5 Auto Loan Tips for First-Time Car Buyers
Buying your first car is an exciting time. Besides driving around town in a new set of wheels, a car purchase is a great way for anyone to start establishing their credit by paying off an auto loan. Did you know that each month you make your payments on-time, it helps your credit score? Many first-time car buyers are unaware of how to approach their first auto loan. Here are 5 tips to get you started.
- Know Your Total Budget
Before you start looking for a car, the first thing you should do is determine your overall budget. How much are you willing to spend? This number should account for any dealer fees and taxes you might encounter beyond the sticker price. That way you only shop for what you can afford.
- Consider a Down Payment
Part of determining your overall budget is deciding if you will be making a down payment. If you’ve saved up money for a down payment, it could lower your monthly payment because it will lessen your loan amount. At County Federal, we will work with you on a loan that you can feel comfortable about.
- Set a Monthly Payment Limit
A good number to keep in mind is how much you’re willing to spend on your monthly car payment. Add up your total monthly expenses and subtract the total amount from your monthly income. That number is what you can spend, though it’s not necessarily how much you should spend. Having some money left over every month is nice so you can pay for unexpected expenses without putting them on a credit card.
- Check Your Credit Score
Have you checked your credit score lately? If you’re looking to buy a car soon, it’s smart to know your credit score. Your credit score will determine the interest rate you pay on your loan. If you have good credit, you’ll get a better rate. There are online tools that allow you to check your credit score for free, like creditkarma.com and freecreditreport.com.