CU Direct Connect strives to provide all of the information and tools needed to manage the car buying process from beginning to end. 

Below is additional Frequently Asked Questions regarding vehicles and the car buying process. If you have questions not addressed on this site please Contact Us and we will get back to you as quickly as possible!

Q: How long is my “Pre-Approved” auto loan valid?

A: Regardless of where you apply for an auto loan each financial institution will have different lengths that pre-approved applications are valid.  Be sure to read your certificate of approval for the amount of time your specific pre-approved loan is valid.

Q: What is a Loan to Value (LTV) ratio?

A: This is a number calculated by dividing the amount of the loan by the vehicle value published in a recognized auto pricing guide like NADA or Kelley Blue Book. Example: if the NADA price is $10,000 and your LTV ratio is 105%, you can spend up to $10,500 (including taxes, licenses, registration, after-market accessories, warranties, etc.) as long as the entire amount is less than your maximum approved amount. The pricing guide used to value vehicles varies by state.

Q: What if I have a trade-in and owe money on it? What if I owe more than the trade-in is worth?

A: If you trade in your vehicle when purchasing another vehicle from an auto dealer, they will manage the payoff. After you negotiate the price of the vehicle and the price of your trade-in, the dealer will charge or credit you the difference between the value of your trade-in and the payoff amount on your loan. A negative or “upside down” trade occurs when the dealer offers you less than what you owe on the vehicle you are trading. In the case of a negative trade-in, you will need to pay the difference or roll the amount into your new loan – as long as it fits within the Loan-to-Value (LTV) guidelines of your loan.

Q: What is a “Franchised” vs. “Independent” dealership?

A: Franchise dealerships have names such as "Jane Doe Ford" or "John Doe Mazda". These dealerships have a contract with an automobile manufacturer that allows them to sell its products.

Independent dealerships have names such as "Jim's Used Cars" or "Jack's Auto World". An independent dealership generally has one or more locations where it holds its inventory. These dealers have no affiliation or contract with any manufacturer.

Q: What about sales tax for my vehicle purchase?

A: The dealership will advise you of the exact details of registering your car with the Department of Motor Vehicles and paying sales tax for your respective city and state.

Q: What is the difference between the Manufacturer’s Suggested Retail Price (MSRP)/Window Sticker and the Dealer Sticker?

A: The dealer sticker price is usually a supplemental sticker added by the dealer to include either ADM (additional dealer mark-up), ADP (additional dealer profit), or high-priced, low-cost after market items such as rust-proofing. It is meant to boost the MSRP and allow the dealer to make additional profits.

Q: What is a hybrid vehicle and why should I consider one for my next vehicle purchase?

A: Any vehicle that combines multiple power sources for movement is considered a hybrid. Hybrid vehicles on the market today use an electric motor and an internal combustion engine for propulsion. Hybrids evolved from electric vehicles but have eliminated their predecessor’s inconveniences of short driving distances and the need to be plugged in. Hybrids combine the convenience of a gasoline-burning car and the efficiency of an electric car into one reliable mode of transportation. Hybrids are not plugged in like electric vehicles. The internal combustion engine on a hybrid recharges the batteries as well as supplements the electric motor to move the vehicle. Hybrid passenger cars like the Honda Civic Hybrid, Honda Insight, and Toyota Prius are extremely fuel efficient (50-70 mpg) and low polluting. Consider buying a hybrid if you want to lower your fuel bill and reduce harmful emissions.

Q: What does it mean in automotive ads when it states “residency restrictions apply”?

A: Automotive manufacturers commonly offer rebates and other incentives on a regional basis. According to the General Motors website it has five regions in the United States: Western, South Central, Central, Southeast, and Northeast. Rebates and incentives offered in one region may not be available in another region.