Things to consider when buying a NEW car
How do I know if I am getting a good deal?
Be sure to do your homework before purchasing a new car. There are several independent resources that will give you reviews, costs, option upgrades, and model comparisons. Review sites such as www.edmunds.com and www.NADA.com to research the cars you are considering. These sites will provide unbiased information and pricing for the cars you select.
What is the buying process when buying from a dealer?
When buying a new car from a dealership, the process is relatively quick and easy. It’s always a good idea to get a pre-approved auto loan from the credit union first. If you don’t, avoid rushing into dealer financing and check with Genisys. Taking the time to get the best financing can save big dollars in the long run. Once you have found the perfect car for you and your budget, and the dealer submits all pertinent information for financing, it will typically take us less than one (1) hour to return the approval back to the dealer. This is assuming no additional information is needed from you such as proof of income or co-signer information. If you’ve been pre-approved before shopping, you can be ready with your loan when you’re ready to buy your vehicle. When the dealer receives the approval they will need a couple things from you such as proof of insurance and any monies such as title, tax, plates, and add on products that are not being rolled into the loan. Next, the car will be prepped for delivery to you.
What is the process involved to place a lien?
When you borrow money to buy a car, the lender will require a lien on the title of a vehicle. This lien establishes the lender’s rights to the vehicle as collateral for the loan in the event payments are not made according to the terms of the loan contract. When a new car is purchased at a dealership, there is nothing extra for you to do. The dealer will handle the placement of the lien with the lender.
What is GAP and when do I need it?
GAP stands for Guaranteed Asset Protection. This insurance covers the ‘gap’ or the difference between what is owed on the car and what the car is worth should you have an accident which causes the insurance company to “total” your car. This means they will write you a check for the determined value of your vehicle. Without GAP insurance, you may end up having to continue making loan payments on a car you can’t even drive.
For example, suppose that you finance a new vehicle, and two years later you have an accident that results in a total loss. The car has decreased in value. If you still owe $20,000 for a car that is now only worth $15,000, you still owe the lender a ‘gap’ of $5,000. GAP insurance will pay for that difference. The cost of a GAP policy is generally a few hundred dollars, and can be added into the loan amount. Genisys Credit Union offers affordable GAP policies when you finance with us. Talk to a Genisys loan representative to get more information and be sure to include this in your financing option comparisons.
Is getting an Extended Warranty a good thing?
This is not a cut and dry answer. Extended warranties can be beneficial and possibly reduce your expenses down the road if your car ends up having expensive mechanical issues. Financially speaking, the cost and coverage of extended warranties can vary greatly. If you think an extended warranty is a potentially good option for you, be sure to check with Genisys to compare our coverage options and cost to dealer extended warranty packages. Often, the credit union option is less expensive. If you decide not to get an extended warranty, it is financially wise to make sure you have or are building funds in savings in case you do have repairs beyond your original warranty.
More Common Car Buying FAQs
- Do I need a down payment or can I get 100% financing to buy a car?
- What things should be considered when buying a NEW car?
- What things should be considered when buying a USED car?
- Can I refinance a car loan I have with another bank?
- Should I lease or finance and buy my car?
- What kind of vehicles will Genisys Credit Union finance?
- Do I need to have great credit to get a car loan?
- Do I need Credit Life and Disability Insurance?
- What other costs should I consider when budgeting for a car?
- What are the insurance requirements for an auto loan?