Tuesday, May 3, 2016

Setting Yourself Up for Auto Loan Success

When shopping for a new car, it’s always too easy to let your emotions do the shopping. After all, you’ve been fantasizing about that red convertible for how long? For most people, a car is the most expensive purchase they’ll make aside from their house. So, keeping this sobering thought in mind is a solid step toward reining in those emotions.

Common sense dictates that you’ll want the lowest interest rate possible regardless of whether you’re buying a new or used car. After all, the ultimate goal should be to pay off your car with the least amount of money in the least amount of time.

Obtaining a great low interest-rate loan starts way before you hit the showroom. It begins at home with an assessment of both your financial situation and what you really need in a car. Here are some steps you can take for auto loan success:
  1. The first thing to do is take a look at your credit report. You’ll want to have a good idea of where you stand before you talk to your credit union representative. The better your credit, the more choices you’ll have. If your credit is borderline and you have some time before you need that new car, invest some time to clean up any possible problems.
  2. Next, it’s important to figure out what you can afford before shopping around. One good rule of thumb is to spend no more than 10 percent of your total earnings toward your car expense. Another good rule to follow is to finance no more than 80 percent of the price of the car. If you finance more than 80 percent, you may find yourself owing more on the auto loan than you could get by selling the car or trading it in.
  3. Know what you are looking for before you visit the dealer. The Community Financial Auto Resource Center gives you access to valuable information to help you with the car buying process, all in one place. You can find statistics about almost any car ever made, research vehicle pricing, read blogs and opinions about different makes and models, and even look up reviews on places to purchase a car. 
You’re only ready to start shopping for your car and auto loan once you’ve determined how much you can spend on it and how much of a down payment you can make. Using your head first, instead of letting your emotions lead you, may not put you in that red convertible you’ve been dreaming of now, but the financial payoff from saving money might get you there a little later.

Are you in the market for a new or used car? Visit cfcu.org/autos for today’s low auto loan rates. To inquire about how we can put you in the driver’s seat for less, call us at (877) 927-2328 or stop by your nearest Community Financial branch today.

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