Whether you’ll be car shopping before the year ends or are thinking about buying within the next few years, a little bit of homework can often help you negotiate a better deal.
While many dealerships may be reputable and transparent, it’s important to remember that financing is another way dealerships can make money. Knowing what to expect can help you look out for common sales tactics, ask better questions, and make sure you’re getting a fair deal.
Before you start shopping, here are five car buying secrets to know.
The dealership interest rate may not be the lowest available
The dealership may receive compensation connected to the loan and may offer a higher rate than what’s available. That doesn’t automatically make dealership financing a bad deal, but it does mean you should compare it.
Getting pre-approved for an auto loan before shopping helps provide a benchmark. If the dealership can legitimately beat your pre-approved financing, that’s great. If it can’t, you already have another option.
You may be told there is no outside financing allowed
This can be a legitimate situation depending on where you are buying your car. It's another way for the dealer to control the purchase and ensure they are making a profit on the financing.
If you run into this situation, you can choose to move forward and use the dealer's financing and then immediately refinance the vehicle to your preferred lender. If you go this route, you will want to make sure the dealer does not have a pre-payment penalty or other financial penalties associated with an early payoff.
Taking advantage of available refinancing specials, like no payment for 90 days and earning 1% cash back when you refinance, should make this transition an easy one.*
The price, trade-in and financing can get mixed together
You have to negotiate the price of the car, the trade-in, and consider your down payment. Then there’s the financing. With all these variables, it can be difficult to tell if you're getting a good deal without evaluating each separately.
First, negotiate the vehicle’s total purchase price. Then discuss your trade-in (if you have one). Finally, compare financing based on APR, length of loan, and total cost. Keeping the numbers separate makes it much easier to understand what you're actually paying.
Also look out for common pressure tactics that dealers may use, saying: “this car might not be here tomorrow” or “my manager can only approve this deal today.”
If you don't understand the financing terms or need more time to compare options, give yourself permission to walk away.
The extras can add up quickly
Extended service contracts, protection packages, GAP products (covers the "gap" between what your car is currently worth and the remaining balance on your loan), and other add-ons may be presented to you after you agree on the price. Some may be useful depending on your situation, but don't assume you need everything offered.
Find out what each product costs, if it is optional, whether the cost is being added to the amount you're financing, and consider how it could affect your monthly payment.
Pre-approval is one of your strongest negotiating tools
Getting pre-approved allows you to shop knowing approximately how much you can borrow, your potential interest rate, and what loan term makes sense for your budget. It also changes the conversation.
Instead of relying on the dealership to tell you what financing is available, you can arrive with an option already in hand. This makes it easy to compare the dealership’s offer based on the numbers that really matter: APR, loan term, amount financed and total cost.
It's easy to spend hours researching vehicles, comparing features and reading reviews before buying a car. Your financing deserves some research, too!
Before visiting the dealership, check your budget, review your credit, research vehicle prices and consider getting pre-approved through a trusted financial institution, like Credit Union of Ohio.
Not planning to buy soon, but wishing your current car payment was lower?
Most people assume refinancing may be more hassle than it’s worth, but the process is often quicker and simpler than expected. For example, at Credit Union of Ohio you can apply online in minutes and get a quick decision. All the loan details can typically be taken care of virtually as well.
You can even estimate your potential savings ahead of time by using a payment calculator to see what your new monthly payment could look like.
If you’re ready to take the next step in purchasing a new car or refinancing your current vehicle, get started here.
*APR = Annual Percentage Rate. Rate as low as 4.99% current as of 09-01-2026. 5.25% APR based on $30,000 loan at 72 months with $225 processing fee. Existing CU of Ohio auto loans are not eligible. Cash back offer for refinances only and requires a minimum loan amount of $5,000, maximum cash back is $500. Funds will be deposited into your savings account upon loan closing. Interest will accrue during the 90 day deferral period and you will pay more in interest as a result of this deferral period. Loan subject to credit approval. This offer is for a limited time only and is subject to change at any time.