Aug 01, 2017 / Auto & RV
So, you’re on the hunt for your first car. Aside from having to warn the neighbors about your newfound freedom on wheels, the prospect of owning your own car is exciting, but it can also be a bit scary, especially if this is your first experience with an auto loan. If you’re ready to hit the open road, but you aren’t quite sure which avenue to take to get there, here are a few steps to financing your first car.
Before you can get behind the wheel of your new car, it’s important to understand exactly where you stand in terms of credit worthiness. This is important for several reasons. It will give you an idea of your loan rate (a high credit score may help you get a lower interest rate, saving you money on monthly payments), as well as a general sense of how much you can borrow. There are many websites that allow you to check your credit score for free, including Credit.com.
Now that you have an idea of what your bank or credit union will look at when you apply for a loan, it’s time to visit your lending institution to get a quote. Some lenders have really great deals on car loans during the summer months, including this Patriotic Payment loan from Utah First. So, look around and find a quote that matches your lending needs.
Once you know how much you can borrow, it’s time to make a plan to set money aside. Set up a spreadsheet on your computer, or use existing budgeting software, to find out exactly where the car of your dreams (or at least the car of your dreams you can afford right now) fits inside it. Talk with your lender and go through different scenarios, including length of loan, down payment, and monthly payment options. In budgeting, we counsel people to consider what their insurance payment will be too. If you’re like most people, you’ll have to skimp here a little and save there a little to afford a car payment, but that’s why budgeting is so important. It’s not the most enjoyable part of the car buying process, but prioritizing your income is an essential step on the road to responsible car buying.
Okay, now comes the fun part. Take your credit score, loan quote, and a handy-dandy auto loan calculator and start shopping for cars. Many times your auto lender will have contacts at various car dealerships, so ask for referrals during the initial loan process. It’ll save time and hassle in the long run and streamline the financing process once you decide on a vehicle. In other words, it’s a good idea to visit the showroom with your financing already in place.
Congratulations! You did it. You bought your new car and secured your first auto loan. It’s a little work and a lot of responsibility, but financing a car is a great way to continue to establish your credit and discipline your budget. Plus, you’ve got a new car. How great is that? Now, have fun, be safe, and be responsible, both with your loan and on the roads!