Three Separate Transactions
It is understandable that buyers get anxious and confused when
negotiating a new vehicle purchase. Understanding one fact will
help to alleviate those feelings: buying vehicles is not a single
transaction; it actually is three.
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Step One: Negotiate a fair purchase price
for the vehicle you want to buy. AA Credit Union's online pricing
service, CUDL
AutoSMART, provides Manufacturer's Suggested Retail Prices
(MSRP), and invoice pricing for new vehicles. You should always
negotiate UP from manufacturer invoice prices and not DOWN from
MSRPs. Paying no more than three percent over manufacturer invoice
is generally considered acceptable. You get a fair price and
dealers get a fair profit.
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Step Two: Negotiate how much trade-in credit
you will get for your old car. The amount of trade-in credit
should have no bearing on the purchase price of your new car.
They are completely separate values. Discussing them in relation
to each other could result in your paying more for your new
car than you should and getting less for your trade-in than
you should. Don't mix them! Be sure to read Your
Old Car for tips on getting the most value for your trade-in.
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Step Three: Arrange your financing. The third
and final step of the vehicle purchase process can be the most
risky. Consumers often pay more for financing than is necessary.
The interest rate charged by most lenders is generally based
on consumers' Beacon Credit scores. Consumers with "good" credit
histories (no bankruptcies, not charged off debts, no collection
accounts, and no late payments) pay lower interest rates than
consumers with "bad" credit histories. Be sure to read Financing
Your Vehicle before you negotiate financing. Contact any
AA Credit Union Loan Officer to get pre-approved before visiting
dealerships or apply
online. We will compare their financing to ours. If their
offer is better than ours, we will tell you. Our goal is to
save you as much money as is possible!
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