Four Ways You May Be Able to Finance Your First, New Car Purchase
If you are looking to finance the purchase of a new car, there are many choices available to you. The size of the loan will largely be a function of the size of your income, and the interest rate will relate to your credit score. But as for the choices you have for financing the car, there may be several options open to you. The following are four of them.
Your credit union
Not everybody is a member of a credit union, but if you are, this should be your first step in financing a new car. Credit unions are well known for offering some of the best terms for car loans. Credit unions are owned by their depositors and have lower costs than commercial banks, so they can pass savings on to their members. Your credit union can tell you what the terms of financing will be for you.
If you do business with a commercial bank, you should inquire about a car loan. If you have accounts at your bank, they can be seen as assets. Accounts such as a savings account or a retirement account can mean your bank will give you better terms for a car loan than another bank would.
Multiple quotes online
There are websites that allow you to input all of your financial information, and then several lenders can provide quotes for your car loan. This method allows for lenders to compete for your business and will provide you with the best quote given your financial situation, with the exception of a credit union and perhaps your bank.
Many dealers carry their own financing, especially for their new cars. The terms may seem attractive, but often they want a minimum credit score, and they want you to be a homeowner. However, there are first-time buyer programs that dealers commonly offer. These programs are not always favorable compared to other options, but if you need a car, this may be something to explore. The key to success is to look for the most popular models on the market. You'll need to do your homework, but if you can find a slow-moving, low-priced model of a new car, the dealer and manufacturer will be motivated to move the inventory. Sometimes a car like this will have a cash-back rebate that you can add to your down payment.
Ideally, you want to get your financing in place before you shop for a car. This way you will know exactly what you can afford. You should be prepared to give a down payment of 20 percent for the car.
When you're looking for a new car loan, there are many places you can go to for help.