Southernmost
Federal Credit Union
P. O. Box 2250
Key West, FL 33045-2250
(305) 296-6568
|
SMFCU
NEWS - July 2004
Purchasing a new car this year????
"What you need to know to get the best deal"
So,
you have decided it is time for a new car.
For most of us its a rather scary thought.
After all, you have to deal with an entire
staff of professional car salesmen...all
them out to get as much of your money as
possible. The first thing we want you to
remember is we are here to help you.
We have all the tools you need to help you
get the best deal possible, including the
most recent Blue Book/NADA regardless of
whom you purchase the automobile from.
What
do you need to know before you set out to
purchase your new car? Well first of all
you need to know most dealer invoices,
yes I did say dealer invoices, have a 2
or 3% holdback that is usually for fleet
customers. Additionally, manufacturers
often time offer rebates and allowances.
Manufacturer rebates and holdback can often
times be a difference of $2000 to $3000.
Often times, dealers will settle for a
$1500-$2500 profit on the car...meaning you
will pay less than the invoice price. This
means you need to do a little research prior
to going to the dealer. You should know:
 |
Invoice value of the purchase vehicle
|
|
Amount of any manufacturer rebates on
the vehicle |
|
Your trade-in value |
Dealer
Invoice+Destination Charge+Options-Holdback=True
Dealer Cost
True
Dealer Cost+Taxes/Licensing-Rebate=Your on
the Road Cost
(Click
the word holdback to see a list of vehicle
holdback percentages)
Now
you have a good idea of what you should be
able to purchase the vehicle for. You now
need to be willing to shop around, and don't
forget to shop the internet. Many large
reputable dealerships have sites you can
purchase cars from...and they will even
deliver.
"Financing your new
vehicle"
|
Teaser rates
have always
been offered
to drive
more
business to
the
dealerships,
but often,
these offers
are not
beneficial
to everyone.
The
variations,
like
pricing, can
change from
dealership
to
dealership,
but knowing
what to look
for and
which
questions to
ask the
dealer will
help you
decide if 0%
is the best
deal for
you. Here
are a few of
the facts
and
restrictions
that often
apply:
|
Almost
perfect
credit
may be
needed
to
qualify
for
these
offers
|
|
You may
be
required
to give
up a
manufacturer's
rebate
|
|
It
usually
means
shorter
terms
and
often
large
monthly
payments
|
|
It's
usually
offered
on a
limited
number
of
models
|
|
You may
be
limited
to
dealer
stock
and not
be able
to
choose
the
exact
vehicle
you are
interested
in
purchasing
|
Consider the
example
below:
|
Financing
Comparison
-
Factory
vs.
Credit
Union |
|
|
Factory
Financing |
Credit
Union
Financing |
|
Term
of
Loan |
36
Month |
36
Month |
|
Loan
Rate |
0%
APR |
5.25%
APR |
|
Price
of
Car |
$25,000.00 |
$25,000.00 |
|
Down
Payment/Trade-In |
($
6,000.00) |
($
6,000.00) |
|
Negotiated
Rebate |
0.00 |
($2,000.00) |
|
Amount
of
Loan |
$19,000.00 |
$17,000.00 |
|
Monthly
Payment |
$527.77 |
$512.38 |
|
Total
Amount
Paid |
$19,000.00 |
$18,445.68 |
|
Savings
$552.34
*Example
Credit
Union
Rate |
Remember
you can call
us and get
"pre-approved"...meaning
no financing
hassles at
the
dealership!!!
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