SAVE LIKE JOE

I would like to introduce you to Joe. 

 

We created the story of Joe to show one of the biggest mistakes new car buyers can make – financing at the dealership.  I should preface that by saying this is a general statement and doesn’t apply to all dealers – if you have an established relationship with a dealer you’re ahead of the game, this is more for those who are walking into a dealership for the first time.  Even if you’ve done all your due diligence online and feel armed with enough information to buy that car, there are still some pitfalls you may not be aware of that can end up erasing all the work you’ve done to negotiate the best deal on the car itself.

To go a little deeper into the story you need to understand how dealers make money.  Most people believe it’s in the sale of the car, but the reality is that’s only part of where the profit comes from (if at all).  First rule of thumb - if you have a trade-in DON’T TELL THE DEALER THAT until AFTER you’ve negotiated the best deal on the price of the car – you can lose a lot of money if they factor that trade-in before you talk price.  There are also “backend” products that can create much more profit for the dealership than the actual sale of the car.  Things like extended warranties or even fabric protection can make a big dent in your wallet.  Couple that with higher interest rates than you could potentially get at the credit union and you’re talking big dollars for them and lost for you. Even those 0% financing deals can actually cost you money in the long run. All these things are negotiated in the “F&I” office.  

The F&I (Finance & Insurance) office is the dealership's last place where they make money before you drive off the lot in your shiny new wheels…and often where they make the MOST money.  If you don’t have financing already in place, they will try and “sell” it to you, often at an inflated interest rate.  In addition they will offer you extra products like GAP (Guaranteed Asset Protection) insurance, sealants, extended warranties, service contracts, etc.  I’m not saying these don’t have value, but sometimes the markup on these “extras” can be a bit extreme.  At Tropical Financial we also offer GAP insurance and mechanical breakdown insurance, but the cost is at a very competitive rate – remember we’re not-for-profit so our number one priority will always be you.

Your best option is to get pre-approved by TropicalFinancial before you go to the dealership, or if you're just starting the search process, you can save time driving around dealerships and use our concierge service Auto Nation Direct and avoid the F&I office altogher.

If by chance you’re reading this and think, “drats, I just financed my new car at the dealer!”  FEAR NOT – with our auto refinance programs you STILL can get the great rates from your credit union and save money…just like Joe!

^Amy