When you need a car quickly, it’s easy to feel like you have to take the first deal that works. Maybe your car just broke down, you need a reliable vehicle for work, or you found a car you’re afraid someone else will buy.

But rushing can lead to expensive mistakes.

One of the best things you can do before you ever step onto a dealership lot is get preapproved with your credit union. A preapproval gives you a better idea of what you can afford and what your financing may look like. Most importantly, it puts an experienced loan officer in your corner to help advocate for you throughout the process.

 

If You Finance With the Dealership, Watch Out for “Yo-Yo Financing”

Many car buyers have never heard of this. Imagine finding a car, signing all the paperwork, getting the keys, and driving home thinking everything is finished.

Then, a few days later, the dealership calls. They tell you the original financing did not go through, and you need to come back and sign new paperwork.

The new deal may have a higher interest rate, a larger down payment, or different loan terms.

This is called “yo-yo financing.”

 

Before driving away, ask:

“Is my financing completely approved and final, or is it still waiting on lender approval?”

If the financing isn’t final, make sure you understand exactly what could happen if it isn’t approved.

You Can Avoid This Altogether By Getting Preapproved With Us First

Getting preapproved before you shop can take some of the pressure out of the dealership experience.

Instead of relying solely on the dealership to explain your financing options, you’ll already have a loan officer you can call with questions.

Think of your AlliedFCU loan officer as your car shopping guru. They can help you understand the numbers, answer questions about the financing, and advocate for you throughout the loan process so you don’t have to figure everything out on your own.

 

A Few More Mistakes to Avoid

• Not checking what you owe on your trade-in.
  If you owe $20,000 on your current vehicle but it’s only worth $15,000, you still have a $5,000 balance to deal with. That difference may be added to your new loan, which means you could start your new car loan already owing more than the new vehicle is worth. We want to help you understand the value of the vehicle you are buying compared with the price you are paying. We can also help you review your trade-in value and purchase price so you’re better prepared to negotiate with the dealership.

 

• Trusting a verbal promise from the dealership.
  If the dealership promises to repair something, replace a part, add an accessory, or complete other work after the sale, get it in writing. Ask for it to be included on the dealership’s “We Owe” form or other written agreement.

 

• Letting the salesperson rush you.
  You don’t have to make a decision just because someone tells you the deal is “only good today.” Take the time to look at the vehicle, review the numbers, check with your loan officer, and understand exactly what you’re signing. Never be afraid to walk away.

 

Shop for the Loan Before You Shop for the Car

Buying a car is a big financial decision, and you shouldn’t have to make it alone. Talk to our loan officers and let them walk you through the process. Car buying shouldn’t be stressful, and with a trusted advocate in your corner, it doesn’t have to be. Your purchase and financial position are as important to us as they are to you.

 

Before heading to the dealership, talk to Allied Federal Credit Union about getting preapproved. You’ll walk onto the lot knowing more about your financing and with an experienced loan officer in your pocket who can help answer questions and advocate for you along the way.

A little preparation before you shop can make a big difference once you’re sitting at the dealership desk.

Get preapproved with AlliedFCU first and shop with confidence.