When making large purchases, it’s crucial to know all of your options and have experts in your corner. That's why Elements is here with five of our best tips to help you buy smarter when searching for your next vehicle.
Don’t Buy Too Early
It’s easy to be tempted by a shiny new car, but unless you’ve completed your payments on your current vehicle or have cash on hand to pay off the balance, it’s usually best to wait. Oftentimes, dealerships will give you an option to pay off your current loan, yet this balance is usually just added to your next auto loan.
Understand Your Credit Score
Before applying for a new auto loan, research your current credit score as it will have a large impact on the rate your lender will offer you for your new ride. If you’re an Elements member, you can easily find your credit score within our Online and Mobile Banking platforms. Plus, our credit monitoring tool allows you to see how your score is calculated and gives tips to improve it, leading to better rates and fewer fees over time.
Know What You Can Afford
Many financial advisors suggest that your total auto expenses should not exceed 15% of your net pay. This includes all vehicle-related expenses such as loan payment, insurance, gas, license plates, and maintenance (tires, oil changes, etc.). Make sure you have accounted for all these things before you commit.
Do Your Research
Once you sign the loan documents and leave the dealership, the new vehicle is yours. Even if the car’s condition has been misrepresented, you will still be responsible for the vehicle. Research is especially important for used cars without a warranty, as you’ll need to pay for any maintenance or repairs out of your own wallet.
Get Preapproved for a Loan
It’s critical to get preapproved for an auto loan before getting anywhere close to a car dealership. This information gives you buying power at the dealership and the salesperson will meet or beat your rate to earn your business.
Have questions or need trusted advice? Our credit union experts are always here for you. Contact Elements Financial for support in all aspects of your financial life.
This information is provided for informational purposes only. It does not constitute legal, tax or financial advice. Consult with your tax, legal or financial adviser before taking any action.