If you’re in the market for a vehicle, the number of questions to consider may seem a little mind-boggling.  Should I buy new or pre-owned?  Does this come in leather?  Do I really need third-row seating?  How many miles per gallon does it average?  And most important of all, how much will it cost?

Take a deep breath—DCCU is here to help alleviate some of your car buying anxieties.  With these 10 tips, you’ll be ready to get behind the wheel of your next ride in no time.

1. Determine your budget
Determining how much money you’re prepared to spend overall and per month are incredibly important when car shopping.  Sure, you might have the income and credit score to qualify for a brand new sports car, but that doesn’t mean it’s the most financially sound decision.  You’ll need to sit down and figure out what makes the most sense financially.  Some things to consider in the total cost of your vehicle are interest and payment, auto insurance, gas, maintenance and repairs, registration costs, and property taxes, just to name a few. 

After all, your car is likely the largest payment you’ll have each month after your mortgage or rent, so you’ll need to be sure you aren’t paying more than you can afford.  Setting a budget ahead of time will help you determine which cars fall into your price range, and you can shop accordingly.

2. Do your research
With so much information available at your fingertips, research may be the easiest, but most overwhelming, part of your car buying journey.  First, you’ll need to determine which vehicle best suits your specific needs.  Do you need something fuel-efficient to get you to and from work, or is your biggest concern making sure there’s enough space to cart your kids from ball practice to ballet?  Do you need something new or is a pre-owned vehicle the better fit?  Answering these questions and finding a car that fits your needs may also save you time at the dealership.

3. Be familiar with APR
Regardless of your knowledge about the auto industry, you’ll want to be familiar with APR, or annual percentage rate.  Not to be confused with the overall interest rate, your APR accounts for all interest charges in addition to any fees charged by the dealership and is expressed as a percentage.  This rate varies depending on the lender and can make a difference in the amount you end up paying each month for your vehicle.

4. Know your credit score
It’s a good idea to make sure you know your credit score beforehand.  This way, you’ll have a better idea of what interest rate and loan terms you may qualify for, and can help you avoid being blindsided by the rate and payment you are presented. 

5. Get Pre-Approved
It’s a good idea to get preapproved prior to your visit to the dealership.  That way, you’ll already know what interest rate you qualify for as well as the total dollar amount you’ve been approved for.  It may be beneficial to shop rates at a few different lenders to ensure you get the most competitive rate and payment.  Being armed with this information when you visit the dealership will help you make the most informed purchasing decision. 

6. Determine what extras and add-ons you need beforehand
You’re already aware that you need auto insurance to keep your vehicle on the road, but what about GAP (Guaranteed Asset Protection)? GAP protects you if your car is damaged beyond repair, stolen, or declared a total loss, by paying off the remainder of your loan amount that insurance may not cover.  You’ll need to determine if this product is a good fit for you and your investment.

What about Mechanical Repair Coverage (MRC)?  It is difficult to anticipate vehicle repairs and maintenance, and MRC is a product that helps pay for repairs on your vehicle to help keep your car on the road.  Determining which of these products (Member Protection Program), if any, is right for you ahead of time will help prevent you from choosing unnecessary add-ons while at the dealership.

7. Know the value of your trade-in
If you are going to be trading a vehicle when purchasing a car, it’s vital that you value your trade before getting a professional appraisal at the dealership.  This way, you can have a realistic estimate of your vehicle’s value.  We recommend utilizing Kelley Blue Book or the NADA to determine the current value of your trade.

8. Pay in cash or make a down payment
The best way to save money in financing is to pay cash for your vehicle outright.  This way, you avoid all interest charges.  For most people, however, paying cash for a vehicle simply isn’t an option.  If you want to shorten the length of your loan term while lowering your monthly payment at the same time, making a down payment could be a great benefit. 

9. Consider paying your taxes, tags, and fees in cash
Another way to save yourself money is to consider paying cash for your taxes, tags, and fees.  Depending on the cost of the vehicle, this could be hundreds of dollars in addition to what you’re already paying. 

10. If you already have a car, refinancing may be an option
Refinancing—which is the process of taking on a new loan to pay off the balance of your existing one—has the potential to both lower your monthly payment and APR.  When weighing the pros and cons of refinancing, keep local financial institutions and credit unions in mind.  Here at DCCU, our members save $1,083* over the life of the loan when refinancing their non-DCCU auto loan with us. 

Purchasing or refinancing a vehicle may be a big financial decision, but it doesn’t have to be stressful.  At DuPont Community Credit Union, we understand your needs and want to help you achieve your financial goals.  To find out more about the auto loan products we currently offer please click here.

*Estimated savings is based on the average interest savings based on DCCU’s historical refinanced auto principal balance, average interest rate of previous non-DCCU auto loan, and average loan life of 29 months. Actual savings may vary. Rates quoted assume excellent borrower credit history. New vehicle payment example of 1.49% APR, max 80% LTV-36 monthly payments of approximately $28.46 per $1,000 borrowed. Used vehicle payment example at 1.99% APR, max 80% LTV-36 monthly payments of approximately $28.69 per $1,000 borrowed for 2014 and newer vehicles.