The methods, criteria, and circumstances of shopping for, and purchasing, a new car have drastically changed over the last 20 or so years. In the past, purchasing a new car at a young age wasn’t an anomaly, it was the norm. Costs were relatively lower than they are now. Plus, the economy was in a much better state back then, which made it a lot easier for young people to afford their own vehicles. Rising inflation costs have made it increasingly difficult for many Millennial buyers to purchase their dream cars and many dealerships are reluctant to offer auto loans out of fear that the buyer might not be able to make their monthly payments. But fear not, because there are a few tips Millennials can implement to make their car-purchasing experience a little easier.
Budget, Budget, Budget!
Any time you’re planning on making a big purchase—like a car—it’s important to know exactly what you can afford to spend right down. Budget for everything and don’t stray from your convictions. Take all your other expenses—rent, groceries, rainy day funds—into account and set up a separate savings account to put towards your car payments. To be able to afford your dream car, make sure the vehicle you want is within your reach and remember, there’s more to purchasing a car than just paying for the car itself. Other expenses such as fuel economy, forthcoming repairs, oil changes, emissions tests, etc. should all be considered before you even step foot inside a dealership.
Car Loan Pre-Approval
Most dealerships assume that due to the recovering state of the economy, most Millennials can’t afford to purchase new luxury or practical vehicles and are therefore hesitant to do business with them. It’s your responsibility to thoroughly research car loan interest rates and know what you’re entitled to. Showing up at a dealership with an auto loan pre-approval in hand demonstrates that you’re serious about purchasing a vehicle and it will garner the type of service and respect you deserve from sales representatives.
Before you even start researching the type of car and automotive features you want and can afford, you should obtain an affordable financing plan for yourself. Research different rates offered by banks, financiers, and credit unions and compare and contrast between them so you can ascertain that you’re getting the best possible rates for your situation.
Avoid Unnecessary Add-ons
After you’ve conducted all the appropriate research, go into the dealership with strong convictions. Know what you want and need before going in and don’t let yourself be swayed by the smoke and mirrors. Stick within the confines of your budget and don’t pay attention to all the unnecessary add-ons that won’t enhance your driving experience in any significant way. Walk in with a purpose and be prepared to walk away if the pressure gets to be too much. It’s better to leave empty-handed than to end up with insurmountable debt over something you didn’t want in the first place. There are plenty of other dealerships and vehicles who will be happy to do business with you.
At LUSO Federal Credit Union, we’ve helped thousands of Millennials navigate the murky waters of becoming first-time car owners. We will take the time to carefully assess your current and projected financial standings based upon your disposable income and review all your financing and loan eligibility and repayment options to you. If you’re in the Wilbraham or Ludlow, MA area, then please feel free to contact either one of our branches at 1-(844) 587-6328 (Ludlow) or at 1-(800) 808-5876 (Wilbraham) to learn more.