Auto Financing for First Time Buyers

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Auto Financing for First-Time Buyers

If you’re getting ready to buy your first car, there’s no doubt that you’ve already put a lot of thought and consideration into the process! Once you’ve decided what type of car you want, and all the features you need, it’s time to get into the details of how you actually plan to pay for it. Auto financing can sometimes seem like the most intimidating aspect of buying a new car. While buying a vehicle is definitely a big purchase, it can be a lot less daunting than it seems once you learn a bit about the process. Plus, there are lots of ways to prepare yourself ahead of time, and reduce stress surrounding auto financing in the longrun. Below, we’ll be sharing some helpful tips and information about budgeting, auto loans, and more, to help make your dream car a reality! Read on to learn more about auto financing for first time buyers!

Set A Budget

Before you even visit the dealership, it’s important to have a strong understanding of your budget. If you know how much you’re willing and able to spend in total, it will go a long way in helping you narrow down your options once you actually start looking at which car you might want. One common mistake is to only focus on the sticker price, and to lose sight of your monthly payments. When you’re looking at the sticker price, it represents the total cost of the vehicle. However, that can feel a bit abstract, since what you really need to know is how much you can afford to pay each month until the car is paid off. When you’re calculating your budget, make sure you break down the price so that you’re aware of the cost per month, and figure out the number of monthly payments you’re prepared to make.

Know Your Credit Score

If you’re planning to apply for an auto loan, it will help you to have all your information ready to go. One of the most important factors that comes into play when applying for a loan of any sort is your credit score. If you’re a younger buyer, you may not have had as much time to build up your credit, or may not have traditional credit at all. Even if you do, you may not be in touch with what your current score is. There are several different ways to get your credit score, and you also have some options on how to boost your score before you apply for your loan. Go through and make sure you don’t have any outstanding bills. Things like credit card bills or medical co-pays or other personal bills can negatively affect your credit if they go unpaid, so paying off what you can will only help your score. If you’re still unsure, having a parent or spouse co-sign on your loan can be a great way to get the finances you need! Whatever your situation, our finance center is here to help each and every customer with their financing, even those with less-than-perfect credit.

Shorten Your Term

As we mentioned above, the total price of the vehicle doesn’t necessarily paint the whole picture of what you’ll be paying month-to-month. When you finance your car, you’ll setup a plan wherein you agree to pay a given amount per month for a certain number of months. That number of months is called the term, and this is one area where you have some options in your financing plan. Essentially, you have the choice to pay a lower monthly payment for a longer term, or a higher monthly payment for a shorter term. If you’re financially ready to do so, opting for the shorter term can ultimately benefit you, as it will prevent you from accruing additional interest. However, you should consider whether you can keep up with the higher payments each month before you jump into this decision, as you want to set yourself up for success with monthly payments you can afford. However, wherever your budget lies, try to shorten your term to whatever length is most realistic for you, and it could save you some money in the long run!

Save Up for a Down Payment

Another area in which you may have some flexibility in paying for your car is in your down payment. The down payment is a portion of the total cost of the vehicle that you pay up front. It is not included in the monthly payments to follow, and is instead paid as one lump sum. This means that the more you can put down, the less you’ll have to pay off later. Again, this can be a helpful way to avoid accruing interest if you’re able to make a larger down payment. As always, it’s important to align these options with your own unique budget, as paying a down payment you can’t really afford will only throw off your budget for your monthly payments later. However, if you have the option, it serves you to pay as much as you can up front, and enjoy the benefit of lower monthly payments in the future.

Visit Our Finance Center at Temecula CDJR!

Here at Temecula Chrysler Dodge Jeep Ram, we want to help you through every step of your car-buying process. If you have any questions about financing, budgeting, or any other aspect of your purchase, don’t hesitate to reach out to our in-house finance center! Our experts will inform you of all your options, as well as any of our current specials and incentives so that we can help you get a great deal on your purchase. You can even apply for financing right here online, and get pre-approved from the comfort of your home! Plus, you can find tons of new and pre-owned inventory here at our dealership in Temecula, California, and view all your options in one place. From all of us here at Temecula CDJR, we look forward to working with you soon!