Getting into your first car is an exciting time for most. However, many young consumers go into a car purchase with very little knowledge on what is needed and what they can do to ensure that they are getting the best deal possible.
If you are about to purchase your first car, here are some tips to go by:
Check Your Credit Score and Report
Your credit score is one of the most important factors that impacts whether or not you qualify for an auto loan and at what interest rate.
If you haven’t already, check your credit report to make sure there are no errors.
One simple mistake could lower your score as much as 100 points, leaving you stuck with high-interest rates from every single lender.
Taking time to conduct research on your next car is vital.
You will want to ensure that the car you are purchasing will be reliable and able to handle what you ask of it.
You can use various websites to read consumer reviews on certain models of cars.
Auto lenders want to ensure that consumers are able to pay off their auto loans in full.
Most experts agree that no more than 20% of your total income should go towards making an auto loan payment.
If you haven’t already, sit down and budget what you can pay for an auto loan.
Be sure to include other costs such as insurance, maintenance, and registration into your calculations.
Big Down Payments
Almost all lenders will ask for a down payment of 10% of the vehicle purchase price, or $1,000, whichever is less.
If you have healthy credit, some lenders may not require this. However, a large down payment can help you save on interest expense throughout the life of the auto loan.
If you have bad credit or new credit, chances are you will be asked to provide a cosigner.
A cosigner is someone who “lends” you their credit to help you get approved for an auto loan.
Be sure whoever you ask to be your cosigner is somebody you can communicate with openly.
A cosigner has no legal permission to take your car from you, as they are only listed on the financing documents.
If you are looking to buy a new car but have less than perfect credit, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations.
Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!