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Pre Approve your loan before you shop



Pre-Approve your loan before you go shopping. Dealers make a large part of their profits through the financing process. Salesmen make their living by selling you warranties and add-on services at a markup. They can also use creative financing to disguise what you are really paying for a car. Also, when you fill out an application at the dealership, you are giving them approval to send your personal information to as many financial institutions as they choose.

Information is power. By pre-approving with ISU Credit Union, we can help you navigate the car buying process. Keep reading...

Making the wrong car buying decision can destroy your credit forever! Determine what you can truly afford to pay for a new car. Remember, you might not mind paying $400 per month for a shiny new car, but you will have that same payment three years from now. Will you mind making that payment when the car is a few years old?

Do you plan to keep this car forever? If you are a person who gets bored with cars and will want a new one in a couple years, don't get a loan over 48 months. You will likely lose thousands when it comes time to trade.

Shop online before and during. There are a multitude of online car buying sites you can use to see what cars are available in your area. Donít hesitate to extend your search distance. A short drive can save you thousands of dollars.

Donít trust that the price marked on the windshield is their best advertised price. Be sure to look at the dealershipís online advertisement. Some dealerships list a discounted price on their web site in order to attract buyers from greater distance. There is no law requiring them to offer you that price if you donít ask for it.

Every price is negotiable. There are no exceptions to this rule. Dealers are prepared to sell the car at a price lower than that written on the windshield. If you donít haggle the price down, you are only giving more money to the seller. Here are some ideasÖ.

Because you were smart and pre-approved your loan, you can use your approval amount as Ďthe most you can payí. If the difference is small, most dealers will work with you.

Find a similar year and model of vehicle at another dealership or online and ask them to match that price. If they donít, go to the other dealership. You can always come back.

Talk to you mom, dad, or significant other who isnít emotionally attached to the car and make them your backbone! Dealers hate it when a third party enters the process because it makes their job more difficult. Making it difficult on the dealer gets you a better price.

Be prepared. The dealerships are experts at pressuring you to close the sale. Until you sign the final Purchase Order Contract, you are not obligated in any way. If you feel uncomfortable at any time in the process, WALK AWAY!

Know the process. The salesperson might ask you to write your offer on a piece of paper and initial it. He/she will then take it to the manager and 'go to bat for you'. Don't beleive it. Everybody makes more money if you pay a higher price! He/she will then come back with a counter and/or something that is designed to confuse you. You can again counter and sign your intitals. Then the process starts all over again. If you don't feel comfortable with your last offer, even if you initialed it, WALK AWAY!

There is no car return law in Illinois. Don't believe you can just bring the car back if you get it home and decide you don't like it. The dealer will gladly take it back... for pennies on the dollar. You may lose as much as half if you take a car back to the dealer.

Bonus Question: Do you really need an extended warranty? Do you know what you are paying for it? Extended Warranties can be a good thing in the right situation, but it is important to know what you are paying for it. Purchasing your Gap and Extended Warranty through ISU Credit Union will most likely save you thousands of dollars over the dealer's offer.

Your feet are your best friend. Walking away from an uncomfortable process might save you from making the biggest financial mistake of your life. Don't be afraid to take some time to think or to ask your credit union. If you decide it's a good purchase, go back and get it.

Always remember, if you ever feel pressured or uncomfortable, you can always WALK AWAY!