Section 1:Before You Shop

Section 3:Buying vs. Leasing

Section 2:Choosing A Vehicle

Section 4:Dealership vs. Private Party

Section 5:Negotiating with Dealerships

Section 6:Shopping For Car Insurance

Car Buying 101The Basics of Buying a Car

Section 7:Additional Resources

What Can I Afford?Before shopping for your next vehicle, figure out how much you can afford to spend. Determine what monthly payment you are comfortable with and set your budget. Consider other costs related to your vehicle purchase such as:• Insurance• Maintenance• Fuel costs• Registration fees

If you have a vehicle that you’re trading in, find out its market value by using reference guides such as NADA, Kelley Blue Book, and Edmunds. You’ll want to factor this in to your budget. You can also obtain vehicle trade-in quotes from several dealerships in order to get the best deal.

What Do I Need?Determining your car needs before shopping for your vehicle will help narrow your choices and establish what you need versus what you want. Also, consider these questions:• New or used?• Lease or buy?• How will the car be used? (i.e. Simple errands in your city or long commutes on a regular basis?)• How long will you keep the car?• What features are important to you?• Do you want an automatic or manual transmission?

BEFORE YOU SHOP

Do Your ResearchTake your time weighing your options and examining the vehicles that fit your budget. Avoid making any quick decisions. Test-drive several vehicles that you’re interested in and in different environments. You want to determine how it performs on various road conditions (i.e. residential neighborhoods, highways, hills, etc.) and if you’re comfortable driving it.

Aside from test driving and visiting dealerships, it’s also important to research vehicle reviews. If there is one or a few cars you’re considering, find out what the reviews are on topics such as safety and reliability.

Know When To ShopShopping for your vehicle at certain times can save you money. Dealers often have reduced prices at the end of the model year, or at the end of the month, when they need to turn over stock.

New vs. UsedThere can be both advantages and disadvantages when it comes to choosing a new vehicle versus a used vehicle. With a new vehicle, you’ll save money on maintenance and likely won’t need any until you’ve driven a couple of thousand miles. New vehicles are also covered by their manufacturer warranty for at least three years, maybe longer. If anything goes wrong, the manufacturer is responsible for fixing it.

CHOOSING A VEHICLE

Also, a dealership may have the ability to obtain a specific new model that you’re interested in, at no extra cost, if a color or feature you want is unavailable.

When it comes to used vehicles, the value typically depreciates at a much slower rate. Prices are typically lower and, depending on the vehicle, it can be resold in the future for a significantly lower loss in equity. Also, buying a used vehicle isn’t as risky as it has been in the past, due to manufacturers focusing on reliability and durability. In most cases, the original manufacturer warranty is transferrable to a second owner. For example, if you purchased a 2-year-old vehicle from a dealership or private party, you would now own the remaining 12 months of basic coverage on the three year manufacturer warranty, assuming you have not surpassed the mileage allowance.

A lease is a long-term rental agreement where the dealership owns the car but the customer has the right to use it for the duration of the lease term. Lease agreements last anywhere from two to five years. The customer makes monthly payments to the dealership or to an assignee, a bank or other financing source.

Things To Consider When BuyingWhen you purchase a vehicle, you have the freedom to do what you want with the car. That can include maintenance-related additions such as new tires to cosmetic-related modifications such as new paint and window tint. Just be mindful of the laws and regulations in your state regarding vehicle modifications as certain types are considered illegal.

Once your vehicle is paid off, it’s completely yours. You own it. You can keep it for as long as you like. However, as the car ages, you may incur higher maintenance fees.

Things To Consider When LeasingWhen you lease a vehicle, you can enjoy a new car every few years. However, you can only drive within certain mileage parameters. If you exceed those parameters, you are likely to incur additional fees upon returning the car. You may also be responsible for several up-front costs including an acquisition fee, the first month’s payment, taxes, and more. If you want to keep the car you’re leasing, explore the option of a lease buyout. You may be able to get a used car loan to purchase the leased vehicle.

BUYING VS. LEASING

When you decide to purchase a car, you can do so through a dealership or a private party. Dealerships handle all of the paperwork and take a lot of pressure off of you - the buyer. Purchasing from a private party means that you and the seller have to take care of the entire transaction yourselves. However, negotiating a price that you want may be easier with a private party, especially if they’re eager to sell. Here are a few things to consider for each scenario.

DealershipAs previously stated, dealerships handle all of the paperwork associated with the transaction. They also offer various financing and warranty options. A vehicle from a dealership has been thoroughly inspected, even more so if the car is classified as Certified Pre-Owned. A Certified Pre-Owned vehicle goes through a series of inspections and comes with an additional warranty. If you are purchasing a used vehicle, buying it from a dealership offers you more legal protection than buying from a private party.

Unfortunately, some dealerships charge higher prices than private parties and leave less room for negotiation. Their sales teams typically receive commissions as compensation, so their persuasion can often distract even the most prepared buyer. It’s also easy to get distracted and lose sight of the bigger picture. Know what you want and don’t get derailed by sales pitches and buyer incentives.

DEALERSHIP VS. PRIVATE PARTY

Private Party Many private parties use a “blue book” value to determine their asking price (typically from the Kelley Blue Book). To negotiate, research the car’s marketability to get the asking price lowered. Also, sellers are often willing to accept an “OBO” (Or Best Offer). Private sellers typically aren’t as persuasive as dealership sales teams.

Buying from a private party can be risky. Private sellers aren’t bound by the same state and federal laws as dealerships. They also do not offer warranties and sell their vehicles “as-is”, meaning if any problems arise, you are responsible for taking care of them. Lastly, you and the private seller are responsible for ALL of the paperwork. This can include the bill of sale, title and registration transfer, and all related taxes and fees. This usually means a trip to your department of motor vehicles.

When shopping at a dealership, you must know how to negotiate the right way. Negotiating involves staying in control, keeping things simple, and never being rushed into a deal. Here are a few steps that will help as you shop with a dealership.

Make An AppointmentIf this is your second visit and you felt comfortable with the first salesperson who assisted you, make an appointment.

Bring A Summary SheetPrepare these pieces of information beforehand on a summary sheet:• Wholesale value of your trade, if trading• Available cash• Maximum offer• Maximum “difference” figure, if trading

(Your maximum offer minus the value of your trade.)

Have Your Trade AppraisedIf you are trading in a vehicle, ask to have it appraised before discussing the new car. The goal is to get the true wholesale value of your car. If you are offered as much or more than your car’s wholesale value, that’s a good sign for proceeding to the next step.

NEGOTIATING WITH DEALERSHIPS If the dealership refuses to have your car appraised or

won’t give you the true wholesale value, sell the car yourself or find another dealership.

Prepare to Negotiate & Make An OfferBegin the negotiating process by bargaining up from whatever you determined would be your lowest offer. Whatever your first offer, expect a counter offer from the dealership. You can also counter offer yourself by offering a small amount of money. Your goal is to set the scale of bargaining in your favor.

Inspect Your Final Paperwork Once you reach an agreement, carefully inspect your paperwork, especially the Buyer’s Order and Bill of Sale. The Buyer’s Order lists the price of everything related to the car - base cost, sales tax, registration cost, dealer fees, a full description of the car and the vehicle identification number (VIN). If you have any questions or want to change anything regarding the terms of the sale, this would be the time to do it. The Bill of Sale is the official sales contract for the car. Review the Bill of Sale carefully before signing it. You want to make sure it accurately lists everything you agreed upon. Once signed, it is legally binding and the car is yours.

One Final Inspection

Give your new vehicle one last look over very carefully. Try to do so when it’s not raining, as rain can hide surface defects. If everything looks good, drive away in your new car with a smile!

Now that you’ve purchased a vehicle, you want to make sure you are adequately covered if you get in an accident. Here are a few steps that will help when shopping for the right car insurance.

Establish A BudgetAlthough price shouldn’t be the only factor when shopping for a car insurance policy, you don’t want to choose a policy that you can’t afford. Establish a budget and find a policy that offers the exact coverage you need at that price. However, cheaper doesn’t necessarily mean better when it comes to car insurance.

Decide How Much Coverage You NeedCar insurance requirements vary from state to state. Once you know what’s required, you can decide what you need. The most common forms of coverage include:

• Collision• Comprehensive• Uninsured and underinsured motorist (UM/UIM)• Personal injury protection (PIP)

Consider your driving habits when determining what you need. If you have long daily commutes or in the past you’ve had accidents, you may want to consider more complete coverage.

SHOPPING FOR CAR INSURANCE

Compare Insurance QuotesApply for at least three car insurance quotes from different insurance companies. The most common way to do so is through the insurance company’s website. You may be asked for information such as:

• Name, address, and date of birth• Type, year, make, and model of your vehicle• Primary use and ownership status of your vehicle• Marital status• Auto insurance history• Information on other drivers to be included on

the policy

Be completely honest and also include any information that could help lower your rates, such as safety features on your vehicle and your annual mileage.

Once you have chosen one or two companies that have provided acceptable quotes, assess the company’s track record, especially when it comes to fairness, financial stability and customer service. Some helpful places to check are the National Association of Insurance Commissioners’ and J.D. Power.

Once you’ve chosen a car insurance company and policy, verify that it contains the coverage and price you requested. If you have specific questions, your insurance agent can help.

BankRate, KBB, Edmunds, NAIC and J.D. Power are not affiliated with or endorsed by Old Point National Bank. The information and links below are for informational purposes only.

Bank Rate (Auto Loan Calculator)Estimate monthly payments on your next vehicle purchase.

Edmunds®Research new and used vehicle pricing, car reviews and ratings.

J.D. PowerReview consumer satisfaction surveys and auto insurance ratings.

Kelley Blue Book®Research new and used vehicle pricing, MSRPs, trade-in values and other information.

NADA Guides®Research new and used vehicle pricing, MSRPs, trade-in values and other information.

National Association of Insurance Commissioners (NAIC)Access information on insurance companies including closed insurance complaints, licensing information, and key financial data.

ADDITIONAL RESOURCES

OldPoint.com

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Jennifer RegisterVice President, Retail Lending Manager757.325.8130 | jregister@oldpoint.comNMLS#528742