If you’re ready for a new car, make sure you’ll be happy with the deal you drive at the dealership.
Start by deciding, before you even shop, how much you’re prepared to spend. This is great protection against the lure of the showroom—and you’ll still be thrilled with your new car.
One guideline is to shoot for a car payment no more than 20% of your disposable income. So after you deduct all your debts and living expenses, calculate one-fifth of the balance. The best scenario is for this amount to cover your car payments as well as insurance and gas.
Now think about how long you intend to make those payments. No surprise here—the longer you pay it back, the more you’ll pay overall. Stretching the loan out reduces each monthly payment, and that can be appealing. But you will pay more in total interest.
Use the car loan calculator at sunfederalcu.org to play with various loan terms. Then be honest with yourself about the impact on your bottom line and your other financial goals. A Sun Federal CU loan officer can help you walk through this step and explain your loan options.
Arrange for a pre-approved loan with your Sun Federal CU loan officer. This means you will go to the dealership and effectively bargain for your new car with cash—the ideal way to gain leverage at the dealership while also sidestepping pressure to finance the car there.
Now, does it matter when you go shopping? Here are a few timing tips:
Your Sun Federal CU loan officer has more insider car-buying insight for you. Stop in or call (800) 786-0945 today.
Select a category to find an article or video of interest.