The first time you purchase a car could be a special milestone. To help simplify the process and put you on track for a bright financial future, reputable financial institutions like Camino Federal Credit Union offer programs like auto loans for first-time buyers to help members like you start their financial journey on the right foot. Presumably, if this is your first time purchasing a car, it is likely your first time applying for financing. Explore what to know about first-time auto loans:
What to Know About Auto Loans for First-Time Buyers
From understanding what a first-time auto loan is to some of our top tips that could help you get better loans, let’s get into it. Here’s what you should know about first-time auto loans and what you can do to have the best experience possible!
What Are Auto Loans for First-Time Buyers?
These programs cater specifically to people purchasing their first vehicle and can provide financing. Auto loans for first-time buyers are specifically designed to help buyers with little or no credit history and often have less stringent approval requirements than traditional auto loans.
To learn more about the ins and outs of a first-time auto loan, our Member Advisors at Camino can help you determine the ideal financing option.
What to Consider About Auto Loans for First-Time Buyers
As a first-time buyer, there are a few considerations before applying for financing. Before you apply for your first-time auto loan or any car loan for that matter, remember to:
- Review your credit history
- Compare interest rates
- Research vehicles and assess needs
- Establish a clear budget
- Collect the necessary documentation
- Get pre-approved to get the best possible price at a dealership
- Consider additional fees
- Determine if you want a new or used car
- Save for a down payment
Fortunately, when pursuing auto loans for first-time buyers with a respected financial institution like Camino, you can rest assured you will receive great rates and competitive terms, and we can help you understand budgeting and requirements.
What Are Requirements for Auto Loans for First-Time Buyers?
It is also important to keep in mind that all loans have requirements to obtain approval, and auto loans for first-time buyers are no different. Common requirements for buying a car include:
- Being at least 18 years old
- Proof of employment and income
- Your social security number
- Proof of auto insurance
On top of that, when you partner with a local financial institution like Camino to get a first-time auto loan, you don’t need any previous automobile credit to qualify. Still, the car you are purchasing should only be ten years old or newer.
Tips for Getting Better Auto Loans for First-Time Buyers
Whether you are trying to get more money for your first-time auto loan, better rates, or more options, there are three ways that could help you get the best possible loan:
Increase Your Down Payment:
One way to reduce the overall cost of auto loans for first-time buyers is saving up to increase your down payment.
Typically, you want to have at least 10% cash to put down when buying your first car, but putting down more will be a huge help. Increasing your down payment could help you negotiate a better interest rate, build equity faster, and decrease your monthly payment.
Build Your Credit
Making an effort to build strong credit could take some additional time, but it could be one great solution to getting the most out of your loan opportunity.
During the pre-approval process, your credit score will be one of the largest factors in determining what size loan you qualify for. If you have a credit card or have had a loan in the past, you have at least some credit history.
You can take several steps to improve your credit score by paying off your debt and making consistent on-time credit card payments. A better credit score could translate to better rates because you have proven that you will pay the loan back in a timely manner.
Cosign Your First Loan
Consider a cosigner on your first-time auto loan. Having a cosigner allows you to benefit from a family member or friend with a better credit score.
By having a cosigner agree to be accountable for debts you can’t pay, you could gain access to a larger loan and even lower rates.
Contact Us to Start Your Financial Journey and Learn More About Auto Loans for First-Time Buyers
If you are about to purchase your first car, it can be helpful to work with a respected local financial institution like Camino that is committed to its community’s collective financial success. Let us help put you on the path toward a bright financial future.
At Camino, we have been serving the Montebello community since 1941 with financial products tailored to each member’s situation and sincere, attentive guidance. We are here to help you understand this process and what to expect.
To enjoy competitive rates and terms from trusted loan advisors, visit us at caminofcu.org, call us at 800-835-3400, or visit our First Time Auto Loan Program page to learn more about our first-time auto loans.