Beginner's Guide to Car Buying
Buying a car can be exciting when it's your first time. However, that excitement can quickly turn to stress if your not fully prepared. Before walking into a dealership to make that big purchase, you should consider how much downpayment will you have? How much payment can you afford? The process doesn't have to be scary. Just follow our tips.
Know Your Budget
Be realistic. You may want that fully loaded, brand new, super luxurious SUV that is advertised at $700/mo with $5,000 down but your checkbook balance screams "no way!" Chances are you are going to have to be conservative. Maybe your first car ends up having to be a pre-owned, based model SUV or car. Realistically figure out what monthly car payment you can afford and work with that.
You can definitely simplify the whole process by getting pre-approved before you go shopping. This step could save a lot of heartbreak as well. Do you have a car in mind now? If so, you can get pre-qualified here Finance Application.
Aim For At Least A 20% Downpayment
A good rule of thumb is to try to put down 20% of the car’s total value. This is for several reasons. First, the higher your down payment, the lower your monthly payments will be. A higher down payment could also show your lender that you are responsible, since you were able to save a sizable amount and could lead to a lower interest rate. Lastly, cars depreciate in value very quickly after you drive them off the lot. The higher down payment helps keep you financially stable and assists in keeping you from potentially being upside down on your loan.
If you would like to speak with someone further regarding possible scenarios for your specific situation, please contact one of our representatives M-F 10am - 6pm CST at 763-233-0477.