How being prepared can prevent car-buyers' remorse

Jeremy Lutzenberger

Submitted photo

Buying a car is one of the biggest financial decisions many Arizona families make, and it can feel intimidating. Between fluctuating interest rates, hidden dealership markups and the sheer number of vehicles on the market, it’s easy to get overwhelmed.

Here are some key tips to keep in mind before heading to the dealership, marketplace or meeting with a private seller:

Get pre-approved

Before you fall in love with a car on the lot, know exactly what you can afford. Getting pre-approved through your credit union eases stress, sets realistic expectations and puts you in a stronger negotiating position. It helps you shop smarter versus reacting emotionally at the point of purchase.

Know the true value of the car

Before signing anything, run the numbers. Trusted resources like JD Power (formerly NADA) and Kelley Blue Book are industry standards for checking vehicle values. This helps you understand your LVT — loan-to-value ratio — which in turn affects your loan terms, interest rate and even what additional protections you’re eligible for.

Protect yourself with GAP coverage if needed

If your loan-to-value ratio is over 100%, Guaranteed Asset Protection, known as GAP, is worth considering. GAP covers the difference between what you owe on a car and what your insurance will pay if it’s totaled. Many GAP products also offer benefits like deductible assistance and will give money toward your next vehicle should your current vehicle get totaled.

Consider mechanical or extended warranties

Cars today are mainly computers on wheels. What used to be a simple, inexpensive fix can now involve complex electrical components. If you’re buying a used car or one outside of the manufacturer’s warranty, look into MBP — Mechanical Breakdown Protection — or extended warranties to save thousands on unexpected repairs.

Don’t just shop for the lowest interest rate

The “best rate” doesn’t always equal the best loan package. Ask what’s included with your loan. Credit unions often provide additional benefits like GAP, MBP or flexible refinance options that big banks or dealerships may not. Always compare the total value, not just the percentage.

How to protect yourself if you buy from a private seller

If purchasing from an individual, remove their plates before driving off; they’re tied to the seller, not to you. Keep your sales documents with you when driving without plates, and register the car as soon as you can. If the seller has a loan that needs to be paid and the financial institution needs to send you the title, you can still take your sales documents into the Arizona Motor Vehicles Division and get temporary tags.

Always check or request maintenance records

Having a trusted mechanic inspect a car before you buy is ideal. If that isn’t possible, request detailed maintenance records. A vehicle’s history tells the long-term story of its reliability.

Watch out for dealership website fraud

A new scam on the rise involves fraudsters creating “fake dealership websites” designed to trick buyers into wiring money for cars that don’t exist. Be extremely cautious with online-only purchases, especially if you’re asked to wire funds. Research the dealer, look for physical addresses and verify through independent sources before proceeding.

Refinance when it makes sense

Your initial loan rate doesn’t have to be permanent. If your credit improves or if interest rates drop, refinancing can save you significant money. Some buyers even use equity in their vehicle to consolidate higher-interest debt. Just remember that while MBP and warranties generally carry over, GAP coverage usually does not and would need to be repurchased in a refinance.

Keep auto loans separate

Some buyers are tempted to combine two car loans into one for convenience — but this can backfire. It becomes complicated if one vehicle is totaled or sold. Keep loans separate to avoid major financial headaches later.

Buying a car will always come with some pressure, but with preparation and education, it doesn’t have to be overwhelming. Leaning on your financial institution for pre-approval, loan guidance and added protections can help you avoid pitfalls and find the right car at the right cost.

Editor’s note: Jeremy Lutzenberger is dealer relations manager at America First Credit Union, which has branches in Goodyear, Mesa and Tempe. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.