5 smart tips for buying a car in Birmingham—what to know before you go

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The idea of getting a new car is really exciting. The actual process of buying a car? Not always.

I recently bought my first car from a local dealership, and I’ll be honest: I went into it with a lot of questions. What exactly is APR? How much should I put down? What should my monthly payment be? And perhaps most importantly, how am I supposed to know if I’m actually getting a good deal?

I learned a lot by doing, but I also learned that a little preparation before you walk onto a dealership lot can make the whole experience much easier.

We talked with Melanie Henson, Consumer Lending Manager at AmFirst, about what every car buyer should know before signing on the dotted line.

1. Set a budget (before you fall in love with a car)

One of the easiest mistakes to make? Starting with the car instead of the budget.

Before you start scrolling through dealership websites or test-driving your dream car, figure out how much you’re actually comfortable spending each month. And remember that your car payment isn’t the only monthly expense that comes with owning a vehicle—you’ll also need to account for insurance.

Melanie says buyers often look at the price listed online and assume their payment will be based on that number. But the advertised vehicle price typically doesn’t include things like taxes, title and fees or optional products such as GAP coverage and warranties.

In other words: The number you see online isn’t necessarily the number you’ll finance. Knowing your maximum comfortable monthly payment can help you stay realistic while you shop.

2. Get pre-approved before you go car shopping

Melanie’s No. 1 piece of advice for first-time car buyers is simple: Visit your local credit union first. Getting pre-approved before you shop can help you understand what you qualify for, what you can afford and what rate you can expect.

Most credit unions offer first-time buyer programs, though requirements vary. You may need things like a recent paystub, vehicle information or purchase details to get started.

The bonus: You walk into the dealership already knowing your financing options. And by the way, dealership financing isn’t automatically a bad deal. If a dealer offers you a lower rate than your credit union, go with the lower rate.

Just think of your pre-approval as your baseline. It gives you something to compare against instead of trying to figure out whether a financing offer is competitive on the spot.

3. What do you need to know about APR?

This was one of my first questions when I started shopping.

APR, or annual percentage rate, is essentially the cost of borrowing money for your car. Generally, a lower APR means you’ll pay less in interest over the life of the loan, assuming the other terms are the same.

That’s another reason pre-approval helps: You know your rate before you’re sitting in the dealership finance office making decisions.

4. What questions should you ask before signing an auto loan?

Once you’ve found the car, agreed on a price and are ready to finalize the loan, don’t be afraid to slow down and ask questions.

Melanie recommends asking things like:

• Are taxes, title + fees included in this amount?
• Does the loan include protection products such as GAP insurance or a warranty?
• If there’s a warranty, is it bumper-to-bumper coverage or limited coverage?
• Is there a penalty for paying the loan off early?

You don’t have to know everything about auto financing before buying a car. But you should feel comfortable asking questions until you understand what you’re agreeing to.

5. Keep your banking in one place

For Birmingham-area shoppers, AmFirst works with more than 100 dealerships across Birmingham, Cullman, Mobile and East Alabama, including Jacksonville, Oxford, Pell City and Talladega.

Once you sign off on your new ride, keeping your checking and savings with AmFirst can make managing it even easier. Make payments directly through the mobile app or set up an automatic transfer, with many checking options available with no monthly fee.

Plus, eligible members can apply for pre-approved auto loans, refinances, personal loans and credit cards right from the app.

One place to borrow, bank + manage it all at AmFirst—can make it easy before, during and after your car purchase.

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AmFirst is federally insured by the NCUA.