Pay Attention to the Dealer's Terms
Once you’ve picked the make and model of the car you want, you’ll be invited to step inside an office in the dealer’s finance & insurance department to settle on a purchase price and hash out financing. Use your pre-qualified loan from the bank or credit union as a way to gauge the loan that the dealer is offering you.
Beware of financing special offers and extras. Dealers may try to sell you manufacturers’ specials or financing options with little or no value aside from widening their own profit margin. Don’t feel pressured into buying anything you don’t want or need just because a sales rep says it’s a good deal. Such extras to watch out for include:
- Credit Insurance: Pays off your loan should you die or become disabled. Federal laws don’t require it but state regulations may, or you may already be covered through your auto insurance, according to the Federal Trade Commission’s Consumer Protection division’s car buying tip sheet. Check with your state insurance commissioner or consumer protection agency to find out what’s required where you live.
- Guaranteed Auto Protection: Pays the difference between your car’s cash value and what you still owe on a loan should the vehicle be stolen or totaled. Dealers sell it, but so do banks and credit unions, often for a lot less. Oregon Pioneer Federal Credit Union, for example, charges $175. Area dealers are charging two to three times that.
| Do Your Math, Don't Get Duped |
