5 Things to Do When You First Start Considering Buying a New Car
Buying a new car is always going to be exciting, but that financial transaction can become very complicated if you don’t plan ahead.
Luckily, with a solid plan in place and a few simple preparations, you will be able to get the perfect car at an excellent price.
Check Your Credit
The very first thing that you should do before making any large purchase is to check your credit score and history.
A derogatory mark on your credit history is going to increase your interest rates, and that will cost you quite a bit in the long run.
If there are derogatory marks on your credit score that shouldn’t be there, then you will need to contest them.
Pay Off Large Debts
When an organization is calculating your credit score, it is going to take a look at any debt that you have.
To boost your credit score and potentially lower your interest rates, you should try to tackle at least a few of your larger debts.
Paying off a credit card or another small loan will make it much easier to get approved for a car loan.
Build a Down Payment
Even if you have an excellent credit score, you should still save up for a down payment.
Lenders will be much more likely to offer you a great loan if you have some type of money to put down.
While every situation is slightly different, most experts agree that the down payment for a vehicle needs to be at least 10 percent of the total cost of the vehicle.
Explore Lenders
Once you have checked your credit and started building a down payment, you can then take a look at lenders.
A reputable auto loan lender should be able to offer you excellent rates as long as you have a good down payment, verifiable income, and decent credit score.
Getting pre-approved through a third-party lender is typically a much better option than getting a loan through a dealership.
Start Tracking Vehicle Prices
Vehicle prices fluctuate throughout the year, and you might want to wait for a sale if you would like to save some money.
In addition to the sales that usually take place around major holidays, many dealerships also try to get rid of their old inventory at the end of the year.
Being patient during the buying process could result in huge savings.
As a general rule, you should try to tackle most of these steps a few months before you plan on buying a car.
Boosting your credit and getting a few pre-approved offers will lower your interest rates and potentially save you thousands in the coming years.
Category: Car Purchase
