Buying your first car can be both an exciting and nerve-wracking process. After all, without a trade-in of your own, you will be more dependent on car financing options and auto loans in order to get the money you need for the purchase. Fortunately, this is a road well-traveled (no pun intended), and there are several tips you can keep in mind when seeking a car loan. Consider the following in order to help make your first-time car purchase a smoother and easier experience.
Check Your Budget
Car loans will naturally involve monthly payments, so you should make sure that your current finances will be able to support the amounts without causing undue hardship. However, it is also important to take into account the other natural expenses that come with owning a car. Fuel, insurance, and maintenance all come with their own costs, and these need to be included in your budget calculations as well. This can help you find the most sustainable price range for your car purchase.
Prioritize Your Wants
Cars can come with numerous add-ons and extra features, each of which will add to the base price. It can help to draw up a list of different additions and rank them in order of what you want most. This way, if you find yourself able to work some top picks into your car purchase (and budget calculations), you can nab them and get more enjoyment out of your new car.
Mind Your Credit Score
If this is your first car purchase, then chances are it’s one of the largest transactions you’ve undertaken in your life so far. Be aware of your credit score and how it can help you get better terms on your car loan. Any outstanding debts will reduce your score, and timely repayment will improve it. If you have any ongoing debts, such as from a credit card bill, consider paying them off before seeking an auto loan for the extra boost to your credit rating.
Seeking pre-approval for a car loan can help you figure out what kind of purchasing power you can bring to a dealership. This allows you to a) match the car to your finances instead of vice-versa and b) reduces uncertainty and lets you stay focused on maximizing the value you can get from the loan.
Credit unions offer car financing options, but so do dealerships and banks. Do a bit of comparative shopping and see how the terms, interest rates, and amounts of different loan sources compare to each other. Keep copies of proposed finance contracts and compare them to each other. If you go in to a credit union or bank, you can get more trustworthy advice when comparing different options (car dealers work on commission, after all).
Use LUSO Federal Credit Union for Your Car Financing Needs
LUSO Federal Credit Union is a not-for-profit, member-owned financial cooperative dedicated to providing members with quality financial services and products. We at LUSO pride ourselves on serving the financial needs of our members and helping them get the financing needed for important milestones, like buying a first car. Our car loan services are available in Wilbraham, Ludlow, Springfield, Chicopee, Westfield, and Hampden County, Massachusetts.
Feel free to contact our Ludlow branch toll free at 1-844-LUSO-FCU or our Wilbraham branch at 1-800-808-5876.