Tips for Financing Your First Car | Fort Wayne, IN
You have reached an exciting milestone in your life and want to buy your first car. Because cars are expensive, the majority of shoppers choose to take out a loan. Unfortunately, if you have never had a car loan before, it can be difficult to get one. Here are a few tips on how to get started on financing your first car.
Build your credit
If you have little to no credit history, it will be hard to get approved for a loan. Take some time to build up your credit. Try applying for a low-limit credit card that you know you can pay off each month. You can also talk to your bank and credit union and see what they suggest for you. When you are ready to apply, we can help find you the best rate.
Keep the loan short
While many car loans have a term of 60 months, you should try to keep your first loan short. Your monthly payments will be larger, but it will help you save hundreds or even thousands of dollars in interest costs. It will also help prevent you from owing more than your car is worth.
Make a budget
Know how much you can afford to spend on a car each month. Don’t forget to account for things like fuel costs, insurance, and maintenance.
Have a down payment
The more money you put down upfront, the less you will have to borrow. Finance experts recommend a down payment between 10 and 20 percent of the car’s purchase price. A larger down payment will help you save money on interest and could help you score a better interest rate.
Consider a cosigner
If you are struggling to get approved for a loan on your own, talk to someone you trust, like your parents, and ask them if they would consider cosigning on a loan. Be sure you make your payments on time, so they don’t have to foot the bill.