The kids have moved out, and now you want to ditch the minivan to buy the car you've always wanted. Or, maybe it's been a while since you've had a new a car and you're ready to take that step. To make this easy for you, we've outlined several tips to help you navigate the car-buying process.
First things first, check your credit score. This is one of the most important steps before getting your car loan. Why? Because your credit score determines the rates you can qualify for. If you apply with an average-to-low credit score, you may qualify for a loan, but not at the best interest rate. Improving your score for a lower interest rate will save you money over the term of your loan.
The next best thing to do is to get prequalified right off the bat, so you can go car shopping with a purchase amount in mind. Most banks and credit unions will provide borrowers with the most competitive rates for new and used cars, which you can then take to the dealership to negotiate the best deal.
Longer term = More interest. Knowing this, you will want to look at the shorter loan terms with the lower interest rates. You will have to pay a higher monthly payment, but it will save you money in the end. Although, you can cut that monthly payment down if you choose to put down a 20% down payment. Most dealership don't require you to put money down, but if you have the means to, it's a smart move.
Another thing to watch out for is how you're going to pay for the extra fees and taxes. Rolling them into your financing might seem tempting, but it only makes it more difficult to pay off that loan. You will spend the first several payments just paying off the extras rather than the car itself. If possible, borrowers should pay for that out of pocket.
If you are looking to finance your new vehicle, Telhio
Credit Union may be able to help. Learn more and apply today at www.telhio.org.
