In August 2020, Lisa Harris led a webinar on “Smart Car Buying”. In this free webinar, you will learn how to determine what you can afford, how to navigate dealerships, your warranty options, and more.

Check out the video and transcript below!

Lisa: We possibly can, concerning how to buy a car. Right now we’re having some technical difficulties with our Microsoft Outlook. So I’m actually working from a home computer and my work computer all at once, so as you see me going back and forth. That is the reason why. So we’ll get started here. So our seminar objectives today, we’re going to talk about:

  • Determining what you can afford.
  • How to navigate through dealerships, whether to buy new or used.
  • Your warranty options.
  • And your financial insurance and options as far as your warranty, gap, products, and things like that. Your credit life/disability and other backend products that are often sold at dealerships. But, what very few people realize is that we do offer these products here at the credit union as well, and normally at a much-discounted price. 

Determining What You Can Afford

I think that this right here is one of the most important factors in going out car buying, determining what you can afford. And basing that off of your income, your net income, your base income, determining your total expenses that will be involved with your car buying process. And when we say total expenses, we mean what would your payment be? Your insurance, your maintenance, your tag renewals, your unexpected costs. Let just say you need tires or you have to use your warranty, what would be your deductibles, things like that, etc. So when you are determining how much vehicle that you want to buy, please factor in all of these unexpected expenses that comes along with it. What we don’t all always factor into when we’re doing car buying is that we don’t factor in, is the price of insurance and gas.

So which vehicle would best fit your need? When you’re out shopping for a vehicle. With that, would you need a sedan? Are you looking for an SUV? And whether an SUV, is that a large SUV or a smaller SUV? So we want to focus on what type vehicle best fits your family needs. So when we’re getting into the process of determining that, Google is a very good friend of yours. First, determine what we’re looking for. And then when we determine what we’re looking for, and then we get a price in mind of how much we want to get pre-approved for. Now, when you go in and get pre-approved and you come through us as the credit union, is that you ask for a certain dollar amount based upon your findings of what you can exactly budget for. Keep in mind that if you go in and you ask for a certain amount, know that that is negotiable and you got a max going up to, this is how much I want to spend on the vehicle. And we want to make sure that we’re making informed choices and decisions about this major purchase that you’re having. So you can control your financial future and your outlook there.

Factors to Consider

  • We want to check your consumer credit reports. 
  • The affordability and the depreciation on whether we’re going to go new or used, certified pre-owned.
  • Your fuel economy. You must take that into consideration, as always.
  • And whether this vehicle is conducive to your family’s needs. Is it big enough? Do you need an SUV or car? 
  • Do you want to lease or buy? We don’t offer leases here at the credit union, but leasing is always an option by going through the dealership. 
  • And also budgeting and those extra expenses as far as your gas, your maintenance and your repair costs for the future. 

Navigating your way at the Dealership

Now, this right here is very important in getting started. Is that before you actually go on to a dealer a lot, shop around, go online. Of course, pick out the brand of vehicle that you’re looking for. Do a vehicle checklist. We want to see whether you want to look at the window sticker cost or if it is a used vehicle, we want to see how many mileage, what year it is because the year, the mileage is going to dictate the term that is being offered. Also, a used vehicle depending on the year, is also going to dictate the rate that is going to be able to offer. Because generally, vehicles that are three years and newer, you get a better rate than a vehicle that’s five years or older. So also keep that in mind when you’re making these decisions. And also being prepared and getting ready to negotiate the best price possible.

Getting Started

Find a dealership that is conveniently located near you. Again, it depends on the brand in which you decide that you’re going to go with. Let’s just say if you live on the south side, then for maintenance and service reasons, which one of these dealerships that are closest to you. When we’re out shopping and you’re getting quotes from dealers, you want to make sure that you get a sign buyer’s order. And what the buyer’s order is? Is that it specifically states the vehicle, the vehicle information, it has your name, the dealership name. Also, it has the authorizing person at the dealership that authorizing this specific amount. And also you do want to check with the service department and make sure that they have a full service department that they’re able to repair any mechanical issues that you may have with the vehicle.

Shop Around Online

Sometimes you can negotiate a good deal within a certain mile radius. Because we do live so close to the Georgia border, is that often we have a lot of members that do travel into Georgia for different automobile loans. So often you can wait those online prices with a lot of the local dealerships in order to compare those to get a better possible deal. You do want to check the classified ads. Often, we are living in a military town. We have a lot of military personnel that have to leave and go on orders elsewhere. So what they do is that they have to sell their vehicles, and often you’re able to find some pretty good deals based upon that. Because they’re just trying to sell the vehicle and move on. You want to check safety records. Whenever you’re buying a used vehicle, you do want to check the CARFAX, you want to check whether this vehicle has ever been in a car accident. And also with every service they’re provided on that vehicle through a dealership, it also offered mileage. Because you know exactly if this vehicle has the correct miles or not or those mileage then rolled back, because that does happen in this industry.

It is a several car websites that you can go to, but one that is free, it is called VINCheck. VINCheck is a free website in which this website you just put in your 17-digit VIN number. It would tell you everything is about the vehicle, every time that it went in for service, ever been in a car accident, is it a branded title? And what a branded title is? Is that this vehicle has been deemed by the insurance company as a total loss because it has frame damage or something major that’s going on with that vehicle. So you can also check against that. Because most lenders will not lend against a branded title. You can search instead of going on the dealer’s lot. You can also check inventory at each dealership by shopping online.

When you’re making the decision, know what you’re looking for. Visit at least three dealerships, go to websites, see where these vehicles are located, go check them out, physically put your hand on there. But now when you do get to the dealership that you can often be so amazed or you see a very nice vehicle that you’re all excited about, and then you can often forget about everything that you’ve done your homework on. So often, it’s best to take someone with you to kind of keep you grounded and leveled.

Vehicle Checklist

We want to be the visibility. You want to make sure that it’s comfortable. It has enough leg room, it has enough headroom. You do want to test drive the vehicle for road noise. You want to make sure that it is working as it needs to, with your conditioning, your radio sound quality controls. And also, whenever you’re buying a used car, if you’re buying from a dealership, generally it is some type of warranty on that vehicle when you buy it, of at least 30 days. However, if you’re buying from an independent or if you’re buying from an individual or buy here, pay here, often when you purchase these vehicles that they are as is. And so that is where you want to be become even more stickler of what exactly what you’re looking for. But also when you’re buying a used vehicle, you want to take that vehicle and get an evaluation done independently from the person in which you’re buying it from, to make sure that it is functioning and working correctly before you make the purchase. 

When we talk about window stickers and non-window stickers, the manufacturer suggested retail price. A lot of times on the new car, you will see this big, white paper that stuck in the window and the dealer invoice will vary. Generally, with the window sticker depending on the vehicle in which you’re purchasing, whether it’s a truck, car, a luxury brand vehicle, or a domestic unit, it can have anywhere from a 3% to a 7% markup in the window sticker. The optional equipment is often listed on there. The rebates, vary depending on the manufacturer and what they’re offering. And also is often dealer incentivized rates as well. You do have what they call dealer holdback. There’s a lot of pricing that the dealer has, that they can leverage there. So that we don’t often know, but we can say that we do have… well, I say a 3% to a 7% markup on all window stickers. 

Now what is worth? Especially when you’re dealing with a used vehicle and you can always come to the credit union and get a NADA value. And there’s several values out there where you may hear, most frequently you have NADA, that’s generally what we use here in the southeast. You have Kelley Blue Book. So in a NADA, you have what we call a trade-in value, a retail value and a loan value. Most of the dealers are going to base their pricing off of the retail value. So you have various purpose for that, what you call a dealer invoice price, a true market price and a value trade- in price, in which there is a trade-in, retail and MSRP.

Negotiation Tips 

When you’re negotiating a contract, first, determine what’s the most important items are to you. Is it price? Is it low mileage? Is it the year of the vehicle? You want to read everything before you sign it. You want to negotiate price upfront. Anything that’s promised to you by the dealership as far as, if they’re going to take wonders, are they’re going to give you gap insurance or whether they’re going to give you floor mat. You want to make sure that all of that is included in your contract. When your negotiating price, your price and your interest rate are negotiable, most of the time at the dealership. So know what your credit score is, because your credit score will dictate your interest rate.

Buying Used 

The advice for buying used, of course, check the VIN check. You want to make sure that the vehicle has not been wrecked, you want to make sure that it’s not a branded title and you want to find out what is the actual cash value of this vehicle. You also want to check whether how many miles it has remaining on the manufacturer warranty or is going to be sold as is. 

The best advice for buying used is get an independent person to inspect the vehicle, ask for the maintenance record, you do want to test drive. If possible, talk to previous owners of the vehicle and contact the repair shop.

Used Car Inspection

Used cars, you want to check for excessive dings and scratches. You want to check tire tread. You have to consider, do you want to negotiate a new set of tires in there? You want to check the brake pads. Any wear and tear items, you definitely want to check because those things that you generally have to replace every 10,000 or 12,000 miles. You want to check to see where there is damage to the vehicle. Whether everything is working properly, like windshield, wipers, mirrors, things like that, that you generally overlook during the excitement of purchasing a vehicle. You want to make sure that your VIN number matched. You want to make sure what you’re shopping for online and what you’re actually getting is the vehicle that you’re purchasing, and you can often reference that with the 17-digit VIN number. You want to make sure that, again, everything is working properly and determine what you’re willing to fix in the negotiation of the vehicle, especially when you’re buying a used vehicle.

FTC Rule

All used cars are supposed to be on display, just as the MSRP is on a new car. You have what they call the FTC Used Rule and which is called a Buyer’s Guide. And the Buyer’s Guide was simply stayed whether this vehicle has the remainder of manufacturer warranty, or is sold as is, or the dealership in which you’re selling it is offering a 30, 60 or 90-day warranty up to— I’ve seen them going 90 days or 3,000 miles. So it just depend on what the dealer is offering,

Buying from a Private Party

When you’re buying from private party, you want to also apply the same rules, as if you’re buying from a buy here, pay here lot. You want to take that vehicle, you want to get it evaluated by a  reputable dealer. Also, you want to do a VIN check to make sure that the vehicle and the title was not branded. You want to make sure that an individual is going to live up to the promises of the contract and whatever that you’ve negotiated because these vehicles are often sold as is. So once you give them the money is pretty much, you’re responsible from there. Generally, there’s no warranties offered, unless it’s a newer vehicle and you have remainder of manufacturer warranty. 

Now, here at the credit union is that we do offer extended service contracts in which you can purchase those. We can get 12 months, you can always go all the way up to 60 months. It depends on what your budget is.

New car warranties are offered by the manufacturer. You can get a three-year 36, a three-year  50, a four-year 50 or even a five year’s  50,000-mile warranty. And also, you do have what they call maintenance warranties as well. These maintenance warranties are often covered your oil changes, your tire rotations, frontend alignments and stuff like that, but that is also sold less and additional cost.

Full Warranty on Used Car

We’ve already discussed that one.

Don’t pay for things that you really don’t need. This is a pretty big item that normally dealers make quite a bit of money off of consumers. Things like etching of the VIN number on your windows. That is really not needed because the vehicle has the VIN number, is already on the frame of the vehicle, at least in four other places on the frame; also is in the window and is in the doors. So etching is something that you don’t need.

Rustproof 

We live in the southeast, and unless you purchase in a vehicle that comes from up north, you don’t have to deal with a lot of rust. So again, when we do the VIN check, you can tell where that vehicle origin is, and where it was first titled. So if you buy a vehicle that’s from the northeast, then it should already have undercoating in that.

Service Contract

Generally, again, it depends on the mileage when you buy the vehicle and where do you want to go from there. All warranties, if you buy any certified pre-owned warranty, you really don’t need to buy an extended service contract because the vehicle is covered up to 100,000 miles. But a certified pre-owned unit is normally a little bit of extra cost because it warranty that comes with it.

When we’re talking about a service contract as we just touched on, we don’t want to have double coverage as a certified pre-owned and buy an extended warranty there. You want to factor in what type of deductibles that you want to purchase because you can get a zero deductible up to $100 deductible; the higher the deductible, the lower the premium. And you want to deal with the length of the warranty, whether you’re going to get 12,000 miles or 48,000 miles. So there’s a lot of variables in there. 

Deciphering Finance Options

Oftentimes, this only applies generally with new vehicles. Is that when you see a lot of dealers advertising 0% financing, sounds great, but it’s not always the best option for you. Let’s just say that if you buy a vehicle that’s $25,000 and the dealer is offering a $3,000 rebate at 72 months at 1.9 financing, but now is in lieu of the rebate. So if you take the rebate, then the price of the vehicle goes to 28,000. And at 1.9 for 72 months, your payment is $412 a month. But if you did 25,000 for 72 months at 3%, in which if your credit qualifies for that, you’re actually going to be paying about a $32 less a month per payment. So the best thing is that when you go into a dealership, don’t be lured in with low interest rates. Because the low interest rates is often an offset when you’re looking at the amount of rebates that you’re giving up. Because it’s best to take $10,000 rebate and a 3% interest rate versus a no rebate at 0% for 72 months. So that’s not often the best deal. So we want to put that in a finance calculator to see which one is actually comes out best for you. 

Auto Insurance Coverage 

Is that most lenders will allow you to have up to $1,000 deductible. With this deductible, you want to base your insurance premium based upon what you can afford in event of a collision. If you have $1,000 deductible, do you have $1,000 available to pay that deductible to get your vehicle repair? Or do you want to consider a lesser deductible? The lower the deductible, the higher your premiums. So when you’re factoring in whether you’re going to buy a car or not, or whether you’re going to buy a sports car, or you’re going to buy a truck, or whether you’re going to buy a sedan, also call and get insurance quotes, to see exactly how much this vehicle is going to cost you insurance wise. Because it also varies on what county you live in, how much your insurance premium is going to be as well.

Rates vary, yeah, and they change. They could change daily. But most of the time, they change every 30 days. So your rate is going to be based on credit. Your payment options is going to be based on the term in which you use. Your insurance premiums are going to be based upon where you live, also is going to be based upon your driving record and your backend products as far as your gap, credit life, credit disability. All of that is going to be based upon whether you want that product or not.

The Final Checklist 

Is that, first, determine exactly how much vehicle you can afford. When you’re determining how much vehicle you can afford, determine all of these variables as far as your maintenance, gas, your insurance, and what this vehicle is actually going to cost you every month. And then you want to go in and then you want to get pre-approved. You want to go in to see exactly what kind of rate ,what kind of term and what kind of payment that you can afford. The interest rate will be dictated on your credit history. Know what you want before you set foot on any dealership, know what exactly what you’re looking for. Research everything online. Negotiate as much as you can online. So you won’t be pressured when you actually get to the dealership. Because the pressure is going to be coming from a lot of different ways and a lot of people normally fall upon the pressure because buying a car is not something that you do every day. So you’re unfamiliar with a lot of the tactics in everything that is used. Always know is that, if, this is maybe not the best deal for you. And also when you go out, is that, if that car has gone when you come back, then it’s probably not the car for you. If it’s for you, it will be there when you get back, or it’s going to be at another dealership when you’re shopping. But it’s always a vehicle just like that out there. So don’t be pressured into buying something and end up with buyer’s remorse. Negotiate the best deal possible based upon what exactly you’re looking for, and test drive the vehicle.

And here at 121 Financial Credit Union, we are your hometown credit union. We’ll be more than happy to assist you with your pre-approvals, help you with your car buying process, and also offer advice, offer loans, and to help you at dealerships. We do have different relationships with dealers all over town. And we can help you find exactly what you’re looking for. And then, we can try to help you negotiate your deal as well. You can contact us at 121FinancialCreditUnion.org or you can call in at (904) 723-6300 or you can email us at ask121@121FCU.org

We have a couple of questions here. And we can get started here. We got from Chris. 

Q: Can you also provide information on how 121 Financial will finance cars considered as exotic, Audi R8?

A: Based upon your credit history, we will consider all automobiles. Generally, we do not lend on exotic vehicles like R8, but we will take a look at the application and then we’ll go from there. We generally lend on vehicles that are 10 years or newer and a certain mileage. But we’re open and we will consider all loan applications, so you can always submit that and we’ll take a look at it. 

Q: Curtis Brown had a question. Does buying in Georgia saves any sales tax or other fees that are more expensive than buying in Florida? Does that present a problem registering the vehicle or title issues? 

A: No, it does not present a problem registering or title issues. If you do buy in Georgia, you will not pay Georgia’s sales tax, but you’ll still be responsible in paying Florida’s sales tax when you bring the vehicle back and get it registered here. 

Q: Chris also asked, do you recommend to pay for any pre-purchase inspection by a third-party mechanic prior to buying a vehicle?

A: If you’re going to buy a used vehicle, especially an exotic vehicle, I would take it to a certified dealership to have that vehicle thoroughly checked out. It will be an expense to you, but it’s best to know exactly what you’re buying, especially when you’re buying a very expensive vehicle like an Audi R8.

We are unmuting everyone for questions. I know we covered a lot of topics, and we kind of glossed over a bunch of things. But if there’s anything in particular that you want to ask, we’ve unmuted everyone for questions.

Male Voice #1: Were there other mechanics certified for inspection?

Lisa: Pardon me. Hello? Someone had a question about certifying. We have any more questions.

Male Voice #1: A warranty is worth it.

Lisa: Pardon me.

Male Voice #1: A warranty is worth the money?

Lisa: Yes. Whenever you’re buying an extended service contract, especially I would suggest that you buy an extended service contract, especially if you purchase a vehicle that is out of manufacturer warranty.

Male Voice #2: I have a question. Will the last amount of your previous car loan, especially if it was with 121 Financial, will that’d be used as a factor to see how much you can get on your next car loan? For example, if your largest amount in car loan was 55,000, is there a percentage rate where you can go up on that one?

Lisa: Not exactly, is taken into consideration. Let’s just say if your previous car automobile, the highest is 55,000, and you’re looking to buy an $80,000 vehicle, that is a reasonable jump. But it’s also based upon your income and what your payment to income ratio is. And generally, we try to stay 20% payment to income or a little less, to dictate how much loan that you’re actually qualified for. And I guess, let me clarify a little more, is that if you’re making $2,000 a month, and you’re trying to purchase an $80,000 vehicle, the payment to income is going to exceed because your payment is going to be just as much as your total monthly income. But if you’re making $10,000 a month and you’re looking at an $80,000 vehicle, and then that’s going to be different, is going to be based upon your payment to income.

Female Voice #1: Hello.

Q: Do you recommend trading a car before the warranty is up? 

A: Not necessarily. Oftentimes, is that your trade-in value is based upon the year, and also when you’re looking at the mileage. Every 5,000 miles in NADA, you lose value. So at 55,000 is 60,065, that’s how your value is also dictated on trade-in. I wouldn’t say that that is a determinant factor before you trade the vehicle in or not.

Female Voice #2: I have a question.. about 2020 SUVs that have been advertised. Are they located at a different dealership?

Lisa: Yes ma’am. New SUVs?

Female Voice #2: Yes. Making online… saying that there are plenty of 2020 SUVs and on price.

Lisa: And they are generally the new vehicles are located at wherever that dealership is, and whatever that brand is. So let’s just say if you want a Chevy Tahoe and then you have to shop all Chevy dealerships. But if you want a Toyota CRV, well, Toyota… that’s a Honda CRV, you have to shop at the Honda store for that. Is there any particular SUV that you’re looking for?

Female Voice #2: I was looking for the GLB, the Mercedes.

Lisa: If you’re looking for new, there’s two Mercedes dealerships here in Jacksonville. You have field Mercedes on Blanding and you do have field Mercedes on Atlantic Boulevard.

Female Voice #2: What’s the interest rate right now on new cars with 121?

Lisa: I’ll get that for you.Hold on one second.I can tell you. Now, I’m going to give you the best ratethat we’re offering right now on a 72-month term on a new vehicle is 3.49% and on 60 months, we’re offering 3.29%.

Female Voice #2: And this month, no down payment when I sign in?

Lisa: Depending on the tier in which you qualify for, but we can finance up to 120% of the value of the vehicle.

Female Voice #2: Do you recommend buying on 2020 versus on 2021?

Lisa: It just depend on what you’re looking for. The manufacturer is often going to offer more incentives on the 2020, since the 2021s are coming out. And they have a whole year to sell those versus the 2020, is the current year model. So it depends on, how long are you planning on keeping the vehicle that you’re searching for?

Female Voice #2: Probably two years. Right now I’m not having to pay any maintenance things.

Lisa: So have you ever considered leasing?

Female Voice #2:  I try and optimize the lease. And then I can’t go around right now, but my phone and pandemic, I don’t want to pay more amount than  what I have on my phone now.

Lisa: Well,  if you’re traveling more than 12,000 miles a year, then leasing is probably not the best option for you. So when you purchase a vehicle, you may want to consider buying an extended warranty or getting a certified pre-owned vehicle that can cover you up to 100,000 miles. Realistically, it takes you three years into a five-year finance to break even, and that’s traveling 12,000 miles a year. So please take into consideration, is that when you’re buying luxury cars is that you’re going to have a pretty large depreciation initially. And it’s probably going to take you about three to three and a half years to get to the breakeven point. So if you’re trading every two years, you don’t want a lot of negative equity. And then when you’re rolling that much negative equity in and then your payments are going to go up, or you’re going to be forced to put down more cash down.

Female Voice #2: Can you repeat what you said about pre-owned vehicle?

Lisa: The pre-owned vehicle as far as the mileage or—

Female Voice #2: The mileage and the warranty.

Lisa: When you’re buying a pre-owned vehicle, if you’re buying one that still within manufacturer warranty and you’re buying it from the franchise dealer. And which when I say franchise dealers, if you go to a Mercedes Benz and you buy a certified pre-owned from a Mercedes store. Is that they can only offer that certified pre-owned warranty through them because they are the representative for that. It often covers up to 100,000 miles. But you can also taking by a Mercedes from Acura dealership, and you can buy an extended service contract that covers you up to 100,000 miles. But often when you buy a luxury car is that an oil change is $300. So please take into consideration that you may want to purchase a maintenance plan as well, to cover the $300 cost.

Female Voice #3: That’s a great question. We just have a couple more come in.

Chris: Hi. Will I be able to have somebody contact me about going over financing for an exotic car because I just wanted to make sure I knew all the factors. I have money to put down a good amount on the car, but I just want to make sure what you guys will consider in regard to the exotic car market and regarding to what other factors you need. I know you said you will look at the current situation, credit score and all that. But do you look at also the down payments to consider those?

Lisa: We will look at it holistically. And I’m going to give you my email address. If you email me your contact information, I will reach out to you personally and work with you. My email address is lharris@121fcu.org.

Q: We have another question in from Linda. I have a 2013 Chrysler Town & Country with 103,000 miles, just paid off a car loan I have with 121. Wanting to find a used car, a better mileage that I can trade in my car to break even or a little extra money. What suggestions do you have? 

A: So you paid off your 2013 Town & Country and you’re looking for a car that has lesser mileage and you’re looking to get the most you can for your trade. Is that correct, Linda?

Linda: Yes. Can you hear me?

Lisa: Ma’am?

Linda: Can you hear me?

Lisa: Yes. 

Linda: I wanted to find a car that has better gas mileage and newer car, but I do not want to go back to having to pay car payments.

Lisa: So pretty much you’re looking for a vehicle that you could trade your vehicle that’s paid in full and just pay just hopefully breakeven.

Linda: Correct.

Lisa: Pardon me?

Linda: I could add a little bit, maybe a thousand or two, but I don’t want to have another car payment. I’m trying to keep it in line, no more car payment.

Lisa: We can, first of all, determine what type of vehicle best suits your family’s need, and then also work with you, once you tell us what brand/type vehicle that you’re looking for. And then, perhaps, we can work with that dealership to see can we find, or to get the deal most closely to what you’re trying to do. But first, determine if you want another minivan, whether you want a sedan, whether you want an SUV. If you’re looking for better gas mileage, then you probably want to go with a sedan.

Linda: Or I’m thinking an SUV mainly, possibly because I like to have a height a little bit, I like to be up a little bit, but I don’t need all the room that I have in my minivan.

Lisa:  Well, we’re more than happy to assist you to try to find your vehicle that best suits your needs at this time and to have little or no payment at all.

Linda: Thank you.

Lisa: We got a question here from Tandy Taylor. 

Q: Are you able to avoid certain fees by financing directly with the credit union rather than financing through the dealership? 

A: No. The same fees are going to apply on your buyer’s order. Generally, it is a dealer doc fee. You do have doc stamps. And same way goes to the state of Florida, you have your taxes in different counties in which you live in. They have their taxes as well. So, no, the same fee is going to apply across the board.

Lisa: Do we have any more questions?

Female Voice #4: I have a question. Are you familiar with the Costco buying car through the Costco program? Do you have thoughts on that?

Lisa: I’ve heard something up on that, as a matter of fact, I am a member of Costco and I’d  received an email on that. What that is? Is that Costco has worked out a deal with the different manufacturer in which they’re offering new car prices at employee pricing. And you go through them and then once you receive this certified number, you take that to the dealer and they supposed to offer you employee pricing on that.

Q: Patricia asked, will I be able to call you to see if a price is a great buy? 

A: You can email me the vehicle information and I’ll do a little homework for you. And then I can give you what the retail NADA is on the vehicle and then pricing. You can kind of determine what exactly you want to pay.

Q:  Is no-haggling pricing really no-haggling? Is what Kevin asked. 

A: All prices are negotiable if you ask me. It just depends on how bad that the dealer wants to sell the vehicle. I worked in the car dealership for over 15 years; I did financing. The scariest person at the dealership is the finance manager. That’s the person is going to dictate just how much money, the interest rate, the pricing and your terms. So when you go into the dealership, be aware that that is the person is really going to dictate your financial future, and do you really want that? To me, I prefer to go to my credit union. And then when you go in there, you have a check in hand, you give it to him because the deal is already negotiated at the credit union. But often, pitfalls does happen when you go at the dealership because it’s human nature. When someone says I can offer you a better deal. We all perk up because we want to hear. But what is your definition of a good deal? Your definition of a good deal is whatever you perceive it to be. 

So oftentimes when you go into a dealership, you get smitten with all of the fancy words and you’re already excited about the vehicle that you’re purchasing. And you just want to go home and have your brand-new car. But it is hidden pitfalls that are in there. So that’s why we have these seminars that we’ll be able to tell you, that do your homework prior to going to the dealership. Know exactly what you can afford, know exactly what’s all encompassed into the purchase of the vehicle so you’ll be aware of the pitfalls, know what your credit score is, know what your interest rate, know what term that you want to go. Oftentimes, we will go and we will sign up on an 84-month contract which is a seven-year contract because it has a cheaper payment. We try to trade in two years and you wonder how come you can’t trade, is because you’ve not paid a whole lot of money towards the principal and you paid a lot of interest. So you have to take in a lot of those things, whether you take negative equity. What are you trading? Are you trading a pay for vehicle? Are you trading a vehicle that has a balance on there? So be aware of these things when you go in. 

Again, determine the most important thing that I can urge you to do: determine what you can afford, what’s best for your family include maintenance, gas and insurance, and the upkeep of the vehicle. And then you go in and then you determine how long do I want to pay for this vehicle? Do I want to pay for it for four years? Or do I want to pay for it for six years? Because if you’re looking to trade every two years, is not going to be very long before you’re going to be in a position that you won’t be able to trade because you’re going to owe way more on the vehicle that what is actually we were.

Q: Also, we have a question from Linda. She says your thoughts about buying car through Enterprise where they have a set price. They set the price is the price. Are you saying that you can negotiate with them, same as if you ship?

A:  Normally when you go to a place like Enterprise or Hertz or CarMax, those prices are set in stone and they are based upon a national average. Because often, Enterprise buy vehicles that are in fleet, and these are set prices, and those are generally not negotiated. They have deal set up with different credit unions or different banks [crosstalk 52:47] dollars all, if you go through a particular lender, but that’s something that’s negotiated. Not so much with pricing, is just you’re going through specific lender in order to get that.

Q: Kevin wants to know whether CarMax is a good place to purchase a vehicle. 

A: Yes. I said you go in, if they have the vehicle that you want at the price that you want to pay, and that’s a good vehicle. It is a reputable company. I would suggest purchasing from them. 

Q: Shirley has a question. Do 121 deals with certain dealership?

A: Yes, we do have a preferred dealer list.

Lisa: We have another question here. These are wonderful questions. We have time for one more before we wrap it up. Shirley just emailed me and then get you a list of our approved dealers.

Female Voice #3: Hi everybody. I think we have the last one coming in, Patricia.

Lisa: We got Patricia. 

Q: Do you advise to shop around to different credit unions for best rates? 

A: Generally, I would shop all rates. Google is your friend. You can look up different rates, different credit unions in your market. Beware that some things are… if you’re in Georgia, you’re

in a different market than you are in North Florida versus Orlando. Just make sure that when you’re shopping rates is that you’re shopping for your market.

Lisa: Do we have any more questions? We got one more that just popped in. Let’s see here. Thank you Patricia for joining our seminar. And I know that we covered a lot of information, and we couldn’t talk about each specific aspect of buying a car. But here at 121 Financial Credit Union, we are here, we are your hometown credit union and we’re here to assist  or help. You can always email us at ask121@121FCU.org and we’ll get all of these questions answered for you. And we will assist you in your car buying needs. So we have your best interests at heart. So just reach out to us and we’ll answer all questions as soon as we can. 

Q: We have one more question from Michael here. He said, I owe $12,000 on my current car loan. What is the best way to pay it off quickly?

A: Additional principal payments. When you make each payment at the end of the month, whatever you send extra, make sure that you specify when you make the payment to your lender that you want to apply the extra towards principal.

Michael: Thank you.

Female Voice #3: Thank you guys so much for joining. 

Lisa: Thank you very much. Have a good rest of your day.

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