An automobile is a major investment. Just think about it: In the last 10 years, have you bought anything that costs more than a car? A house or your kid’s education, maybe. Yet, unlike a house, a car is not going to appreciate in value; and unlike an education, an SUV is not going to increase your offspring’s earning potential.
A car isn’t an investment after all, because you’re not going to receive a return on it. It’s an expense, and the best you can do is to get the maximum use and pleasure from the money you spend. Getting the most out of your car is a matter of careful maintenance. Getting the most out of your money is a matter of getting a good price on the car and a good deal on the related financing.
Negotiating a good price on your car can be stressful, but arranging for a good deal on your loan might not have to be. When they think of car loans, most people think of banks and dealer financing—but your credit union may offer the best, most flexible terms and the fastest loan process that’s available to you:
• Before you go shopping, visit Horizon Credit Union to get pre-approved for a loan. Pre-approval will mean you have one less thing to worry about when you find the vehicle you want.
• The rates that Horizon Credit Union offers on auto loans are probably lower than those that are offered by most banks and car dealerships in your area. With a variety of options and programs, Horizon Credit Union has a solution for almost every borrower.
• Refinancing an existing loan on the car you currently drive could lower your rate and monthly payment, putting more money in your pocket—a good thing at any time, but especially in a troubled economy.
• Horizon Credit Union offers GAP Insurance that can help you insure your vehicle for its replacement value in case of total loss, rather than the cash value that is more typical of the policies that are offered by most insurance companies.
Common sense dictates that you’ll want the lowest interest rate possible regardless of whether you’re buying a new or used car. After all, the ultimate goal should be to pay off your car with the least amount of money in the least amount of time.
Obtaining a great low interest-rate loan starts way before you hit the showroom. It begins at home with an assessment of both your financial situation and what you really need in a car.
The first thing to do is take a look at your credit report. You’ll want to have a good idea of where you stand before you talk to your credit union loan officer. The better your credit, the more financial program choices you’ll have. If your credit is borderline and you have some time before you need that new car, invest some time to clean up any possible problems.
Next, it’s important to figure out what you can afford before shopping around. One good rule of thumb is to spend no more than 10 percent of your total earnings toward your car expense. Another good rule to follow is to finance no more than 80 percent of the price of the car. If you finance more than 80 percent, you may find yourself owing more on the auto loan than you could get by selling the car or trading it in.
You’re only ready to start shopping for your car and auto loan once you’ve determined how much you can spend on it and how much of a down payment you can make. Using your head first, instead of letting your emotions lead you, may not put you in that red convertible you’ve been dreaming of now, but the financial payoff from saving money might get you there a little later.
To inquire about how we can put you in the driver’s seat for less, call 801.451.5064, or stop in at your nearest credit union branch today.