Love Your Car AND Your Loan
There are few things that feel as rewarding as getting a new vehicle! Often times, vehicle loans are what makes it possible for many Americans to afford the luxury of a new or even used set of wheels. If you’ve been obsessively searching the internet for your new ride check out these financial tips to help make sure that you will love your loan as much as your new auto purchase!
Have a good mind-set to get a good loan
Once you’ve found the car you’ve been searching for, arm yourself with the tools necessary to get a loan that won’t be a burden on your life! In 2017 millions of Americans defaulted on their car loans, which can lead to repossession of the vehicle, a plummeting credit score and other adverse reactions to your financial health. Make sure you are at the right point in your life where purchasing a vehicle is the sensible thing to do based on your monthly income, credit score, additional debts and other monthly costs that might be more important. You should drive your vehicle well past the point of pay-off and feel good about making your payments each month knowing that your new car can be an investment on your quality of life.
Save up for a down payment
According to Autotrader.com a 20% down payment is suggested for car loans. This amount may seem out of reach, especially if this is your first car and you’re not trading anything in, but a down payment is always a good idea. Unless you are in an emergency situation that requires you to get a new vehicle ASAP it might be best for you to put your loan application on hold and figure out how to save more to put towards your new vehicle. Even saving a few hundred bucks per month can make a big difference towards your down payment once you get to the dealership. Check out this easy loan calculator to help you determine how much you should put down and what your monthly payments might look like!
Don’t bite off more than you can chew
When you’re looking for your dream vehicle don't let your loan sway too far from your mind. After a couple of years, you might find out that your loan is now “underwater”, meaning that you owe more than the car is worth. This is common and isn’t a reason to feel badly about your car or your loan. Just continue with your payments on time, keep up with regular maintenance, be a safe driver to avoid any accidents or fender benders and do whatever else it takes to maintain the quality of your vehicle. When considering your loan and how much you can afford don’t forget to factor in the price of gas, regular maintenance like oil changes, and the fact that you will likely need new tires within the lifetime of your car and loan. These things add up, but with proper planning paying your loan and other fees each month is something you can feel good about.
Refinance when available
If you’ve already purchased your vehicle and didn't do your research it's not too late! Know your credit score and the original rate on your loan, then start looking into refinancing. It is never too early to refinance your vehicle. In fact, the younger your auto loan, the more a refinanced loan can save you! Auto loans typically have an early term ballooned interest structure. Refinancing can be done completely online, even if you are not currently a Hughes member. A new or used vehicle is a big and important purchase!
Whether you already have a loan, are a first time borrower, or are just starting your search for the perfect set of wheels, use these tips to make sure you'll love your loan.