For those that need a way to get from point A to point B, owning a vehicle is an appealing necessity. Whether you are purchasing your first vehicle or you have prior experience, it is a big investment. Prior to purchasing a vehicle, there are things to keep in mind that can set you up for success.
1. Determine the Duration of the Loan
If you decide to borrow the money to finance your vehicle over a period of time, you should first determine the duration you will need to pay off the loan. Do you have the means to pay off the loan relatively fast or will you need the time to progressively pay it off?
Upon choosing a short term auto loan, you are committing to a higher monthly payment. This payment option requires careful planning and budgeting. If you are currently living from paycheck to paycheck, a longer-term loan might be a better fit so you can avoid the loan becoming a large chunk of your monthly budget.
2. Measure the Additional Long-Term Costs
Aside from the dollar amount of your vehicle and the payment plan you arrange, it can be important to consider the additional costs associated with owning a vehicle before committing to it.
For the specific vehicle you have your eyes fixed on, determine how much your monthly auto insurance will cost, how much it will cost to register in the state you live, and maintenance fees. If the state you reside in is infamous for having high gas prices, it can be ideal to measure how much you will spend on gas per month compared to driving an electric vehicle. As vehicles vary in tank sizes to notoriously expensive makes and models maintenance costs, consider the long-term investment.
3. Get Pre-qualified
When it comes to buying an auto, we recommend getting pre-qualified for the loan before making your way to the dealership. This tactic gives you more buying power as the dealership will know that you have already qualified for an auto loan.
Whether you are buying a used or new vehicle, Camino Federal Credit Union will work with you to ensure you receive personal support. We want our members to find the right fit that serves their needs. To speak with one of our auto loan experts, you can contact us at caminofcu.org or give us a call at 800-835-3400.