Prepare Before You Shop to Get the Best Car Deal

If getting a good deal is important to you, it's critical to prepare for all aspects of a vehicle purchase before you even begin to shop. Otherwise you're likely to pay too much.

The first step in preparing, says Jim Brown, director of the Center for Consumer Affairs, University of Wisconsin–Milwaukee, is to figure out exactly what kind of vehicle you want. Ask yourself how big it needs to be, whom and what you'll be transporting, and how important fuel economy and various safety features are to you.

Also consider what extras you want. If you've decided beforehand what features you need, you're less likely to get talked into adding others.

There are numerous publications and online resources available to help you decide what car best suits you. For example, Edmunds' buyers' guides (edmunds.com), Consumer Reports (consumerreports.org), the Kelley Blue Book (kbb.com), and J.D. Power and Associates (jdpower.com) all include vehicle descriptions, ratings, reviews, comparisons, and other useful information.

It's also important to know what monthly payment amount fits your budget. In a recent Edmunds.com article, Philip Reed, consumer advice editor, cites this rule of thumb: Your total monthly car payments--for all vehicles you own--shouldn't exceed 20% of your monthly take-home pay.

Most importantly, "You need to know how much your desired vehicle is selling for in your area. It might be quite different from other markets," says Brown. One source for this information is Edmund's True Market Value Pricing page (edmunds.com/products/tmv).

If you plan to finance your purchase, get preapproved for a low-interest loan at [NAME OF CREDIT UNION] before you shop. Then, with financing in hand, you can negotiate on a cash basis with dealers.

Lastly, find out what your existing car is worth so you don't accept an excessively low trade-in offer.

Then, recommends Brown, "Visit a number of dealerships and see what they'll do for you. The more information you walk in with, the better deal you'll walk out with."

Call us today for all your auto financing needs at [CREDIT UNION PHONE NUMBER].

Copyright 2006 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

A longer version of this article is available to credit union subscribers of CUNA's Home & Family Finance magazine.

See http://buy.cuna.org/static/pubs.html.