Wednesday, December 28, 2011

Car Buying Tips

Buying a new or used vehicle is a major transaction for most consumers. Decisions made while buying a vehicle can impact the owner for many years to come. Shopping smart is good for any purchase but it is especially beneficial when buying a vehicle.

The high cost of vehicles makes it absolutely imperative that buyers do their homework BEFORE closing a deal on a new or used vehicle. If buying a new vehicle, find out what the invoice price is for that vehicle and what the cost over invoice is normally charged for the vehicle being considered. The sticker price on the window, or retail price, should not be used as a bargaining point for what the sale price should be. Consumer Reports and Edmunds are good resources for determining a fair price on a new vehicle. NADA and Kelly Blue Book are good resources for used vehicle pricing. Again, the "average retail" price is not the price value that consumers should be negotiating from. A fair price on most used vehicles would be splitting the difference between the "average retail" value and "average trade-in" value of the vehicle being considered. For example if the "average retail" price is $15,000 and the "average trade-in" value is $11,900, a fair sale price would be $13,450 for that particular vehicle.

Price negotiations for purchases and any trade-ins should be held mutually exclusive. A fair price should be sought for both transactions. Dealers are infamous for providing high prices for trade-ins and then adding the overage amount to the cost of the new purchase. This practice is also what causes many owners to become upside down on their vehicles, meaning that they owe more than the vehicle is worth.

The Credit Union would encourage members to shop our rates and terms first before shopping for a vehicle purchase. Our loan rates are publicly posted on our web site under the "LOAN RATES" tab. It is not uncommon for members to be told by a dealer that our rates are higher than the dealer rate when in reality the opposite is true. We recently had a good credit score member who was quoted a rate of 10% APR at a local dealer when the member was actually eligible for our advertised rate of 2.99% APR. North Alabama Educators Credit Union does have risk-based pricing for loan rates that are based upon the member's credit score. Even our "D" rated credit score members would be eligible for a fixed rate of 8.99% APR!

The fact is that dealers get paid from other lenders to push their financing to buyers. This is why dealers generally don't want members to finance their vehicles with the credit union. North Alabama Educators Credit Union would rather reward our member-owners with lower rates than to pay dealers $200-$300 for an automobile loan. At times, dealer financing may have a lower rate than the credit union especially when the financing is for a new vehicle. The key though is to verify available rates and terms independent of the dealer. Trust but verify is always a good policy to follow!

Friday, December 23, 2011

Merry Christmas from NAECU

Merry Christmas from your friends at

North Alabama Educators Credit Union.

Best wishes to you and your family

for a joyous and safe Christmas.

Friday, December 2, 2011

Christmas Loan

If you find yourself coming up a bit short on cash for the holiday season, our Christmas Loan is a nice gift. Qualified members can borrow up to $1,000 at a low fixed rate as low as 5.99% Annual Percentage Rate for a term up to 12 months. Consumers have been doing a much better job of reducing debt and increasing the amount saved throughout the year. The key to borrowing money is try to avoid it if possible. Shopping with your own cash is always more preferable than shopping with someone else's money and paying interest for the use of those funds. If you must borrow money, shopping for a good loan rate is worth the time and effort. Some credit cards, especially department store cards, have increased their finance rates considerably during the economic downturn over the past few years.

Our Christmas Loan will be available through the end of January 2012. The joys of Christmas shopping in December can often be soured by the credit card bills that arrive in January. Our Christmas Loan as well as other loan programs for higher balances could be used to greatly reduce finance charges being paid on outstanding debt.

Members of North Alabama Educators Credit Union who are interested in the Christmas Loan can review the rates and terms available on this and other loans at