You’re ready to get a vehicle and know what car you want – or maybe you don’t know exactly which car you want, but you have an idea. Either way, unless you’ve inherited a large sum of cash, you’ll probably need to finance your new purchase with an auto loan. An auto loan will allow you to make monthly payments, creating a more affordable vehicle. If this will be your first purchase, you’ll want to do your homework so you can choose the right package to fund your new ride.
1. Check your credit score
Your credit score is a number between 300 and 850 and is used by lenders to determine the risk of lending you money. A higher score will help you receive better rates and other terms. You can check your score and get a free copy of your credit report every 12 months (www.annualcreditreport.com). Reviewing your credit reports ahead of time may give you an opportunity to correct any mishaps so that you can increase your score before you head out to purchase a car. If you don’t have any credit, it may be difficult to get a loan or could cost more in fees and interest. Try building your credit with a small line (like a secured credit card) so you can establish a score and also get some experience managing credit before making a big purchase.
2. Determine how much you can afford
You’ll want to take a look at your financial situation to make sure that you’ll have enough income to cover your living expenses. If you have a couple thousand dollars saved, you can apply that towards a down payment which will help reduce the amount you pay each month. Play around with numbers with an auto loan calculator to see what your payments might look like. When you finance, the amount you’ll pay each month will depend on factors like the price of the car, Annual Percentage Rate (APR) and the loan term. Keep in mind the full price of the vehicle instead of the monthly payments. Paying $500 a month for 36 months is a much cheaper vehicle than paying $500 a month for 72 months. Just because you have it, doesn’t mean you need to spend it! Other important considerations when it comes to affordability include car insurance, fuel, maintenance and repairs.
3. Choose your lender
Among options to finance your car, you can get an auto loan from financial institutions like Georgia’s Own Credit Union. Georgia’s Own can pre-approve you for a loan so that you’ll know exactly how much you’re qualified to borrow before you head to the car lot. This will help you avoid the salesman pushing you toward an unaffordable car.
4. Choose your vehicle
Once you’ve figured out how and where you’re going to get the money to pay for your new vehicle, the fun part begins – picking out your ride. Try to be practical with what you really need out of a vehicle. Sure, the brand new, top of the line car looks great, but is it what you need? Also, be careful with car dealers as they may try to talk you into a longer loan that will reduce your monthly payment, but will cost you more in the long run. If you plan to buy a used car from a private party, check the restrictions to make sure your loan covers that option.
Need help finding the right car? Georgia’s Own Carfinder is a car buying service through Georgia’s Own that can get you into the perfect vehicle. Simply provide any details you’re looking for and what you’re looking to pay and they’ll help find the car that fits your qualifications. Plus, they’ll even deliver it to your home or office.
If you’re in the market for a new car, don’t wait until you’re at the dealership to start thinking about financing. If you’ve never had the experience of getting an auto loan, it may seem terrifying at first, but it’s really not that bad. These are just the basics of a car loan so if you’re still not sure, don’t be afraid to ask for help. Your parents, family members or friends have probably gone through the process and can help guide you.
Key Car Financing Terms
- Annual Percentage Rate (APR) – Presented as a percentage, APR is a calculation of the full amount you will pay for a loan over the course of one year. Basically, it tells how much it will cost to borrow money (on top of the actual loaned amount itself). The higher the APR, the more you will pay for a loan overall.
- Amount Financed – The dollar amount of the credit provided to you from a lender.
- Credit Score – A number that lenders use to help them decide how likely it is that they will be repaid on time if they give a person a loan. It’s a number between 300 and 850 that represents your credit risk based on information in your credit file.
- Down Payment – The initial amount you pay to reduce the amount you need to finance.
- Loan Term –The amount of time in months you’re given to either pay back the loan or renegotiate for another term.
- Monthly Payment – The dollar amount due each month on the loan agreement.
- Total Cost – The total amount you will have paid after you have made all the payments as scheduled (includes the price of the vehicle, interest on the loan and any other services you might have added to the loan)
Sources: bankrate.com, Investopedia.com, moneyunder30.com
Most experts agree that the best time of year to purchase a new model car is in January and February – (plus, if you finance your new vehicle with us by January 31st, you can enjoy sixty days of no payments*). Sales at the beginning of the year are usually slow and dealers start to raise prices as the year progresses. One thing to keep in mind when buying a new car is the resale value. As you probably know, cars start losing value the second you drive off the lot which is a bad thing if you think you’ll resell or trade it down the road. Resale value begins when you buy the “right” car in the first place. Here are a couple of things to look for that affect resale value.
Color — Standard colors are much easier to sell than trendy colors.
Upgrades and options — Options like leather seats and sunroofs add to a car’s value, but a navigation system or upgraded stereo won’t bring any extra money when selling. Also, automatic transmission is much more popular than manual transmission.
Geography — Demand for vehicles varies in different parts of the country and even in different communities. Convertibles may be good for warmer weather states, but it’s not as valuable in the colder northern states. Likewise, a pickup truck holds less value in bigger cities as opposed to rural towns.
These are just a couple of tips to consider when purchasing a car. Though resale value is important to many who purchase a new vehicle, if you plan to keep it until it dies, then you won’t need to worry about the resale value.
Few people would go into a clothing store and try to negotiate the price of a pair of jeans, but negotiating the price of a car is practically a national pastime. The following are some tips on how you can negotiate effectively:
- Don’t reveal too much: Don’t let the salesperson know the maximum you can or are willing to spend.
- Avoid being overly enthusiastic: Don’t say, “I love this car and I have to have it”, even if that is how you feel. Try to appear detached and calm.
- Do your homework: Know what is a fair price for the vehicle you are interested in. Utilize websites like kbb.com to find out how much the car you’re looking at is typically worth.
- Search around: If you are buying new, there are probably a few dealerships in your area that sell the model you want. Visit them all and see who offers the best price. If you are buying used and interested in a popular model, you will probably have your choice of sellers as well.
- Go at the right time: You can often get a better deal on a new car at the end of the month or year, with salespeople concerned about meeting their quotas. July-October is another good time to buy a new car since dealerships are looking to clear space for next year’s models.
Ultimately, if you are uncomfortable negotiating, you may want to have a friend or family member help or you can take advantage of Georgia’s Own Carfinder auto buying service.
Source: Balance Financial Fitness
Post written by Linda Willson, Product Analyst
I don’t know about you, but I hate car shopping. I don’t like being pressured by the sales person or having my every move being watched. Also, I never know if I am getting a good deal and could have offered them less.
Searching for a pre-owned car is an even greater challenge, since there are fewer cars available that match the specifications I want, such as year, make, mileage, and options. Of course, reliability is key and is often a mystery with a pre-owned vehicle, as is knowing if you’re getting a fair deal or not.
I have some good news for Georgia’s Own members. Georgia’s Own Credit Union offers a car buying service – Georgia’s Own Carfinder – that takes the hassle out of car buying . The process begins with contacting Georgia’s Own to pre-qualify for a car loan by calling, applying online or faxing in your application, so that you know the price that is within your budget. The next step is that you will be put in touch with our Georgia’s Own Carfinder Member Consultant who will simply locate the new or slightly used car you are looking for based upon the requirements you specify (trade-ins are welcome). If you are not sure about what you want, they can make suggestions after talking with you and determining your driving needs and budget. Last, and perhaps best of all, Georgia’s Own Carfinder will bring the car to you for a test drive and then will deliver the car to the location you choose and will also pick up the trade-in if there is one. Always keep in mind that Georgia’s Own has some of the lowest rates in town, and that Georgia’s Own Carfinder Service has a vast source of dealer contacts and auctions to locate the car of your dreams, meaning you don’t have to spend hours at dealer lots searching for a car or haggling over the price (and as an added bonus, Carfinder can meet or beat almost every dealer’s price).
When using Georgia’s Own Carfinder, there are no high pressure sales. Carfinder will find out what you want, how much you want to pay, and will conduct the search for you. You can still comparison shop at dealerships to determine if you can get a better deal, but there’s a guarantee with the Georgia’s Own Carfinder service: if we can’t beat or match the new car price that you get, we will give you $100!*
The bottom line is that you can get everything from one source-the car loan, the car at the best price, delivery of your car to the place you choose – and there’s a guarantee! What could be easier? When you plan to buy your next car, think of Georgia’s Own Carfinder. I know I will.
These days it seems that so much of our money is spent at the gas pump! We drive everywhere and with a gallon of gas that costs over three dollars, it can get expensive. Instead of spending all of your hard earned cash on fuel, try a few of these steps to reduce your spending.
– Take public transportation when possible.
– If you live close enough to school or work, walk or ride a bike if weather permits. (You’ll also get some nice exercise in at the same time!)
– If you do end up driving to work or school, try to run any errands you may have on the way home so that you can cut back on extra trips.
– Start driving more efficiently by cutting out aggressive driving (rapid acceleration and braking, speeding) and observing the speed limit.
– Remove any excess weight you may have in your backseat or trunk (or front seat for some).
These are just a few ways you can start saving on fuel costs. What do you do to cut back at the pump?
We all know that buying a car can be stressful, but the team here at i[x] is here to help you understand the basic process to getting your own vehicle.
1. How Much?
The first thing you should do is set a budget, then you can start looking for that perfect car. Once you set a budget you will be able to narrow down your focus. And focus is good, just ask Mr. Miyagi.
2. Oh Those Internets!
Do some homework before you dash out looking for that new whip. Cars.com and autotrader.com have lots of used vehicles for you to check out. Also, check the Kelly Blue Book® (kbb.com) and do some research once you find the kind of car you like. It could save hundreds of dollars.
3a. Used Cars
With used cars you can do all your research on the web. Used cars also make solid investments since they are more affordable and do not depreciate nearly as quickly as their brand-new counterparts. After you find the car you want, make sure you get a CarFax® report. You also may want to take the car you really, really like to a trusted mechanic and have them inspect it.
3b. New Cars
If you think you can step out and get a brand new car make sure you shop around the end of the month. It sounds cliché, but they do have quotas and might be willing to give you a better deal on the 29th vs. the 9th. Some dealerships have special departments that work with people over the phone or through e-mail. This lowers the pressure and may make it easier to find the best deal. Also, look online and see if there are any sales or incentives for the vehicle you like.
4. Loan Time
Once you are narrowing down to the car you like it’s time to call Georgia’s Own. One of our friendly loan officers can help you get the process started. Check out the loans section of georgiasown.org for some great info on how to get the right loan.