Posts Tagged 'dealership'

Detroit News: Used car prices rise with demand

The Detroit News reports that with a shrinking supply and a rising demand, used vehicle prices are higher than they have been:

Supply is down because “cash for clunkers” required old vehicles to be destroyed, rather than allowing them to be resold. In addition, fewer leased vehicles are being turned in and available for sale because automakers all but abandoned leasing during the industry collapse of 2008 and 2009.

Demand, meanwhile, is up as some cautious consumers choose to buy used cars, rather than expensive new ones.

As demand goes up, so do the prices – as much as 14% for SUVs and 16% for luxury cars, the Detroit News reports.

American 1’s GAP more affordable

Jessee Frey-Cochrane

People say good things come in threes, but Jessee Frey-Cochrane found out that bad luck can come in twos.

In the span of one year, Jessee had to use American 1’s Guaranteed Asset Protection (GAP) twice on different vehicles.

In August 2006, Jessee’s “summer vehicle,” a 1995 Pontiac Bonneville in great condition, suffered from a sunroof seal leak and was wrecked by mold damage. Her insurance company ruled the damage as a total loss. The next year, in April 2007, her 2004 Ford Freestar caught fire after an electronic harness defect, leading to another ruined vehicle.

Thanks to her GAP coverage, the difference between what Jessee owed on her vehicles and what the insurance company offered her in settlement disappeared.

“It really paid for itself,” Jessee, an American 1 member since 1998, says, “especially after I used the $1,000 GAP Advantage towards my next vehicle.”

Jessee, a Grass Lake resident, knew about GAP coverage as a licensed insurance agent, and shopped around for the best deal. She didn’t find it at a typical dealership, where the GAP price is based on the vehicle’s cost – and can be double or triple the price.

“American 1’s GAP was a flat rate,” she says. “So now I tell people to go to a local credit union – it’s cheaper than the dealership.”

It could just be bad luck that two of her vehicles were totaled within a year. American 1’s GAP coverage, however, helped Jessee balance the score.

“I won’t purchase a vehicle without GAP ever,” she says.

Tips when using SimpleLoan checks

giantcarlot

Let’s say you get pre-approved for an auto loan with American 1. You’ve got your amount all set, we’ve cut you a SimpleLoan check, and you have an idea of what kind of vehicle you want.

Now what?

Since we don’t want to send you out without the proper preperation, here are some tips to keep in mind when shopping for a vehicle with your SimpleLoan check.

First, do some research on what you want to buy. If you have a vehicle in mind, see what it’s available for in the area. Do you want used? New? Hit the auto classified section of your newspaper to see what’s selling for how much. This kind of information is extremely powerful later in the process.

If you have a trade-in vehicle, do some research to see how much you can get for it. Sites like NADA and Kelly Blue Book aren’t always 100% accurate, so ask around. And check out sites like eBay Motors and Auto Trader to see how much you vehicle is going for in your area.

Negotiate for your vehicle without letting the dealership know you have a SimpleLoan check. You should first negotiate the price of your vehicle with all the options. Once you have a price you’re willing to pay, then you can work on payments and whatever else with us at the credit union.

Pretty soon, the conversation will turn to financing. Tell the dealership you have your financing taken care of. Let them know that you are writing a check, and that you don’t need any help finding financing. The secret is that you’ve already been pre-approved with American 1, and you’re armed with your SimpleLoan check.

Don’t let them know your pre-approval amount. If the dealerships knows that amount, they’re more likely to add extras to drive up the price to your limit. This also gives you walk-away power. Remember – with that SimpleLoan check and a pre-approval amount, you’ve got the negotiating power. Don’t be afraid to walk away if you don’t get the deal you want.

When you know the price, and you’re set to finance, then you can start talking about your trade-in vehicle. By now you’ll know what your trade-in vehicle is worth. Don’t be afraid to negotiate on your trade-in vehicle’s worth to get the maximum value.

Since you’ve settled on the vehicle you want, the price you can afford, the financing is set to go, and you’re getting a decent deal on your trade-in vehicle, you can write your SimpleLoan check right then and there.

For more auto buying tips, visit our Auto Loan Experts page, or browse through other articles here on our blog.

MSN: GAP coverage is a good idea

MSN Money’s Liz Pulliam Weston, in “Why a wrecked car could cost you,” lays out why it’s good to have Guaranteed Asset Protection (GAP) coverage on your auto loan.

Because of dropping vehicle values, what you owe on your car could be more than what an insurance company will pay you for a wrecked or stolen vehicle:

Even if you made a big down payment, you still could be upside down on your loan or lease because resale values have plummeted so quickly.

Volatility in resale prices started last year, when gas prices spiked, hurting sales and values of bigger, gas-guzzling cars, said James Clark, the general manager for ALG, which publishes the Automotive Lease Guide.

Weston also notes that getting GAP from the dealership is “probably the most expensive choice.”

We have numerous stories about how GAP has helped members regain their vehicle investment. In the end, it’s affordable protection that can help cover the cost of your auto loan if the unthinkable happens.

It was a dark and stormy car sale

Spring Car Sale - Dave secures the tent

Last weekend’s spring vehicle sale, held April 24 and 25 at Sears in Jackson, was super-successful. We kept $1 million in the community, and almost 100 members were able to finance quality vehicles from six local dealerships.

But then Saturday, the storms hit.

Dave Lewis (above), our ATM specialist, worked with several other employees to secure our tents before the flash thunderstorms hit.

Spring Car Sale - after the storm

We evacuated the tents twice, with employees and shoppers heading into Sears to stay dry (above).

All the action was captured in photos, and you can see them at our Flickr photo gallery.

Thanks to the entire community for supporting the sale. Everyone who financed a vehicle that weekend took advantage of our big loan rebate – plus a trip to our famous cash machine.

See you at our next sale in September!

Learn the secrets of car dealerships

Learn the way of the car salesperson

The world of auto sales is like another planet: so many secrets and plans and methods. Purchasing a vehicle involves patience, stamina, and a bit of self-education.

Thankfully, we can help with the last one.

Over at the Consumerist, you can learn about the “four squares” method of making deals at a car lot, which involves directing your attention away from things like the actual price of the vehicle you’re buying or financing. As with most Consumerist posts, a lot can be learned from the comments section, so be sure to check out the readers’ stories at the end of the article.

One of the posters pointed to Car Buying Tips, an encyclopedia of car dealer trade secrets and tactics. For some good fun, check out the mail the site gets from angry dealers.

The most important lessons I caught were (a) get pre-approved at a credit union to know how much you can/should spend, (b) haggle over the purchase price before anything else (trade-in, monthly payment, options) is talked about, and (c) do your research. A well-informed buyer is the most powerful person on a car lot.

Dave, a reader over at the Get Rich Slowly blog, offers some advice from working at a dealership, too. Here’s a realistic one:

Do not try to bluff or BS anyone in the dealership — they are a lot better at it than you are, and they do it far more often.

Our Member Relations department is happy to answer any questions you have about this stuff. Working with dealers as much as we do, we’ve learned a thing or two. We even have a guy, Dale, in the department that used to sell cars. He has some fun stories to tell.


American 1 Federal Credit Union