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Things to do before walking into the car dealership

Don’t let them catch you unprepared.

This article was sponsored by Navy Federal Credit Union. Navy Federal Credit Union is federally insured by NCUA.

Not all of us have the freedom to choose when we need a new car. As we say in the military, Murphy always gets a vote. Maybe a new addition to your family means you want a few more seats. A better job requires a truck with towing capacity that your old road warrior can’t handle. Regardless of why you’re in the market, buying a car is a large life event, and the process can be convoluted, stressful, and often unnecessarily expensive.

Before you set foot in a dealership to begin searching for your next vehicle, Navy Federal has a few tried and true steps to take that could streamline the process and save both your wallet and your sanity.

Know your budget

The first step to any auto shopping adventure, whether online or in person, is to figure out just how much vehicle you can afford. That means having a realistic picture of your monthly finances, a good credit score, and an idea of just what your dream vehicle should cost. Do the research and take the time to figure out exactly what you do and do not need in a new or used vehicle purchase. Armed with that knowledge, figure out a budget, understand your credit score, and if there’s some work needed, come up with a financial plan to raise it up as high as possible, then use Navy Federal’s handy calculator to determine which car is best for your budget.

There are many factors that go into your credit score, which is a rating that tells lenders how likely they are to get their money back if they lend it to a certain person. On-time bill payments, a respectable debt-to-income ratio, and reasonable credit usage could earn you a higher score, while late payments, defaulting on debts, and very high amounts of debt could lower it. The higher your score is, the better (lower) your loan interest rate should be, since the lenders aren’t as worried about recouping their money quickly before the possibility of a default. A very poor credit rating is 300-579 (out of 850). Anything over 800 is exceptional.

Regardless of your score, anyone planning to buy a vehicle should pull their rating as early as possible. Most of us don’t check regularly, and a lower-than-expected score will put serious limitations on your spending power when you start looking to purchase. With just a few months extra planning you can make efforts to increase your score by consolidating and paying down debt. This isn’t the time to guess how much you can spend.

Get pre-approved for an auto loan

Once you’ve decided to take the plunge and begin shopping for your next car, Navy Federal Credit Union is here to help on auto loan pre approval with most decisions in seconds. This is where a higher credit score can really pay off, since a better interest rate could save you thousands over the lifetime of the loan.

When you get pre-approval, it’s essentially a maximum guaranteed amount you’ll be able to spend on a new vehicle through an auto loan from the bank. Having a pre-approval in hand will give you a great head start on the entire process and possibly save some money when it’s all over, since you know exactly how much you’re able to spend, and what your monthly payments will look like once you’ve driven off the lot in your new vehicle.

The general process is simple. Once you’ve decided on a realistic maximum that you’re willing (and able) to spend on a new vehicle you’ll send your application to a friendly Navy Federal loan pre-approval agent. The application will require information including your current employment, income, as well as any vehicle trade-in information, and the length of the loan you’re looking for.

Don’t forget that pre-approvals are only accepted by dealerships and are not able to be used for private purchases. Unfortunately, if you’re a service member stationed overseas some foreign dealers also may not accept a US loan pre-approval.

Once you’ve submitted your application and it’s been processed by Navy Federal, you’ll receive a text message1 and/or email letting you know if you’ve been pre-approved for the amount requested. Next, they’ll issue a check with the funds ready to go, which can be picked up at any Navy Federal Credit Union branch, or simply mailed to your home. Whichever is most convenient for you! The amount on the check will be for the amount you were approved for, but that doesn’t mean you have to use it all, so feel secure in negotiating the best price possible before you buy.

The Navy Federal team is also aware that when shopping for a car timing can be important. The ideal vehicle may not be around next week while you’re impatiently waiting for a loan pre-approval. That’s why NFCU typically provides decisions on auto loans in seconds, allowing you to jump directly into the car search as soon as you’re ready. Armed with your approved loan amount, you can now confidently begin shopping for the perfect vehicle that fits your family’s needs and your expertly curated budget, knowing that whatever you choose won’t break the bank.

Pick the vehicle you want beforehand

Having a good idea what kind of car you’re looking for well before walking onto a dealer lot will help manage expectations and direct your search. If you’re not sure what you’re looking for, you can use Navy Federal’s Car Buying Service, powered by TrueCar, to search from the comfort of your living room. Using online search options, pick the make and model of vehicle you are looking for. Diesel, electric, trucks, and SUVs, everything is included.

Select the features and accessories you want, and TrueCar will show you what others have paid for similar options.

Understand the extra costs of the vehicle you want

These ‘hidden’ costs can add up very quickly. Once you’ve decided on the type of vehicle you need, pay very close attention to the warranty options included, any extras available, and then spend some time doing research online. A few extra minutes can let an informed buyer know if their next dream car is a well-oiled machine, or a money-sucking mechanical nightmare just waiting to happen. There are thousands of reviews available on every conceivable type of vehicle. Just check out the best-rated models for the type you’re considering and make sure the value matches the price. A little bit higher sticker cost may be completely worth it for a car that runs without issues for years.

You also need a firm understanding of how much your insurance will cost. Is the car going to a safe, seasoned driver or your firstborn child who just turned 16? Those premiums can fluctuate wildly depending on who is operating the vehicle.

Don’t walk into a dealership (or venture out into the internet) unprepared. Follow these simple steps to dramatically improve any car-buying experience.

Good luck out there!

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