Are you hoping to score a deal on a car this Presidents’ Day? Like other major holidays, Presidents’ Day is a great time to buy a car as many dealers will run promotional events to get consumers in the door. But before you decide to make a big purchase, our credit counseling advice is to make sure you are fully informed.
Know your credit score before you look to buy a car.
Your credit score is an important factor of the car buying process. Know what you need to do in order to keep a healthy credit score. When looking at a credit application, banks look for an established credit file. Any past auto loans, mortgages and any delinquent payments will absolutely be considered when applying for an auto loan. Banks are more inclined to approve applicants with proof that they pay their bills on time over someone who has no file and/or hasn’t established any credit.
A good rule of thumb, would be to have five lines of well-paid credit, with at least some sort of installment loan, or loan that requires monthly payments to pay back. Typically, lenders want to see at least 2-3 years of credit history as well. Once your credit is in tact, you’re ready to start your search!
Research and know your car priorities.
To begin, it’s very important to investigate the estimated value of the cars you’re interested in online and compare prices with local dealerships. There are great resources like TrueCar and Kelley Blue Book that allow you to check out the worth of various new and used motor vehicles.
- Do you want a pre owned car?
- Are you looking for a utility vehicle or sedan?
- Is safety a priority for you?
- Is fuel efficiency a major factor?
- Will you be driving long distance or need towing capacity?
Be realistic with your car buying budget.
If you plan on financing, it’s good to have a budget in mind of what you can realistically afford. You don’t want to get yourself into unnecessary credit card debt buying a car you don’t have the money for. Do your research, and shop around for rates. Determine the best rates and terms of financing through the dealership as well as your banking institution. Banks offer both new and used auto loans and can be a great option.
- What are you willing to spend?
- Can you commit to $15k or $35k?
- What monthly payment can you afford?
After you have calculated the appropriate numbers in your head and have decided on what you’re looking for, you will be confident entering the dealership. Now comes the fun part, picking out your new ride!
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.