-to-you” car. For more tips, contact the ACFCU Loan Advisors at 703-526-0200 option 2. Or apply online to get started, and one of our Advisors will reach out to you and help you through the process.

*Membership eligibility requirements apply. Federally insured by NCUA.