A Step-by-Step Guide to Car Buying

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Buying a car is a big decision, and it's important to do your research and understand the process before you start shopping. In this series of blog articles, we'll walk you through the steps of buying a car, from researching your needs to negotiating the price.

We'll cover topics such as:

  • How to determine your budget
  • Getting preapproved for a loan
  • How to get the most out of your auto loan
  • Leases vs. purchases
  • What happens after applying

5 Tips for Buying a New Car

Whether you’re buying a new vehicle or a pre-owned vehicle that’s new-to-you, the experience should feel rewarding. Unfortunately, many people find buying a new car to be stressful. Don’t let the negotiation process and fine print prevent you from enjoying your new set of wheels! Consider these tips the next time you’re car shopping.

1. Buy Before You Have to Buy

Try to avoid being forced to buy a new car because your current ride is beyond repair. When your situation seems desperate, you likely won't get the best deal. Begin browsing while your vehicle is in good shape so you can get the most for your trade-in. Note vehicles you're interested in and use the internet to research them more thoroughly.

2. Get Pre-Approved

Getting pre-approved for an auto loan is one of the best things you can do before heading to the dealership. A pre-approval gives you an idea of your buying power. Focus on vehicles within your approved amount to ensure a smooth purchase process. United Heritage Credit Union can often pre-approve you the same day you contact us. A pre-approval from UHCU will give you greater bargaining power and more freedom in your purchasing decisions. Our loan specialists will work with you every step of the way until you sign on the dotted line and drive away happy. Get pre-approved online or by giving us a call at 512.435.4444.

3. Know What You Want to Buy and Watch for Incentives

Most cars, trucks and SUVs have a range of trim levels, options and accessories. Take time to think about what features are most important to you and your family. Make a list of what you need in a vehicle versus your dream options. Is your family growing, would you like a vehicle that is eco-friendly, do you want better gas mileage or more power? Use your pre-approval amount to determine what you can afford that will best match your wish list. Get a price quote online and then shop around. Don't settle for the first quote you receive and search for manufacturer's rebates that make a good deal even better. You can even use the quoted price from one dealer as a bargaining chip at another.

Many automakers provide incentives in the form of cash back rebates for new vehicle purchases. Some incentives might be worth thousands of dollars off the list price of the vehicle; therefore, use them to your advantage. If you are torn between two similar cars from different manufacturers, an incentive could be the deciding factor.

4. Be Prepared with Your Vehicle Trade-In

In many instances, buyers will trade their old vehicle in for a new one. If you fall in that category, you should know exactly how much your trade-in vehicle is worth prior to going into a dealership or talking to an auto broker. You can find information about your vehicle's trade-in value utilizing used car price guides, such as Kelley Blue Book or J.D. Power. Generally, these guides will establish a trade-in amount somewhere close to the wholesale value of the vehicle. If the trade-in is in better condition and has lower mileage, it may be worth more. Remember to negotiate the trade-in allowance as well as the new vehicle purchase price.

It's important to be prepared. Consider the new car value and the trade-in as two separate negotiations. If the dealer or auto broker is not willing to take your trade-in at the value you know it is worth, you may want to shop elsewhere or consider selling your vehicle privately instead of trading it in.

5. Be Smart with Additional Add-Ons

Don't simply take the extended coverage offered at the dealership without understanding your alternative options. Compare extended coverage options prior to purchase. At UHCU, we offer Vehicle Service Contracts (VSC), Guaranteed Asset Protection (GAP), Credit Life, Involuntary Unemployment Disability and other plan options to meet your specific needs. These plans are normally offered at a lower price point compared to other retail pricing and they are designed to keep your investment protected. 

We hope these tips allow you to purchase a vehicle regret-free with a minimal amount of stress. The more prepared you are for buying a new car, the better you will fair. For more information about our auto loans and other related services, visit our Auto Loans page or call one of our loan specialists at 512.435.4444.

7 Steps for First-Time Car Buyers

Are you a first-time car buyer? Before heading to the dealership, check out these steps on how to best buy a car.

1. Determine What You Can Afford

You've made the decision to purchase a car; now it's time to figure out how much car you can afford. Realizing how the purchase of a vehicle will affect your overall budget is important. Immediate expenses will include the down payment, tax, title, registration and dealership documentation fee. You'll also want to account for ongoing expenses like auto insurance, maintenance and gas.

Once you've decided what's affordable, you should have a better idea of what kind of car you're in the market for. You may also be able to utilize a qualified co-signer to assist with your purchase. Check out UHCU's Auto Calculators to help you compare different options for your budget.

2. Secure UHCU Financing

If you're like most car buyers – first-time or otherwise – you won't be paying for your vehicle with cash, and that means you need a loan. A great first step in the financing process is to work with United Heritage to get pre-qualified.

Pre-qualification helps you negotiate more effectively and simplifies your experience at the dealership. If you have any questions about pre-qualification or are ready to start the pre-qualification process, visit our Auto Loans page or call 512.435.4444 to speak with a UHCU loan specialist.

Once you apply with UHCU, your loan specialist will help you understand your credit rating and how it impacts your purchase. Your loan specialist will also assist you with determining your estimated down payment, your monthly payment, the length of your loan and the interest rate.

Both the length of your loan and the interest rate will affect your overall cost. Shorter-term loans generally have lower interest rates and may save you money over the life of the loan. Longer terms make for lower monthly payments but will end up costing you more in interest.

3. Shop Around

Now that you've addressed the financial aspect of buying a car, it's time to start thinking seriously about what kind of car you'd like to get. Prioritize your wants and needs – while a convertible might be cool, is it going to be practical for you? How important are safety and reliability? What features could you not live without? Note vehicles you're interested in and use the internet to research them more thoroughly.

Next, test drive the cars you like. If you're buying a used car, a certified professional mechanic should inspect it. Once you've exercised due diligence, select your top choice as a well as a few alternate options.

4. Negotiate

While negotiating the price of a vehicle can add to an already intimidating first-time car purchase, doing so can ensure you end up with the best deal possible. Show up to the dealership prepared with your research and quotes. Negotiate one item at a time – often you'll want to focus on the purchase price – and be polite but stern. Keep emotions out of the equation and be prepared to walk away if necessary.

5. Protect Your Investment

Don't pay too much for the extras. United Heritage offers a full suite of protection products including vehicle service contracts, credit life, credit disability, unemployment insurance and guaranteed asset protection (GAP). These products are often less expensive when purchased directly through United Heritage.

6. Close the Deal

If you've made it to this point, congratulations – you're about to be a car owner! This is where your UHCU loan specialist's experience will come in handy. Your UHCU loan specialist works with hundreds of dealerships and private party sellers each month and has the knowledge to help you navigate the transaction with ease. He or she will work directly with the dealership's finance office to finalize the paperwork quickly.

Make sure you read over every part of the contract and ask questions before signing anything you don't understand. Your UHCU loan specialist has the expertise to assist with any questions or concerns at any point in the process.

7. Enjoy Your New Vehicle

When you drive off the lot in your new car, you can rest easy knowing you own a great first vehicle for a great price.

Boost Your Auto Buying Power - Get Pre-Qualified

We’ve mentioned before how getting pre-qualified for an auto loan can increase your buying power, but what does that mean exactly? We’ll outline how doing some planning before you shop can make a big difference when it comes to getting the best rates and payment plans no matter what type of loan you may need. Before you start shopping, you should get pre-qualified for a loan. Pre-qualification means that you would qualify for certain loan terms at a specific time with your chosen lender. This process allows you to be ready to make an offer when the right car is available.

How Much Can I Afford?

Getting pre-qualified for any loan will help you set your budget. Knowing what your spending power is before you shop can help eliminate disappointment before your heart is set on something out of your reach. You can easily start to weed out cars that are outside of your budget and minimize the guesswork of how much you might be able to spend. The salesperson you may work with can help guide you to a car that is best suited for your preset budget.

Know Costs Beforehand

Part of knowing your budget means knowing all the extras that may pop up before you buy. Getting a loan pre-qualified will give you more information about your loan before you shop for a car and help you know how best to spend your money. Being prepared can help you cut costs before you ever get to a showroom. With pre-qualification, you’ll know the length of your loan and what interest rate you may get.

Speed Up the Buying Process

With your loan documents and pre-qualification, you’ll save time in the buying process with pre-qualification. Once you find just the right car, you’ll already have your loan documentation started. United Heritage will already have much of the financial information needed to get a loan started as soon as you choose your new car. You may even have less paperwork to deal with during the purchasing process because you’ve already started the loan documentation by getting pre-qualified.

Like Cash

Because you’ll know your spending power before you ever deal with a salesperson, a pre-qualification will allow you to conduct a sale as though you were able to make a cash offer.

No Obligations

Getting pre-qualified from United Heritage means that you’ve done your homework and come prepared to buy, but it doesn’t mean that you have to make a purchase if the conditions aren’t just right for you. Our loan specialists are ready to answer any questions you might have during the entire process and are happy to help you make the right decision for your financial situation.

Clean Up Your Credit

During the pre-qualification process, United Heritage will check your credit history. If there are errors or if your credit score needs improvement, knowing this before you begin shopping can help stave off any disappointment after you’ve fallen in love with a car. This is a great time to work on improving your credit score or correcting any errors that may be on the report. Finding out your credit score should happen well before you are attempting to purchase a new vehicle.

Just like any loan process, there are a few things you need to do before you apply for loan pre-qualification. Because you are applying for credit, you may need to supply United Heritage with financial information such as pay stubs and previous tax documents. Applying is easily done online and can often be approved in less than an hour. Our loan specialists are ready to help you through each stage of the buying process and will guide you in getting the best loan for your situation. There are no upfront fees when applying for pre-qualification with United Heritage and we offer some of the most competitive rates available! We’ve also worked hard to expand our loan offerings at a time when many financial institutes are limiting borrowers.

Auto Loans 101: How to Navigate the Car Financing Process

Buying a car is exciting and can be overwhelming with choices. Should you buy new or used? Should you get the car from a dealership or via a third party? Should you lease or buy? Do you get those upgrades that you’ve been drooling over since you started car shopping? No matter your choice, UHCU has the right loan to help you drive that dream car home and to do so at a good price.

Understand Your Options
Just like the numerous choices you have when selecting a car, you have many options for auto loans. At UHCU, we offer loans for both new and used vehicles and can help you refinance your current loan from another lender if you are looking to lower your monthly payments or your desired term has changed. We can help you decide on a budget that best fits your needs.

Things That Impact Your Monthly Payment
Your monthly auto payment will depend mainly on three different factors among others; your loan amount, the length of your loan and the interest rate. The amount of the loan can vary depending on the amount of your down payment and any trade-in value or loan roll-over amount you may have on a previous vehicle. Your interest rate will last the entire time of the loan and your length of loan usually ranges from 36 to 72 months. Like other loans, the larger down payment you have to put towards the loan, the less you may have to finance. This can lead to significant monthly savings. These are great things to discuss with our loan specialists as they may have other insights on down payments depending on current interest rates.

UHCU vs. Dealership Rates
UHCU offers new car loans with very competitive low rates and we’ve made applying for a loan easier than ever. Generally, loans for new cars financed at the dealer offer longer repayment terms and can have lower interest rates than those for used vehicles but at UHCU we offer the same low rate for both. We also offer loans with no payment for 90 days. Our loan specialists can help you with the entire loan process and will guide you every step of the way.

For pre-owned vehicles, we still offer great rates and our same excellent loan services. If you choose a shorter term for a used car, your payment may be higher each month than on a new car. However, you might be making up savings with an overall lower price of the car.

Used Car? Find Out the History
You’ll want to make sure that you know the history of any used car that you may be interested in buying. A car history report can highlight any red flags such a major accidents and repairs that may bring the value of the car down. Make sure to do your homework on the car’s history before agreeing to buy. AutoCheck and CarFax are two services that help in researching a vehicle’s history.

Getting Pre-Qualified is Worth It
Getting pre-qualified for any loan is always a good path when buying on credit. Having a pre-qualification allows for peace  of mind when you decide to purchase a vehicle. You’ll have a good idea of what you can afford, your monthly payments and the type of loan that you’ll need. This eliminates additional stress that may come with overwhelming financial offers from the dealership. It is sometimes difficult to know what the real cost of an auto might be when the dealership combines trade-in value from another car, dealer fees and upgrades. You’ll have bargaining power with financing in place before you ever start shopping for the new car.

Don’t Forget About Insurance
Once you’ve decided on a car and have solidified your financing, it is important to make sure that you have the appropriate insurance coverage. At UHCU, we also offer insurance through UHCU Insurance Services. We can help you find the right policy for your car and your family. We’ll work with you to make sure you’re covered should an accident happen. You’ll get peace of mind knowing that you’re protected financially. Find out more about our insurance offerings and how we can best protect you on our website.

Refinance Tips
If you’ve decided that now is the right time to refinance an auto you financed through another lender, we can help! With interest rates staying low right now, you may be able to see significant savings with a new loan. If your credit has improved since purchasing your current vehicle, a new loan may also be a good bet for lowering monthly costs and getting a lower interest rate.

Make sure to check your current loan for any prepayment penalties. Occasionally, other financial institutions may charge you for paying off your loan early. As always, our loan specialists can walk you through the process and help you to decide your best financial choice.

Test Different Scenarios with a Loan Calculator
If you would like to estimate your loan payments, we offer an easy to use auto loan calculator on our website. With this, you can see how increasing your down payment or refinancing for a better rate can bring you more cash in your pocket each month.

Finalize Your Loan from Home
We’ve worked hard to make sure that getting a loan is easy and convenient for our members. A no obligation application can easily be completed online from the comfort of your couch. We also offer DocuSign which allows you to complete the loan process electronically without ever leaving the comfort and safety of home. UHCU offers quick closings on loans so that you can get on the road in your new vehicle as soon as possible.

At UHCU, we’ve got you covered and you’ll be ready to hit the road in no time!

How Much Car Can You Afford?

January is typically a slower car-buying month, which opens up the opportunity for potential savings if you decide to purchase a new or pre-owned vehicle soon. While acting fast can benefit you financially, it's still important to consider all of your options. By doing so, you can likely avoid some common car-buying pitfalls.

Before buying a car, it's important to know how much you can afford and how the purchase will impact your overall budget. Remember that car payments aren't the only expense that come with a vehicle – you'll also be paying for maintenance, gas and auto insurance.

A good rule of thumb is to keep your auto-related expenses at no more than 10 to 12 percent of your total income. For instance, if you make $3,000 a month, you'll want to make sure your car payment, insurance, maintenance and gas cost you no more than $300 to $360 a month.

Once you know how much you can afford to spend, you're ready to figure out your purchasing power. Check out UHCU's Auto Calculators to help you compare different options. Keep in mind that longer-term loans will decrease your monthly payment but increase the amount of interest you pay over the life of the loan.

After you've decided how much you're willing to spend, it's time to get pre-approved for an auto loan. When you get pre-approved for an auto loan, you'll have more bargaining power and more freedom in your purchasing decisions because you'll know exactly how much you can spend when you start shopping.

Several key factors play a role in the review of your application. While many lenders look at the same basic ratios and credit information, United Heritage offers the added benefit of personalized service and local loan specialists who are ready to help you navigate the loan application and vehicle purchase process.

United Heritage also offers products -- often at a lower price than dealership offerings -- that can help you protect your investment. Check with your loan specialist to see if a Vehicle Service Contract, Guaranteed Asset Protection and/or Credit Life and Disability make sense for you.

Visit our Auto Loans page to learn more about our auto loans and submit a free, convenient auto loan application online.
Don't forget to check out this blog post to get tips on buying a new car.

Get the Most Out of Your Auto Loan

Car loans are more straight-forward than some might think; you find a car you like and can reasonably afford, you finance the car and drive it off the lot. Sometimes this can happen in the span of just a few hours of your time and your signature. But there are some aspects of the car buying process that are helpful to consider before you whisk away in a bright, shiny new ride. Getting the most from your auto loan is easy with a few steps.

When purchasing a car, there are several things you want to consider. Outside of your monthly loan payment, there are things such as fuel, maintenance, registration fees and insurance premiums. 

Before you head out to sign on the dotted line, here are some tips to make sure that you get the most out of your auto loan.

Know Your Credit Score - Auto loans are can be fairly easy to secure even with a less than perfect credit score. Generally, a lower score simply means you'll be paying a higher loan rate. Usually, a dealership will offer to finance the loan for you, but UHCU always offers low, competitive rates and our loan specialists can help you get pre-approved quickly.

Extending the Life of the Loan - Getting a lower car payment is achievable by extending the life the loan. While this will generally lower your monthly costs, it extends the length of the loan. It is a good idea to consider how much you can afford to and how long you would like to be paying on your loan before you buy.

Down Payments – Down payments can be a great way of decreasing the overall amount of the loan that you take out and to decrease your monthly payment. But, it is also advantageous to consider the rate that you are given on the loan. If it is a rather low rate then you may want to consider keeping all or some of your down payment and financing a larger sum of the cost of the car.

Add-Ons - One of the most exciting things about buying a new automobile is the ability to customize everything from exterior color to the type of floor mats. Each of these opportunities to make your car more unique or customized to fit your needs can come with a higher price tag though. Consider that while it may be easier to have the windows tinted by the car dealership, there may be a local service that can do the same work at a significantly lower price. Extended warranties can be great solutions to auto care, especially if you plan on keeping the car for many years, but can be very pricey. UHCU can also help you consider the vehicle service contract that meets your needs.

If you've done your research and are ready to buy, we at UHCU are ready to help. Our interest rates remain low and, as always, we are ready to serve you. We offer one-stop shopping for your loans and have insurance offers available as well. We can also complete all documents remotely, while you’re in the comfort of your own home. Making the loan process not only easy, but safe as well. Our loan specialists will help you find the best loan for your needs and walk you through every step of the process. Contact us today via phone at 512.435.4444, 903.597.7484 or 800.531.2328 or the Auto Loans section of our website and we will help guide you in finding the loan that best fits your needs.

Leasing vs. Purchasing a Car: What You Should Know Before You Start Shopping

If you’ve been shopping for a new car or truck, it’s very likely that you’ve seen some great pricing on auto advertisements. Most feel as if they are geared towards buyers with great credit and are often targeted to those who are interested in leasing, not buying. If you are trying to decide between leasing or buying, we’ve pulled together some things to know before you head over to the dealership to be entranced by that new car smell.

What’s Your Long Term Plan?

The main consideration when deciding to lease or buy is to figure out what your long term plan is. Are you a person who wants to keep an automobile for an extended time or are you looking for a new car regularly? Both have their own set of advantages.

What to Know About Leasing
  • Leasing a new auto means that you won’t own the car, but will return it to the lease company at the end of the lease unless you decide to purchase it at that time. It also means that you’ll have a payment during the entire time of the lease and you’ll work with your leasing company for all financing. Did you know that UHCU offers access to leasing options as well?
  • Like leasing a house or an apartment, an auto lease will likely require an up-front payment and security deposit. This can make that first month of leasing pricey if you haven’t budgeted for that cost.
  • On the flip side of those upfront costs, monthly payments tend to be lower on leases than on outright purchases. Lease payments are essentially rental fees covering the cost of a car’s initial depreciation plus taxes.
  • Because leasing is limited to new autos, you’ll have access to the newest technology and safety features. You’ll also have fewer maintenance issues to worry about since the auto will have less wear and tear. Leasing companies often have maintenance contracts during the life of lease.
  • You may have mileage limitations during a lease. If you have a long commute or are a high-mileage user, this is something to consider and a good thing to discuss with one of our lending specialists.
  • After the lease period you won’t have to worry about selling the car. You’ll have the ease of simply returning the auto to the leasing company. If you need to end the lease early, you may have some fees. Understanding the terms for returning the car early may be helpful.
Buying Basics
  • You’ll have your choice of financing options. Financing through United Heritage gives you access to some of the lowest loan rates available, our excellent customer service and all the many benefits of membership. Our loan specialists can help you get pre-qualified before shopping so you’ll have buying power the minute you step foot into the dealership.
  • The car may come with a maintenance warranty, but it may be limited by time, mileage and specific parts of the car. In the long run, you’ll have to cover any maintenance costs outside of that warranty.
  • You’ll own the car at the end of the loan. You also may have ability to pay off a loan early if your finances allow for that.
  • Customizing your new car is completely up to you. Some leases don’t allow for customization because the dealership wants the car to be easily resold after you return it. Ownership allows for you to make your car your own in any way you want.
The Bottom Line

No matter how you decide to finance your next car, United Heritage is always here to help you make the most sound financial decisions. We’ve got you covered for low interest financing, a quick and easy loan process, leasing options and all your auto insurance needs.

What Happens Next After You Apply for an Auto Loan?

The loan process can seem a little mysterious to potential borrowers; you research loan rates, study different lenders and their loan principles, send in an application and wait for approval. But, what happens behind the scenes once you send in the application? How does a lender decide who gets a loan or who doesn’t? How are interest rate offers determined? Before you set off to buy that new car or refinance an existing loan, here are some things about the loan process that might be helpful.
Credit Check
Loan applications, whether it’s an auto loan or personal loan generally call for personal information such as name, birthdate and social security number.  This information is used to check a credit score and your creditworthiness.  An excellent score generally gets you loan offers of lower interest rates and little, if any, required down payment.  Borrowers with less than perfect credit may qualify, but at higher rates, or need a down payment. 
If you are unsure of your credit score, it’s recommended that you check your credit history before applying for a loan. The three major credit reporting agencies, TransUnion, Equifax and Experian each allow borrowers to obtain a free copy of their credit report once a year. Doing this will allow you to check for inaccuracies within your credit history and report them if necessary. For more information on how to order your credit report online, visit the Federal Trade Commission website here
Your credit score is determined by several factors: the number and types of credit you have such as auto loans, personal loans, credit cards or a mortgage; the amounts you owe on each of those lines of credits, the length of your credit history, your payment history and the number and frequency of credit inquiries. Checking your own credit via the Annual Credit Report will not harm your credit score, but applying for multiple loans in a short amount of time can negatively impact your credit score. Because of this, it’s important to make sure you are ready to commit to a loan before applying. 
Underwriting is the process of the lender verifying the information you’ve provided on your application. The underwriter will look at the value of the car you wish to buy, your debt-to-income ratio, or the amount you owe monthly on loans and housing costs compared to your gross monthly income, employment history, credit score and amount of credit you may already have available. Stability factors such as employment, residence history and comparable credit history with other lenders is also taken into account. 
Loan Offer
Once your credit has been reviewed and the application has gone through the underwriting process, a loan offer will either be extended to you or the application will be declined. Each application is unique and depending on your particular situation, a down payment may be required. While having a down payment isn’t always necessary, it can lower the monthly payment or allow for better terms on your loan.
While it may seem as though there are a lot of steps in the process of getting a loan approved, most loans are pre-qualified within a few hours, so you won’t have delays if you’ve already found your dream car. If you're still searching, that's okay! You can get prequalified and know your budget before visiting the dealership. If you already have the car of your dreams but are looking for better terms, we can review your application to refinance your existing loan too! Our loan specialists are always prepared to help you with any questions you may have about the loan process.  We strive to make sure that your loan process is quick and easy.  Contact us today at 512.434.4444 to get on your way to driving your new car!