Got your eye on that shiny new king cab over at the new car lot? Or the Mini Cooper? You're timing couldn't be better.
Just don't be a sucker.
Sure, times are tough for the auto industry, but that doesn't mean they're just giving away cars. It still takes some hunting to get the best bargains.
"It is a great time to buy a car," says Eric Hoffman, spokesman for AWARE, or Americans Well-informed on Automobile Retailing Economics. "The banks and the dealers are still lending, and there are a lot of deals to be had."
Key to the keys
The first key to grabbing that new car is a good credit score. The less debt you have and the better your history of paying your bills on time, the better your credit score.
Navy Federal Credit Union, for example, offers 36-month new car loans at 3.75 percent. Pentagon Federal Credit Union offers 3.99 percent loans — for new and used cars and for up to 60 months. But those are for people with great credit.
"Scores of 700 or higher [the maximum is 850] are generally considered good," said Estelle Allen, a spokeswoman for Navy Federal. But as scores begin to dip, rates begin to climb.
If your credit is bad or nonexistent, Hoffman suggests getting a credit card and paying your bills on time. Your credit score will start climbing. In the meantime, maybe get an older-model car, which gets you a ride and helps amp up your credit score.
Shop for lenders
When you're ready to buy, remember that every lender will tie different rates to different credit histories. So, just like you're going to shop around for the coolest ride, scope out the lenders, too.
In fact, Hoffman suggests collecting quotes from several bank and credit union lenders and then hitting the dealers.
Dealers and manufacturers are lending, too. "See if they can beat your best offers. A lot of times they can," he says.
Interest rates as low as 1 percent — even some no-interest loans — are still out there, but only through the car reps.
Indeed, car companies are anxious to get sales moving.
Virtually every manufacturer has suffered double-digit declines. Chrysler's sales have plummeted 47 percent in the past year alone, General Motors is down 29 percent and Toyota dropped 41 percent, according to the industry watchers at Autodata.
As sales have slowed, inventory has grown, with each vehicle costing dealerships.
"The dealers buy those cars from the manufacturers, so they're on the hook for them," says Hoffman, citing dealership after dealership that has gone under lately because they could not move their inventory fast enough.
Most of the major automakers have special incentives available to military personnel.
These discounts, when combined with other offers, can amount to several thousand dollars off the advertised price. For example, GM has a deal going on the '09 Chevy Silverado (LTZ with two-wheel drive) that will notch the $39,945 MSRP down to $35,583. For more information, visit www.gmmilitarydiscount.com">www.gmmilitarydiscount.com.
To find out what's available for any brand of vehicle, visit the auto maker's Web site and search for "military discounts."
A key thing to keep in mind is that there are often two levels of discounts. Automakers — GM, Ford and the rest — start chipping away at list prices with regional specials. At the local level, individual dealers will knock prices down even more.
Remember: Each dealer is an independent owner-operator. So, the Ford dealer you talk to on one side of town may not have the same deal as the Ford guys down the road.
That can translate into important nuances in how they're willing to haggle. some dealers make more money per car, while others find their profit margin in a bigger volume of sales.
So, again: shop around. That is the only way to separate the good deals from the best.
Military car-buying trends
A recent survey showed 68 percent of military members have purchased a vehicle in the past two years, compared with 48 percent of civilians.
More facts on troops and their new rides:
• 69 percent financed their purchase, while 25 percent paid cash.
• 93 percent who financed a vehicle said they were satisfied with their financing.
• 57 percent of service members plan to purchase a new or used vehicle in the next two years, compared with 45 percent of consumers nationally.
• 67 percent expect to finance a vehicle purchase.
• 91 percent agree that the economic climate has increased the need for borrowers to educate themselves about financing.
• 81 percent of military consumers conducted research before applying for financing, compared with 51 percent of the general public.
• 78 percent of the military say that they feel informed about vehicle financing, compared with 57 percent of consumers nationally.
Source: Americans Well-Informed on Automotive Retailing Economics (AWARE) 2008 Consumer Tracking Survey