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Summer 2012 - Vol. 6, No. 3

Travis Credit Union - Home

Seven steps toward buying a car

If you're thinking your Summer of 2012 will be even more memorable with a new car, remember that being spontaneous is not always financially savvy. Instead of rushing to the dealership to pick up your dream vehicle, you'd be better off to take the time to determine how much car you can afford, what type of credit you have, the best interest rates and how to get the best price for your purchase.

While no one likes to do homework during the summer, researching your car purchase first could save you hundreds or even thousands of dollars when you actually sign on the dotted line. To help you get focused on savings, here are seven steps to consider when buying a car:

Determine your budget
Crunch the numbers and see how much of a car payment you can afford. Don't forget to include related expenses such as fuel, car insurance and maintenance. Once you have an idea, use an auto payment calculator to see how much of a total vehicle price you can afford. Try our online auto loan calculator.

Check your credit
It's a good idea to review your credit report beforehand to pinpoint any areas that may need improvement or a resolution to a problem. This is important because the interest rate you receive on your auto loan will be determined by your credit score and credit report. Generally, the better your credit score, the lower your rate will be. By law, you can get a free copy of your credit report from each of the three major credit bureaus at

Select a car that fits your needs
Consider how you will use your car. Will it be for short, daily commutes or long, open highway traveling? Will you need something that can handle extreme weather conditions like snow or the desert? Study a car's safety and reliability ratings, and also check with your auto insurance provider about the rates for various makes and models. A cherry red convertible may make your summer endless, but you may pay a higher insurance premium for that type of car.

Buy or lease?
While researching your car, consider both lease and purchase options, as each comes with its own considerations. If the idea of always driving a new car matters more to you than saving money in the long-run, leasing might be an option to consider.

Seek financing
Call the credit union, visit a branch or go online to choose the rate and term that is the best option for your budget. Get pre-approved on your auto loan so you can shop with confidence and so you don't get talked into buying more car than you can afford. Remember, the larger down payment you make, the lower your monthly payment will be.

Test drive and history checks
Once you've found a vehicle you're interested in, do a test drive and check the vehicle's history if it is used. Pay special attention to the transmission, shocks, brakes and alignment if it is a used vehicle. If you aren't sure what to look or listen for, bring along someone who does. Write down the Vehicle Identification Number (VIN) and use it to get a vehicle history report for used vehicles.

Be assertive and firm to get the best price
By doing your homework on car prices, you'll have a good idea what they sell for and how much a dealership has marked up the price. Companies such as Kelley Blue Book, TrueCar and Edmunds specialize in tracking the average price of vehicles and rebates or incentives available. Negotiate the car price and any trade-in separately.

Remember that as the buyer, you're in control of the situation. Ask about incentives and rebates, and determine if they're really a good deal. Walk away if you are not happy with the deal and try again another day. Summer will still be here.

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