Auto Loans: What to keep in mind

It’s time to buy a car. Sounds easy, right?

The truth is, it’s not. It’s far from that. It’s closer to excruciating at times. The thoughts race through your head, “Which car do I need? Which car do I want? Is this the right decision?”

There are several things to factor in before and while you’re at the dealership. Here are some key points to consider before you sign the deal.

1. New or used?

A new car may be seamless and flawless, but you’re going to pay for it upfront, during the life of the loan and once you sell it. Cars depreciate quickly. As a Golden Rule of thumb they drop $5,000 the second you drive off the lot, no matter if they’re new or used. For the price of a new 4-cylinder car, you can get a used vehicle that maybe be a few years older and has a more powerful V6 engine or better options.

2. Don’t settle for hometown dealership

Be willing to travel at least an hour, maybe more, to look at vehicles to see if you can get a better deal on the same type of car. Settling for looking at vehicles within a certain range of your home may cost you a few thousand dollars on the sales price and the life of your loan.

3. If you’re buying used, thoroughly examine the vehicle

Make sure you’re Ok with a used vehicle’s condition, including any damage, before you sign the deal. If you see any damage that rubs you the wrong way, get the dealer to repair it for free as part of the deal or find another option. If they refuse, walk away.

4. Get pre-approved

Apply for a Pre-Approved Auto Loan through a credit union! This makes bargaining seamless and dependent on the bottom-line price as opposed to a negotiation on monthly payment.

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