FAQ

Frequently Asked Questions

What's the best time of month to shop for a car?

Keep in mind that prices such as MSRP, invoice and dealer cost don't vary from day to day. When buying a vehicle the only two things that can change are the willingness of the dealer to sell at a lower price to meet quotas or if the manufactures increase the money available in rebates or dealer money. There are also general trends in the car industry that are normally true. One of the more recent trends we've noticed is that mid-month the manufacturers have increased rebates, bonus money and dealer money. So if you are working on averages and percentages, the best time to buy a car tends to be from the 16th to 31st of any given month.

What time of year is the best to buy a vehicle?

With new vehicles, the time the manufacturers give the highest rebates and dealer money is normally around the spring auto show (March or April) or at the end of the model year (August or September). The only drawback to buying in August or September is that you might not have good selection on the vehicle you're looking for because it is so late in the year. Keep in mind that sales of used cars and new cars can vary due to the economy, the market, and even the weather.

Should I trade my car to the dealer?

In almost every situation, if you sell your vehicle yourself you will increase the money you put in your pocket by $1000 to $1800, or more. If you don't mind putting on your sales hat and dealing with customers who are looking at your vehicle, it will save you money.

How can I get the best value for my trade?

The value of your trade will be determined by what your type of vehicle is being sold for at local auctions. You can get book values from you credit union (link) but most of the time your real cash value will be lower than what the books and the internet values are showing. The best way to get a good value for your trade is to keep the trade price separate from the sale price of the new vehicle and compare the taxable sale amount among at least three dealers.

  • Example New Car MSRP Price $30,500.00
  • The negotiated sale price $23,500.00
  • Trade in value = $ 7,200.00
  • Taxable sale amount = $16,300.00

Remember you are looking for the lowest taxable amount, not just the highest trade value.

Where is new car invoice pricing available?

The credit union has partnered with Chrome.com to offer the most accurate and comprehensive new and used vehicle pricing information available.

What models of cars best hold their value?

This is an important factor when purchasing a vehicle. Most Japanese imports like Honda, Toyota, and their high-end counterparts like Acura and Lexus do very well. The Chevy and GMC SUV's and pickups have also performed very well. Because there are so many makes and models, each vehicle should be researched.

Should I buy an extended warranty?

The short answer…it depends on your driving habits and the reliability history of the vehicle you have chosen. If you have a tendency to keep a vehicle for a long time and drive from 80,000 to100,000 miles, it can be a good investment. Most warranties will run between $1200 to $1400 dollars with most terms running 5 to 7 years and up to 125,000 miles. The credit union partners with CUNA Mutual to provide this service to our members. Click here for more information.

Should I lease or buy?

In most situations you will be better off buying than leasing. When you lease, they generally don't tell you about the up-front acquisition fee of $500 to $600. This is a fancy and somewhat deceptive name for profit. At the end of the lease, they will typically charge you a disposition fee of approximately $300. In addition, they charge you interest for the lease term on both the selling price, known as the cap cost, and the end value, known as the residual value. That means if you lease a $35,000 car with an end value of $21,000, you pay interest on $56,000 for the term of your lease.

Should I take 0% financing or the Rebate?

Most of the time you are better off taking the rebate, and financing through your credit union.

  • If you take the 0% financing you will typically forego a rebate of $3000 dollars or more.You will also be taxed on that amount so you will finance a principle amount of $3195.00 more than if you had taken the rebate.
  • Many people pay their vehicles off early. If you generally do that, you will lose the advantage of 0% financing because the payoff balance of your loan will be higher than if you had taken the rebate.
  • If your vehicle is totaled in an accident, you will be at a disadvantage due to having a higher payoff balance for your loan.
  • Dealers are paid a flat fee of approximately $300 to $400 to get the customer to take the 0% financing even when it is not in the best interest of the customer.
  • The best way to make this decision is to calculate it for your exact situation. Here's a calculator from Consumer Reports to let you do the math.

How should I negotiate?

There are several rules you want to use:

1) Don't Buy On Your First Visit
Sales people are trained to sell you a car today - they are told if you don't buy now they will not see you again. Be strong and clear with them that the only way you're going home in a vehicle today is if they give it to you for FREE.

2) Don't Buy On Emotion
Keep in mind that a willingness to walk away and to be indifferent gives you a position of power. Don't fall for the old lines of "this is the last one we have" or "the price is only good today" or "wow, you look great in that car!". There are always cars and sales on any given day. Prices such as MSRP, invoice and dealer cost don't vary from day to day. The only thing that can change is the rebates or dealer money that comes from the manufacturer. When a manufacturer ends one program they will typically start another program that is as good or better. Buying on the spur of the moment and with emotions, instead of reason and logic, can cost you thousands of dollars.

3) Don't Let The Dealer Know You Are Excited About The Vehicle
There are several reason for this:

  • A) Sales people are always looking for buying signs. When you get excited about a particular car it might increase the pressure from the sales person or even trigger the dreaded response of "let me get my manager". Remember to stay calm, cool, collected, and indifferent.
  • B) It gives the dealer the power position in the negotiations.
  • C) It can trigger the sales person to go to the employee at the dealer that makes dealer trades to put a trade restriction on the vehicle. A dealer trade is made when the dealership you are at (Dealership A) does not have the exact vehicle in their inventory that you are looking for. Dealership A exchanges a vehicle from their lot for the one you want at another dealership (Dealership B). What might happen next is that the Dealership B puts the vehicle on trade restriction so if any other dealer calls for this vehicle in the next couple of weeks - they won't exchange for it. This can work against you when you are shopping and you find a dealer willing to give you a lower price (Dealership C) but the only vehicle available is the one at Dealership B. Of course, Dealership B won't exchange it because you got excited about it when you were shopping at Dealership A. The moral of the story is - if you find the perfect car - don't let on you're excited. Throw the dealer off by looking at a different model on the show floor as you walk around and mention a few other cars you may be interested it - this way they won't know the exact vehicle you are excited about.

4) Don't Give The Dealer Checks, Cash, Or Visa Card Numbers
Only give them a deposit once you are satisfied you have gotten the lowest price possible on the vehicle you are purchasing and the highest price on your trade. Then and only then are you ready to buy and take delivery.

5) Don't Be Rushed, Pushed, Or Pressured
Remember the golden rule - treat others the way you want to be treated. If they won't honor your boundaries, don't do business with them. Remember they are trying to earn your business. Find someone who will treat you with respect.

6) Don't Sign Credit Forms Or Buyers Orders Before A Final Deal
People can unwittingly sign credit forms and buyers orders that when coupled together, approved, and sent in can legally mean that you own the vehicle.

7) Don't Take Same Day Deliveries
If you take immediate delivery of the vehicle, you own it. Unlike other financial transactions, there is no three-day cooling off period in which to reconsider.

8) Do Your Research
Make sure you know what you want. Do your research on the MSRP and the invoice price of the vehicle you are looking for. Find out about resale value, reliability, and the cost of insurance. Knowledge is power and it may keep you from wasting time on a vehicle you don't want. Click here to research car values.

9) Keep The Sales Price Separate From The Trade Value
Keep the sale price of the new vehicle separate from the value of the trade in until the end of your negotiations. The dealer should then subtract the trade in price from the sale price of the new vehicle to give you a bottom line price. This is typically called the taxable amount. This way you will be able to compare taxable amounts when you are shopping between dealerships.

Glossary of terms

Information is your greatest weapon. Here are some frequently used terms you may need to know.

MSRP is the Manufacturer's Suggested Retail Price.
Window Sticker is the same as MSRP.
Dealer Sticker Price is usually a supplemental sticker added by the dealer to include either ADM (additional dealer mark-up), ADP (additional dealer profit), or high-priced, low-cost after market items such as rust-proofing. It is meant to boost the MSRP and allow the dealer to make additional profits.
Trade in value is the dollar amount your trade is worth.
Taxable difference or taxable amount is the difference between the sale price of the vehicle you're buying and the car you're trading in.
RTB means "rebate to dealer".
After Market Options are equipment or chemicals added to the vehicle after it got to the dealer.
Rebates or bonus money are monies given back to the customer from the manufacturer.
Dealer money is hidden money that is available to reduce the net price of the vehicle. It is given directly to the dealer from the manufacturer.

Disclaimer: The information contained on this page is for educational purposes only. DO NOT make any financial decisions based soley on this information, doing your own research is essential to making a well informed decision. DFWAUTOPLEX.com and Teton Media, make no warranties express or implied about the completeness or accuracy of this information.

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