March 2011
What does a dealer legally have to tell me about the condition of the car I am looking at buying?
According to the Wisconsin Department of Transportation website:
Dealerships perform a used vehicle inspection and complete a window disclosure label before offering a vehicle for sale. They test drive the vehicle, and check the exterior of the vehicle, the underside, and under the hood for problems. They also review any paperwork they have for the vehicle, including the vehicle title.
The dealership then completes a window label called the Wisconsin Buyers Guide. The Buyers Guide tells you if the vehicle has any existing problems or important history you should know about. Dealerships are required to list any problems they should reasonably have known about based on their inspection, test drive and paperwork check. They do not have to take vehicles apart or run diagnostic tests to find hidden problems. They also do not have to tell you about future problems your vehicle may develop because of its current age or condition.
Reputable dealers will want to make sure that the vehicles they sell are in good running order and safe. I still suggest that once you decide on a vehicle you should take it to an independent mechanic and ask them to inspect it also. While they can't tell you what may go wrong in the future, they will be able to tell you if there are any visible signs that there may be problems now.
Contact us for additional information on buying or financing a used car purchased through a dealership.
November 2010
Are there any concerns with purchasing a rental?
There is a perception about rentals that they get abused. But not everyone beats their rental cars, and most cars are rented to mature adults with no desire to engage in reckless activity.
So when it comes time to buying a car, and you see a rental car on the market for sale, what should you do?
Like any other purchase, you should weigh the pros and cons.
Rental cars are typically only a year or two old. They are not in constant use, and depending on the how often the car is rented, can have unusually low or high mileage. Rentals are generally very well maintained. They go through rigorous inspection after each use and have their oil changed regularly. And in terms of who the drivers are, consider that a driver is likely to keep the rental in excellent condition because the driver does not want to get charged for anything done to the rental. That being said, some rental cars have been abused or may not be in excellent condition.
A rental purchase can be a great deal, as long as you do your due diligence. Look over the rental yourself. Take it for a test drive. Take it to a mechanic to identify any major problems. Run a Carfax to see if it was in any major accidents. Know your car prices and make a decision based on all those factors.
Sit down with a Glacier Hills loan officer to determine what a fair market value is and if the car has any reported accidents so that you can be armed with all the information you need to get a good deal on a new vehicle.
February 2010
What Kind of Vehicle is Best for my Teen?
It's essential to consider safety, affordability, and reliability when purchasing a teen's first car.
But before looking at vehicles, teens also need to learn what it costs to drive. You can start the process by telling teens the cost of gasoline, insurance, and repairs as they pay the bills. The 2009 edition of AAA's Your Driving Costs survey puts the average annual cost of driving a sedan 15,000 miles a year at 54 cents a mile-$8,095 a year, including purchase price and operating costs. Put that figure into perspective for your teen by converting the vehicle's cost into hours worked. To get an approximate figure, take the number of miles the teen will drive each year, multiply it by 54 cents a mile, and divide the result by the teen's hourly wage.
If you have a financial stake in the teen's car-a down payment, loan payments, insurance, or other costs-then consider creating a written agreement that covers who pays for specific types of expenses, such as insurance or repairs, how the teen's behavior affects driving privileges, and what the consequences will be if your teen fails to live up to the agreement.
When doing your research, focus on these safety features:
- Air bags, including side impact air bags, which can reduce injuries in a crash.
- Antilock braking systems, which can provide directional control in emergency braking.
- Electronic stability control (ESC), which can help reduce rollovers.
Use information offered by Web sites such as AAA, the National Highway Traffic Safety Administration, and the Insurance Institute for Highway Safety. A used sedan with a four-cylinder engine is often a good option.
You can visit AutoLoanHeadquarters.com for additional articles and links to some of the top recommended cars for teens. Or stop in Glacier Hills Credit Union and pick up a free Auto Buyer's Kit.
December 2009
I found a car I like, but the title says manufacturer buyback. What should I do?
The title to that car is branded. There are many permanent brands that may be placed on a vehicle title. There is rebuilt salvage, Hail or Flood damaged, and manufacturer buyback (lemon Law), just to name a few. The first three mean that the vehicle had been damaged and the cost to repair was greater than 70% of its fair market value. A rebuilt salvage has been inspected by a certified inspector and is considered to be in safe operating condition. The last one means that there was a substantial defect in the vehicle that affected its use, value or safety. These were returned to the manufacturer or sold back to a dealer with a discount from the manufacturer.
They all mean different things, but have in common that there was a significant problem and a significant repair to the vehicle. These significant issues may be known to you, but may have unknown long term consequences. 70% of the Fair Market Value is a lot of repairs! The value of these vehicles is much lower than an unbranded vehicle. Resale will be an issue for you and financing the vehicle can be difficult. You need to check for branded titles on all purchase transactions including through the dealer. Get a copy of the title or check the window sticker.
If you have additional questions please contact the WI DOT or see www.dot.wisconsin.gov/drivers/vehicles/brands.htm. Or contact us at GHCU…… If you are financing with us, we offer free CarFax reports that may be able to give you additional information on the condition of the vehicle.
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September 2009
What kind of car can I afford with my budget of $250/mo?
Many car shoppers are "payment shoppers." Most of us have a general idea of what we can afford in a car payment each month. But beware - going to a dealer and giving them the payment you want is not the complete picture.
Many factors go in to determining your monthly payment, and the dealer might be all too happy to play the numbers game with you. To truly understand what kind of car you can afford, you must take into account what kind of down payment you can make, how long of a term you want (terms can now go out to 6 years, which means you pay much more in interest over the term of the loan), your credit score, your trade-in value, and your negotiation skills on buying down the price of the car.
Sit down with a loan officer to determine what kind of car you can afford based on all these factors so that you can go into the dealership armed with all the information you need to get a good deal on a new vehicle.
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August 2009
Is there a difference between used and new car sticker prices?
Simply put, yes.
Every new car or truck is issued a window sticker. Information on this sticker verifies its make, model and year and provides the manufacturer's suggested retail price (MSRP) - thus, its "sticker price". The sticker is a standard for all new vehicles and can let you know exactly what's included with any particular vehicle, as well as helping to ensure that you're getting the exact options you're paying for.
A used car, on the other hand, has no standard "sticker price." It is, essentially, arbitrary. In other words, there is no standard across the board for all dealers. This is important to keep in mind when negotiating down from a used car sticker price. For example, if a dealer is advertising a $4,000 discount, check the sticker price on the car to determine if the vehicle is already overpriced by $4,000.
How do you tell if the vehicle is overpriced? Pricing on new and used vehicles can be complex. There is no standard amount you should pay above or below MSRP or invoice (what the dealer pays the manufacturer for the vehicle) on a new vehicle. Consult with your lending institution before you visit the dealer to see what the new or used vehicle is worth and to determine what you can afford. Additional links and tools are available at AutoLoanHeadquarters.com.
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July 2009
What are 'Invest in America' and 'CARS' and how can these programs save me money on new car?
Invest in America is a program exclusively for credit union members. Members can receive discounts on new Chrysler and GM vehicles in addition to other dealer incentives. For example, you can get an additional $1000 off your best negotiated deal on certain Chrysler products. Go to www.AutoLoanHeadquarters.com and click on the Invest in America link for additional details.
The Car Allowance Rebate system (CARS), commonly called the "Cash for Clunkers" program is designed to increase the number of fuel efficient cars on the road. Discounts range from $3500 to $4500 depending on your trade and the vehicle's fuel economy. Your trade must be less that 25 yrs old and have a fuel economy value of 18 or less MPG. Your new vehicle must have a combined fuel economy value of at least 22 MPG. Your dealer must be registered to give the discount and will take care of all the paperwork. This program currently runs through 11-09. Additional information can be found at www.cars.gov. You can also contact Glacier Hills Credit Union for additional information on these programs.
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June 2009
With everything going on in the auto industry, how might car buying change in the future?
Chrysler and GM are filing bankruptcy. Ford, Toyota and other major manufacturers are losing money. They are all trying to revamp their organizations to be more effective, efficient and ultimately profitable. Many changes may occur in the way you buy a new car in the future. Chrysler and GM are terminating the dealer agreements of thousands of dealerships. Fewer dealerships mean less competition. Competition is what helps drive prices lower. Less competition means higher prices. Automakers are slowing production and as inventories get leaner, prices will rise. Also, new regulations regarding cutting emissions and increasing fuel efficiency are forcing auto makers to implement new, more expensive technology that will also drive up prices. For now and I think through the end of the year, you may be able to take advantage of great pricing and rebates to get some fantastic deals.
On the flipside, can you imagine buying a car at your local wholesale club? What if when you went in to buy your bulk soap, and toilet paper, the next isle had new mini-cars or cheap foreign imports? For these types of cars the normal dealership sales model with a separate building and a full time sales force may not work. Most already have auto buying services, where they have agreements with dealers for special pricing. You might want to check that out!
As always you can check out vehicle values and get more tips on auto buying with our Auto Buying Kit at GHCU……..Have a great day!!!!!
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May 2009
What tips to you have for buying a used car?
Just like when buying any car, you want to make sure you fit the car. If you are the primary driver, make sure you check all the blind spots and that you can reach all the controls comfortably. Ask for the car's maintenance records. When you take it for a test drive make sure you take it on highways and city streets, on hills and curves. And you should take it out in heavy traffic. Are you comfortable with how it handles and stops quickly?
Make sure the radio works, but turn it off when you are driving so you can hear all the creaks and squeaks. Check to make sure all the electrical items work properly. Do the windows go up and down smoothly? Do all the lights work? Check to make sure the air conditioner blows cold, even in the winter!
If you are buying from a private party, I would encourage you to take it to a mechanic to inspect it. It may cost a little, but better to find out a problem before you buy it. Also, most dealers have access to Car Fax, and this can give you some additional background information on the car. If they won't run it for you, Glacier Hills can. And if we do your loan, the service is complimentary.
At Glacier Hills we have a checklist in our Auto buying Kit that you can use to evaluate several different used cars. Stop in to pick one up today.
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April 2009
Am I stuck with the financing my dealer provided when I bought my car?
Definitely not! You don't always get the best financing that you could qualify for at a dealership. A dealer is primarily concerned with selling their car. That is their business. A financial institution's business is getting you a loan. You can always check with your local financial institution to see what they can offer you. I have seen Credit Union members that qualify for 5% loans charged more than 7% or even 10% at the dealership. The lower interest rate could save you $2000 or more in interest payments if you refinance. Also, a financial institution may be able to offer you a vehicle service contract and GAP coverage for less than the dealer did.
Your best option is to get pre-approved before you go to the dealership and confirm what you qualify for. This way you know you have the best financing possible and you will not over pay for the loan just as you do not want to over pay for the car.
Ask your financial institution to see what they can offer you and see how much money you could be saving!
Contact Glacier Hills for a pre-approval at 262-338-1888.
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March 2009
Are there hidden costs with 0% financing?
These days, more and more dealers are offering low-rate loans or cash-back rebates. While it's nice to have choices, they can be downright confusing. While 0% financing can be a great deal, there are potential "hidden costs" to watch for. For example, dealers' low-rate loans and rebates are usually for slower-selling models. These cars may have lower resale values. Also, some dealers advertise 0% financing but only a small percentage of buyers actually qualify. Once buyers get in there, they pay a higher rate.
Consider this scenario:
The low rates that most dealers advertise are for short-term loans. For example, one dealer offers 1.9% financing, but that's only available on two-year loans. A new $20,000 car with a $2,000 down payment (10% down) will require financing $18,000. This translates to an astounding $765 monthly payment-out of reach for most buyers.
The same dealer offers other options, which become less attractive as the loan term lengthens. The dealer's three-year loan has a 4.9% rate, while its four-year loan has a 5.9% rate, and its five-year loan has a 6.9% rate. Financing $18,000 on your $20,000 car at the dealer's 5.9% rate for four years results in a monthly payment of $422-a more realistic outlay for many consumers' budgets.
On the other hand, if you choose the dealer's rebate plan, you forego the low-interest-rate loan, but get a $2,500 cash rebate. Adding the rebate to your down payment can make credit union financing very attractive-because the larger down payment reduces the amount you need to finance.
Your best bet often is to combine a cash rebate - reducing the amount you need to borrow- with your financial institution's competitive interest rate.
Always do the math to see which scenario will save you money. You can utilize the "0% vs. Rebate" calculator available at AutoLoanHeadquarters.com.
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February 2009
Are extended warranties a good value?
When you're itching to drive away in that new car, it may be hard to resist dealership sales pitches for an extended warranty package. But some auto makers now give you an automatic new car warranty longer than the traditional 3 years or 36,000 miles, so an extended warranty isn't always necessary.
A typical buyer of an extended warranty (also called a service contract) pays about $1,000 but only collects on some $250 in repairs over the life of the contract (according to Checkbook magazine).
Although extended warranties sometimes are not worth the price, an extended warranty can provide peace of mind, especially for those who are not readily able to pay for repairs. Consider in this case setting up a separate savings fund for the additional money you would have spent on the warranty, and use it only if needed for car repair. If you don't end up using the money, you have a nice savings built up when your car is paid off. Glacier Hills Credit Union, for example, has a LoanSaver account with a high interest rate created just for this purpose.
Despite pressure from the dealer, you usually have until the end of the vehicle manufacturer's warranty to buy an extended warranty. Look into mechanical breakdown insurance (MBI) also sold by the credit union and by insurance agents. These contracts can cost about half what a dealer will charge you for a typical extended warranty, and MBI usually lets you go to a repair shop of choice.
Whatever you decide, always know what is and what is NOT covered in the contract. Also, check the deductible and make sure you can transfer the contract if you decide to sell your vehicle.
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January, 2009
Is now a good time to buy a new car?
If a new car is what you want then now is a good time. Because sales are down, vehicle manufacturers are offering many incentives to buyers for '08 and '09 new vehicles.
Make sure when you are negotiating prices that you get your best deal before you subtract any cash rebates and that you are getting every incentive that you qualify for. If you belong to a Credit Union you can go to www.LoveMyCreditUnion.org for special incentives for Credit Union members only. These incentives vary by manufacturer.
You may also be offered low or 0% financing. This may not be in your best interest if you must give up a cash rebate to get the low financing. Many financial institutions are offering favorable interest rates right now, and it may be wiser to take the cash rebate and utilize other financing sources.
Contact us at Glacier Hills Credit Union and we will be happy to calculate your best deal with or without the special financing or use our loan calculators.
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December, 2008
Where can I find how vehicles performed in crash testing, or compare safety features of different vehicles?
Safecar.gov is an excellent neutral site to research safety rating, recalls, and to learn to be a safe driver. Even if you’re not in the market for a new vehicle, this site has links to safety recalls, rollover prevention and car seat safety tips. Whether you’re adding a new baby seat, teaching a teen to drive or want to improve your own safety on the road, I would highly recommend this site. A link to safecar.gov and other helpful links are available at AutoLoanHeadquarters.com.
ConsumerReports.org also has a great deal of information on a variety of safety issues. Although you need to be a member to view consumer ratings, the site has a number of free articles and resources available without subscribing.
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October, 2008
Is certification important when buying a used car?
If it's important to you, then yes it is important. Most people say that the reason they like to purchase a certified used car is peace of mind. A certified used car is one in which the dealer does a thorough inspection of the vehicle, repairs it if necessary and then covers it by a limited extended warranty or service contract. Some certified programs include benefits like towing or roadside assistance. You should ask what your dealer's certification includes and how long the vehicle is covered.
With a certified used car the extra warranty coverage is included in the negotiated price of your car.
Certification should never take the place of you thoroughly checking over the vehicle and taking it for a test drive. You need to inspect it just as you would a non-certified vehicle.
All vehicles, certified or not, are to be inspected by the dealer as evidenced by the "Wisconsin Buyers Guide" or used vehicle window sticker. Make sure you check this out and verify the information on it against the vehicle.
If you would like additional information regarding certified vehicles or extending mechanical breakdown coverage on a vehicle contact Glacier Hills CU.
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September, 2008
Am I better off trading in my vehicle, or selling it on my own?
More than half of new-car buyers trade in their old cars. Most could get up to 15% more if they sold it on their own, but trading is far more convenient.
Trade-In: In Wisconsin, a trade-in can reduce the amount on which you pay sales tax. For example, if you bought a new car for $20,000 and had a trade-in for $10,000, you would only pay sales taxes on $10,000. A number of different factors can reduce the amount you receive for your trade-in, including time of year, brand of vehicle and current promotions for new cars. If it’s late in the year, wait until after New Year’s when you are likely to get more for your trade in, get your car in top condition, and check nada.com for a ballpark estimate of what your vehicle is worth. Also, do not talk about a possible trade-in until after you have agreed on a price for your new vehicle. Even if you are leaning toward selling the vehicle on your own, it’s always a good idea to get a trade-in estimate at the dealership. They may offer what you were hoping to get by selling it on your own.
Selling on Your Own: Selling a vehicle on your own can often get you a higher price for your vehicle, but there are some inconveniences to consider. First, consider that you will still be paying insurance on an extra vehicle until it’s sold. You may also have a higher initial monthly payment on your loan until you sell your car and pay off part of your loan. Finally, you will need to be wary of scams, especially if you plan to utilize online resources such as autotrader.com or craigslist.com to sell your vehicle.
The decision to trade-in or sell on your own can depend on a lot of factors. Consider the items mentioned above and talk to a loan officer at Glacier Hills Credit Union to help decide what makes more sense for you.
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July, 2008
The dealer I went to said they do not negotiate on price. Should I go elsewhere?
Not necessarily. But you do need to make sure that the price they are quoting you is the best price you can get on that vehicle. Just because they tell you it’s the best price they can give you, doesn’t mean it’s the best price.
You still need to do all your homework ahead of time. Always check the value of the car before you buy. You can check for vehicle values in many places such as NADA, Edmonds, and Kelly Blue Book. They will all be a little different. Also, check the newspaper or an online source for private party sales for that same type of vehicle to see what they are selling for.
CarFax may be able to give you valuable information on the history of the vehicle. If the selling price is low, there may be issues with the vehicle. Maybe it was in a severe accident, or was flood damaged. This will help you find that out. Glacier Hills can help determine the value and offer free CarFax reports when you finance your vehicle with them.
If you do your homework, you are comfortable with the price and condition of the car and you don’t have to negotiate, it sounds like a good deal to me!
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June, 2008
What is GAP insurance, and do I really need it?
GAP insurance covers the difference between your loan balance and the insured value of your vehicle if your vehicle is totaled or stolen and unrecovered.
You can determine if you need GAP insurance based on how much you finance and how long of a term you take a loan out for. For example, if you put a large down payment on our vehicle and finance for a short term (36 months), you probably do not need GAP insurance because there is no “gap” between the vehicle’s insured value and the loan amount.
Remember, vehicles are a depreciating asset, and some vehicles depreciate much quicker than others. The credit union can show you an illustration to help you determine if you truly need GAP insurance.
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May, 2008
When is the best time to buy a new car?
The best time to buy is when it's right for you. You can sometimes get a better deal if you buy a model late in the year or when a body style change is imminent.
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April, 2008
I'm nervous about negotiating, but I want to get a good price on a new car. What do you recommend?
Bring along a friend or family member to help you keep a level head and not buy on impulse. Have a price in mind before you get to the dealer and don't be afraid to walk away.
Start negotiations on a new car at invoice minus any incentives. Remember to keep the incentives out of the negotiations. You can find the dealer's cost or invoice at kbb.com, edmonds.com or come by and see us. Shoot for paying no more than 2% over invoice, but remember that each vehicle can be different.
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March, 2008
Do I need a service contract if I still have a warranty?
Warranties and service contracts are two separate items. Service contracts always cost extra. Service contracts can extend the time and mileage that certain repairs are covered. The service contracts that the credit union offers can cost as little as half what the dealers' contracts cost.
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February, 2008
When does a car depreciate the most?
A car will depreciate most int he first two years of owning it. Fall and winter are the time of year it will be at its lowest value.
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