GFA Federal Credit Union

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  • Nov 30, 2020

Shopping for a vehicle? It’s not just about the price!

Shopping for your next car, truck, SUV or minivan? One thing is for sure; we’re all looking for the best deal. And we’re inundated with dealer advertising. While most of the advertising is focused on price, many car shoppers make the mistake thinking the lowest price equals the best deal. However, this is often far from true.

Today, many buyers are using the Internet to conduct their research and narrow down their selection of vehicles and dealers before venturing out dealer to dealer, lot to lot, and salesperson to salesperson.

As you know, there are a lot of web and mobile-friendly sites to assist you in your search. Of course there are the dealer websites, displaying new & used vehicle inventory, location & hours, etc. Then there are the third-party sites like CarGurus, CarFax, and Autotrader which also list dealer inventories. Keep in mind, these sites are all funded by the dealers, so the vehicles you see and the order in which they appear is mostly determined by how much each dealer pays that site on a monthly basis.

Then there are the online pricing services like (also dealer supported), which enables dealers to attract buyers in a reverse auction setting. As you probably know; this approach was taught to us by sites such as (in the mortgage world) and (in the travel world).

However, there is a BIG difference between booking a hotel room on Priceline and buying a vehicle. When you book a hotel, the transaction is completed before you arrive, and you generally know what you are getting. Whereas, when you go to look at cars, particularly used cars, there’s a wide range of features, age, mileage, and condition. And you really need to test-drive the new or used car to ensure it will meet your needs. That’s assuming the dealer even has the vehicle you priced online. From experience we know that many of these “great deals” are not so great. Often we hear – “that vehicle’s been sold”, “that price included rebates you’re not entitled to”, “that price requires dealer financing”, etc.

And, unlike the hotel room, when you arrive at a dealer with an online price quote, the transaction is just starting. You see, there are several profit centers in an automobile transaction, with price often being the least area of profit. That is why we help buyers focus on TOTAL COST. Here’s the formula:

minus trade (actual cash value)
plus dealer fees
plus finance rate & fees
plus after-market sales
plus extended warranty & protection products

What we often say to members is “Who cares if a dealer is willing to sell you the vehicle for $500 less than another dealer if they give $1,000 less for your trade? That’s just one example where lowest price doesn’t mean the best deal.” And that’s where the credit union’s Auto Advisor comes in. Our job is to ensure that you get the best overall deal on a vehicle that meets your particular needs and budget. That’s why we look at each part of the transaction before selecting the dealer to visit with the member, or endorsing the deal. And we will recommend a particular dealer only when we’re confident they have the vehicle(s) that meets your particular needs and budget, so you’re not wasting countless hours.

And because our Auto Advisor does the legwork for you, the average member is driving their next new or used vehicle within 72 hours of our first conversation and, 90% of the time, the vehicle is purchased on the first dealer visit accompanied by the Auto Advisor. This is not rocket science! Our goal is simply to save members time and money, while eliminating the time and aggravation typically associated with car shopping. It’s not easy, but it’s what we do!

There are several other costs which buyers need to consider when purchasing a vehicle. Beyond price, buyers should be aware of insurance rates, sales tax, and state & local fees. Plus any balance due on the trade --- Is there equity in the trade or do you owe more than the trade is worth? And then there’s the financing – What are the pro’s & con’s of leasing? What’s the rate? What about those low rate finance offers? Do I need GAP insurance, and how much is it? Etc…

The bottom line: It’s not just about the price! This is a big transaction with a lot of moving parts. So be sure to speak with your credit union and Auto Advisor to ensure you’re equipped with the knowledge and tools to make a smart buying decision!

If you're in the marketing for a new vehichle, or soon will be, fill out the contact form on the Auto Advisors page.

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