Purchasing your first car should be an exciting and rewarding milestone in your life. Before you walk into a dealership, there are a few things you should know to help make financing your car a stress-free experience.
Budget Your Monthly Car Payment
When it comes to financing your car, it can be smart to start off by spending around 15% or less of your monthly income on your car payment, mitigating the risk of debt in other areas. By budgeting a small portion of your paycheck in the beginning, you may quickly find that you have more wiggle room and can put more money toward your car payment. With an auto loan, you can sometimes find a more favorable financing rate through a private lender such as a credit union.
Understand How Car Loans Work
Most people do not have the financial means to pay for the vehicle they’ve been wanting upfront and in full. Instead of dealing with the burden of trying to save up for a car, an auto loan allows you to finance the vehicle over time, allowing you to be able to purchase a new car sooner.
When you take out an auto loan, you receive your money in a lump sum, then pay it back over time with interest. How much you borrow and the amount of time it takes you to pay it back are things to consider. However, vehicles can be a necessity for most people and it can be a beneficial investment for your ability to get to where you need to go. This is why Camino Federal Credit Union offers members low and competitive interest rates.
Save Yourself the Stress
Purchasing a car does not need to keep you up at night. Research indicates that 91 percent of new car buyers used a loan to finance their car over the last 12 months. Good things come with time and patience, and you can end up getting that car you want