Credit Union Lending

There are several reasons why you should choose credit union lending over dealer financing.

• Ancillary products such as GAP insurance and extended warranty options.

GAP (Guaranteed Asset Protection) Insurance protects you from financial loss in the event your vehicle is totaled or stolen. GAP pays the difference between the loan balance and what your insurance company will cover, which is usually low blue book. Credit unions offer GAP insurance at low rates, some start as low as $295. Dealers, on the other hand, can charge anywhere upwards of $500.

Extended warranty options, also known as MBI or Mechanical Breakdown Insurance, are insurance policies that insure your new or used vehicle against mechanical failure. With MBI policies, you can usually choose any mechanic in the U.S. to service your vehicle. MBI varies greatly depending on coverage desired, model, and age of the vehicle. On average, credit unions can offer policies as low as $800 compared to the average dealers cost, which can range between $1500 to $3500.

By choosing to finance through your local credit union, you'll save when you purchase their insurance products versus purchasing the same policies with a dealer.

• Better Rates

Credit unions usually offer better rates than dealer financing, especially for members with A+ credit. In addition, most credit unions offer rate discounts, especially relationship-type discounts. For example, the more services you have on your account (payroll direct deposit, other loans, savings and checking accounts, etc), you'll be offered a loyalty discount. Most credit unions have gone green and offer hybrid rate discounts.

Credit unions also approve based on more than your FICO score by considering your relationship with them, your credit history, debt-to-income ratio, your employment history, etc.

• Open-ended lending

Most credit unions offer open-ended lending, wherein you're able to change the payment of the loan. This would happen if you were to make a lump sum payment towards the principal. Or you can add an aftermarket product to the amount financed after you've purchased the car, as long as the amount financed is within the credit union's lending guidelines.

• Better member service

After you've financed your vehicle, you can trust that your credit union will provide you with the best member service. In addition, you won't have to worry about your loan being sold to another or several other financial institutions.

For more questions about credit unions, click on the links below:

• What is a credit union?
• Who are Auto Expert’s partner credit unions?
• How do I join a credit union?

For questions about what your credit union offers, contact them directly or call us at 1-800-359-4567 or visit us online at http://www.autoexpertonline.com/.

Arrowhead CU Selects Auto Expert for Auto Locating & Buying Services

(Riverside, Calif.) April 26, 2010 – Auto Expert recently announced that it has been selected by San Bernardino-based Arrowhead Credit Union to provide auto locating and buying services for its 154,000 members.

Arrowhead, with assets of $852 million, has long offered auto loans, but this is the first time it is offering members an auto locating service. Rather than take on the task themselves, Arrowhead opted to partner with Auto Expert.

“The key factor for Arrowhead CU in selecting Auto Expert is the easy, hassle-free shopping experience for new and used cars that they can provide to our members,” said Gene Shabinaw, senior vice president, Lending, Arrowhead.

“Auto Expert has an excellent reputation in our local market and has developed the necessary relationships with dealerships. That translates into our members saving money on their car purchase. When you combine that with a low-rate auto loan from Arrowhead, it makes a great partnership,” Shabinaw added.

“We are excited to partner with Arrowhead,” said Chris Andrus, Auto Expert president. “Both organizations have a sharp focus on customer service, so working together to help members makes a lot of sense. The average member savings through Auto Expert is more than $2,000. In today’s economy, that might make the difference in a member’s decision about purchasing a car right now.”

Auto Expert provides auto-locating services to 15 credit unions, collectively serving more than 703,980 members and totaling more than $6.75 billion in combined assets. Auto Expert is a subsidiary of Altura Credit Union. For more information about Auto Expert, visit http://www.autoexpertonline.com/ or call 1.800.359.4567.

Talking the Talk – Understanding Dealer Terms

Buying a new car can be a daunting task and it can become frustrating when you don’t understand the terms dealers will commonly use. This article is to assist first-time buyers decipher common language used when buying a car; however, anyone, first-time or fifth-time buying a car, can benefit from this article for a better understanding of common terms and phrases. Below is a list of glossary of terms, common questions and phrases regarding purchasing a vehicle.

Pricing

What is MSRP?

Manufactured Suggested Retail Price (MSRP) is sometimes called the “Sticker Price” and means just that – suggested selling price for the retailer. MSRP is determined by the market value of the vehicle and does not include taxes, registration, transportations and other miscellaneous fees (all which could add 10-15% to the final cost).

What is invoice price?

The invoice price of a car is the “price” the dealership paid for the vehicle. Similar to MSRP, the invoice price does not include taxes, registration, transportation or other miscellaneous fees.

What’s the difference between MSRP and invoice prices?

MSRP is the price after the invoice price has been marked up to allow the dealership to make a profit on the vehicle.

How can a dealer go “below” invoice?

Most dealers can offer pricing that is below invoice because they themselves receive manufacturer’s rebates, incentives and volume discounts to offset their discounts they pass on to the consumer.

What is a consumer rebate?

Rebates are discounts that are passed to the consumer by the manufacturer. Rebates are applied after taxes and license fees.

What is a manufacturer rebate?

A rebate that is similar to the consumer rebate, however, these rebates are passed to the dealership.

What does it mean when my vehicle depreciates?

Depreciation is the vehicle’s decline in value over a period of time. Once a vehicle is sold, driven and used, the value of the vehicle automatically declines.

What is a transportation fee?

A transportation fee is charged by all dealers and it’s the cost of transporting the vehicle from the manufacturer’s location to the dealership.

What is tax and license?

Like all purchases, all products are subject to state and federal taxes, vehicles are no exception. License fees are the cost of the dealership licensing the vehicle with the new owner’s information.

Lending

What is APR?

Annual Percentage Rate (APR) is the rate your paying for your loan and is charged by your financial institution.

What is a loan term?

A loan term is the amount of time, usually determined in months, you’re paying for your auto loan. The most common terms are 48 to 60 months. Most institutions will increase the rate if the term is 72 to 84 months and it’s rare for an institution to lend longer than 84 months.

What is a lease?

A lease is like renting the vehicle and the payments are usually much lower than purchasing the vehicle with an auto loan. However, there are more fees involved and you don’t own the vehicle at the end of the term. After a lease has ended, the consumer will have to pay a residual – the amount you owe at the end of the lease. Car lease residuals are a statement of the expected depreciation of a vehicle's value over the life of a lease. The value can be affected by a number of factors, including expected average annual mileage, number of months in the lease, make/model vehicle, resale history, predicted future supply and demand, rise/fall in gas prices, and anticipated future economic conditions. In short, lease residuals amount to nothing more than an educated guess. (http://www.leaseguide.com/Articles/residualvalues.htm)

What is GAP protection?

GAP insurance or GAP protection is insurance coverage to pay for the vehicle’s loan in the event the vehicle is stolen or totaled in an accident. Because a vehicle depreciates automatically after you’ve purchased it, the value of the vehicle is lower than the amount of the loan. All insurance companies will only cover the value of the vehicle, leaving the consumer responsible for the difference on the loan. GAP insurance will cover that “gap” between the value of the vehicle and the loan amount. Most financial institutions and dealerships offer this insurance; most credit unions offer GAP policies at affordable prices compared to dealerships.

Gas Card Sweepstakes - Enter to Win!

Become our fan on Facebook and you can enter to win a full tank of gas*!

It's simple, all of our fans will be entered into a sweepstakes to win gas on Auto Expert! 

All you have to do is fan us at www.facebook.com/autoexpertsocal.

But, wait there's more...there are two more ways to earn more chances to win! 

1. Watch our new video and take a short survey.
2. Invite your facebook friends to do the same!**  We made it easy for you, just copy and paste the message below on your wall and/or send a direct message to all your facebook friends:

I entered the Auto Expert Gas Card Giveaway  for a chance to win A Full Tank of Gas*, enter to do the same!  Spread the word and you can earn even more chances to win! Visit http://www.facebook.com/autoexpertsocal?v=app_11007063052

No purchase necessary!

Prize Eligibility:
Only persons residing in Southern California counties of Riverside, San Bernardino, Los Angeles San Diego, and Imperial and who are at least 18 years of age can enter.

Sweepstakes Starts: April 01, 2010 @ 08:00 am (PST)
Sweepstakes Ends: April 30, 2010 @ 11:59 pm (PST)

Official Rules:
*Full tank of gas, for this sweepstakes, is valued at $40. The winner will receive 2 $20 gas cards, value of $40.
**Your friends will need to complete the video review survey and become a fan of Auto Expert in order to count as a chance to win. 

The Auto Expert Gas Card Giveaway is open only to legal residents of California residing in the counties of Riverside, San Bernardino, San Diego, Imperial and Los Angeles. Entrants must be 18 years of age or older with a valid driver’s license at the time of Promotion registration. The winner will be randomly selected. All current fans prior to this sweepstakes start date and new fans that join within this sweepstakes timeline, except Auto Expert employees, will be count as an entry. Secondly, an entrant can earn more chances to win by completing the video review survey. Thirdly, an entrant can earn another chance to win by inviting their facebook friends to become friends of Auto Expert, however this entry will only count if their friend becomes a fan and completes the video review survey.


Entries not available to Auto Expert employees.


Auto Expert reserves all rights to cancel the contest do to improper abuses by entrants. Please email sdeleon@autoexpertonline.com for any questions or comments.
 
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Is money down necessary when purchasing a car?

Money down is not always necessary, but may be at times, depending on the stipulations on the loan approval. If you have a higher tier credit rating then money down is not usually required. It also depends on how much you have been approved for and what the price of the car is.  For example, if you're approval amount is $20,000 and the out the door price of the car is $23,000 then the you would have to put down $3000.

Even though putting money down isn't necessary, it is helpful when you want to lower your monthly payment because, obviously, the amount financed would be less.   When factoring your monthly payment always figure $20/month per $1,000.

There is a lot of debate about whether you should put any money down on car purchases, so it really is a personal matter for each individual. The main motivator should be basing the amount of money down on what you want the actual monthly payment to be and getting to an amount that you are comfortable with.

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Car Buying Tips - An Insider's Guide

There are three main steps to buying a car – Financing, Research and the Dealership.

 

Step 1: Financing.

 

Before searching for a vehicle, know the amount you want to spend and get approved for an auto loan for that amount. There are several ways to get preapproved: 1) Apply with your financial institution. Banks usually base approval on your FICO score and have higher interest rates. Credit unions usually have better rates, friendlier service and most CUs base approvals on their internal score, which encompasses your FICO, debt ratio, delinquency rate and monthly income. 2) Most dealers have their own financing and usually base approval on your FICO score.

 

In addition, understand your payment parameters since you’re financing a monthly payment. Figure out what your budget allows on a monthly basis and be sure you’re willing to make that payment for at least 4 to 5 years.

 

If you decide to lease the vehicle, the monthly payments will be lower however after the lease term is over, you do not own the car and there is a residual (lump sum) to be paid or finance if you choose to buy the car. In addition, all leases have mileage stipulations and if you go over the mileage limit, you’ll have to pay a per mile penalty.

 

Step 2: Research.

 

Take the time to research the vehicles you have in mind. Factor in your “needs” and “wants”. Don’t assume your vehicle has a feature you need and/or want, check it out for yourself. To research the vehicle’s features, visit the manufacturer’s website. Also check out independent tests and rankings for the vehicle in mind. Well-known sites include Consumer Reports (www.consumerreports.org), Motor Trends (www.motortrend.com) and JD Powers (www.jdpower.com/cc/auto/index/jsp).

 

When researching, you want to know other factors that will affect the price of the car as well as your monthly payments.

• Additional accessories for the car - The more features you want on the vehicle, the higher the purchase price will be.
• Trade-ins - If you trade in your current vehicle with the same dealership you’re purchasing the car from, do not let them know until they have given you a price for the vehicle you’re purchasing. The dealer will try to lower the amount of your trade to make up for the “great” price they’re giving you on your new vehicle.
• New or pre-owned - With some makes, the resell value can be similar to a newer model. Compare prices with a new and used model when looking for a particular car.

 

Step 3: The Dealership.

 

To avoid headaches and the chance of being hassled into a car you don’t want, determine the exact vehicle you want before going to the dealer. This includes knowing the interior/exterior color as well as options and/or features you want. If you’re not willing to settle, don’t! Dealers are able to trade with other dealers for your specific car. Know the invoice price and MSRP, and which one you will be paying for. Dealers will add the salesperson’s commission into this price, so always compare prices with other dealers.

 

When you’re at the dealership, do not feel obligated to finance with the dealer. However, most dealers will still need to approve you with their finance company to ensure you can pay for the car just in case your financial institution decides not to. Some dealers will accept a preapproval letter from your financial institution to avoid preapproving you through their own finance company.

 

When you decide to purchase the car, check the fine print on the purchase order and do not sign unless you are 100% comfortable with the information. Also, get a due bill for outstanding items and do not sign the purchase order unless you’re willing to pay for outstanding debts on the vehicle.

 

For pre-owned vehicles, ask for a car fax report to check for any reported accidents on the vehicle. If the dealer is not willing to provide a car fax report, ask for the vehicle’s VIN (vehicle identification number) and purchase a carfax report at www.carfax.com.

 

Always remember, your biggest bargaining chip is that you can always walk away and start over with another dealer.

 

There is an easier way…

 

Auto Expert is a personal shopper from beginning to end, and everything in between. They will assist you in researching, financing and delivering the vehicle to you. They also deal directly with the management of the dealership, removing the salesperson’s commission.

 

In addition, Auto Expert works with a selection of dealerships throughout Southern California, so their inventory is endless. Another bonus, Auto Expert has separate trade-in vendors who bid on your trade. This allows for a fair appraisal without influencing the purchase price of your new vehicle.

For more information about our service, visit us online at http://www.autoexpertonline.com/ or call us toll free at 1-800-359-4567.

 

Other car choices comparable to recent Toyota model recalls

Recent recall news surrounding Toyota – Floor Mat Entrapment recall on 9 models last September, Accelerator Pedal recall on 11 models in January and Brake Issues for the 2010 Prius model in February – could cause consumers to be reluctant to purchase a Toyota until these issues are resolved. Hopefully, Toyota can rebuild their reputation (fast) and remain a top competitor for economical vehicles.
However, if you’re in the market to purchase a vehicle and were contemplating on buying a Toyota, don’t discount their competitors. Almost all automakers have cars in the same class. In this article, we’ll focus on the popular Toyota Camry and Corolla with similar models.

Camry competitors include:

Honda Accord
Nissan Altima
Ford Fusion
Chevy Malibu
Mazda 6

Corolla competitors include:

Honda Civic
Nissan Sentra
Ford Focus
Chevy Cobalt
Mazda 3

All of the models listed above offer similar features, options, and safety standards. The American competitors like Ford and Chevy have made marked improvements over the last few years and often offer cash rebates and great financing rates. In fact, the Ford Fusion won Motor Trend’s Car of the Year! And, the Ford Fusion hybrid is the most fuel-efficient full size sedan.

In addition, many automakers offer brake-override systems according to a recent Wall Street Journal article and these models include some of the ones listed above. Unfortunately, Toyota didn’t offer brake-override systems,

which is a system built into most of their cars that cuts off a car's acceleration if the driver is hitting both the gas and brake at the same time.  The computer system—known in the industry as "Smart Pedal" —tells the engine to disregard the accelerator if both the brake and gas pedal are pushed while the vehicle is moving.

Nissan Motor Co. and General Motor Co., including the four-cylinder Chevy Malibu, both offer the brake-override system.

Ford Motor Co. is employing the technology on its Fiesta subcompact car, which will be introduced in the U.S. later this year. Ford plans to roll the feature out to its other vehicles although a timetable hasn't been disclosed.

Toyota's Plan to Fix Accelerator Pedals on Recalled Vehicles

From the Toyota Newsroom, TORRANCE, Calif., February 1, 2010:

Toyota Motor Sales (TMS) U.S.A., Inc., today announced it will begin fixing accelerator pedals in recalled Toyota Division vehicles this week. Toyota’s engineers have developed and rigorously tested a solution that involves reinforcing the pedal assembly in a manner that eliminates the excess friction that has caused the pedals to stick in rare instances. In addition, Toyota has developed an effective solution for vehicles in production.

Parts to reinforce the pedals are already being shipped for use by dealers, and dealer training is under way. Many Toyota dealers will work extended hours to complete the recall campaign as quickly and conveniently as possible, some even staying open 24 hours a day. The company has also taken the unprecedented action of stopping production of affected vehicles for the week of February 1.

“Nothing is more important to us than the safety and reliability of the vehicles our customers drive,” said Jim Lentz, president and Chief Operating Officer, TMS. “We deeply regret the concern that our recalls have caused for our customers and we are doing everything we can – as fast as we can – to make things right. Stopping production is never an easy decision, but we are 100% confident it was the right decision. We know what’s causing the sticking accelerator pedals, and we know what we have to do to fix it. We also know it is most important to fix this problem in the cars on the road.”

Lentz added: “We are focused on making this recall as simple and trouble-free as possible, and will work day and night with our dealers to fix recalled vehicles quickly. We want to demonstrate that our commitment to safety is as high as ever and that our commitment to our customers is unwavering.”

On January 21, Toyota announced its intention to recall approximately 2.3 million select Toyota Division vehicles equipped with a specific pedal assembly and suspended sales of the eight models involved in the recall on January 26.

Toyota vehicles affected by the recall include:

• Certain 2009-2010 RAV4

• Certain 2009-2010 Corolla

• 2009-2010 Matrix

• 2005-2010 Avalon

• Certain 2007-2010 Camry

• Certain 2010 Highlander

• 2007-2010 Tundra

• 2008-2010 Sequoia


No Lexus Division or Scion vehicles are affected by these actions. Also not affected are Toyota Prius, Tacoma, Sienna, Venza, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser, Highlander hybrids and certain Camry models, including Camry hybrids, all of which remain for sale.

Further, Camry, RAV4, Corolla and Highlander vehicles with Vehicle Identification Numbers (VIN) that begin with "J" are not affected by the accelerator pedal recall.

In the event that a driver experiences an accelerator pedal that sticks in a partial open throttle position or returns slowly to idle position, the vehicle can be controlled with firm and steady application of the brakes. The brakes should not be pumped repeatedly because it could deplete vacuum assist, requiring stronger brake pedal pressure. The vehicle should be driven to the nearest safe location, the engine shut off and a Toyota dealer contacted for assistance.

Detailed information and answers to questions about issues related to this recall are available to customers at www.toyota.com/recall and at the Toyota Customer Experience Center at 1-800-331-4331.

The Costliest Car Buying Mistakes

Let’s face it, buying a car whether new or used is a huge endeavor and should not be taken lightly. Auto Expert recommends that buying a car should involve research, research, research. On a recent post on our blog, Tips to Buying a Car, we explain how you should research 1) your credit 2) the car(s) that interest you and 3) the dealership and their tactics. According to Yahoo’s article, The Costliest Car Buying Mistakes, there are 8 common misconceptions when buying a car that can cost you a pretty penny. Here’s what they had to say:


1. Confusing Wants with Needs – Having a convertible is a nice feature to have, especially with SoCal’s famous weather. However, if you have a family of 4 (especially if that includes two small children), is that practical? Convertibles are considered luxury, so not only are going to pay more, but it might cost you convenience and cause you hassle when reality hits.

2. Test Driving the Wrong Trim – According to Yahoo’s article, “Be wary of dealers who give you the highest trim level of a car to test drive and then proceed to sell you a trim that better fits your budget. Car shoppers who fall for this trick usually end up sorely disappointed with the car's performance and features. To avoid making this mistake, test drive the exact trim you plan to buy before signing any papers.”

3. Sacrificing Reliability with Appeal – Don’t judge a book by its cover, so just because a car looks good, it doesn’t necessarily mean it performs well. Check out Consumer Reports and reviews on J.D. Powers to see how your car rates.

4. Not Know What Others Paid – You wouldn’t (or shouldn’t) buy a house without knowing what other neighbors paid for a house similar to yours. Same holds true with cars. Research what others are paying for your car of interest to see if your price is similar.

5. Underestimating Your Trade-In – Always research the value of your trade. Two good sources are Kelley Blue Book or NADA Guides. The dealer will almost always lower the amount of your trade to provide you with the “awesome” deal they’re giving you on your new vehicle. Nothing is done until the paperwork is signed, so if the dealer is not willing to give you the fair value of your trade, find another dealer who can. A side note, the best amount you’ll receive for your trade-in is if you sell it yourself, private party. However, are you willing to go through that hassle?

6. Buying Options You Don’t Need – All base models are just that - base, plain, economical - which means it’s less expensive. The more options you want on your vehicle, the higher trim your vehicle will become, which means more money. For example, if you want navigation, you’ll probably get a higher trim that comes with leather interior, sun roof, and many other options.

7. Not Cross-Shopping Deals – According to the article, one of the costliest mistakes car shoppers can make is forgetting to cross-shop car deals just as they would competing vehicles -- though doing so can help save them bundles. Take, for example, the similarly-priced Nissan Versa and Chevrolet Aveo. Recently, the Aveo was offered with zero-percent financing for up to 72 months. Nissan, on the other hand, was only offering 1.9 percent financing for up to 60 months plus $500 cash on the Versa. At first glance, the Aveo appears to be the better deal. However, a simple crunching of the numbers reveals that the Versa’s monthly payment would actually turn out to be a bit less than the Aveo -- assuming an equal down payment of course. Don’t let carefully-crafted sales promotions mislead you into thinking that you’re getting the best deal around. Be meticulous in comparing car deals for competing vehicles, and remember that these deals change monthly.”

8. Only Thinking in Terms of Monthly Payments – Remember, you’re paying interest and fees over the life of a loan, so you’re usually paying a couple thousand more when financing your vehicle. You should calculate the interest and fees when determining the price of your vehicle so you understand the “full” amount of what you’re paying for.