Tip of the Week
Here are five tips from Joe Pendergast, assistant vice president of consumer lending at Navy Federal Credit Union, to get the most car for your money with a payment you can live with:
Step 1: Know what you can afford: Your first step when making any large purchase should be to assess your current financial situation. Review your monthly income, subtract all anticipated expenses, and make sure there's money left to not only afford a car payment, but also to contribute to your savings. Adding a car payment to your monthly budget shouldn't leave you without money remaining for things like groceries or unexpected expenses.
Step 2: Review your credit inventory: Take a comprehensive look at your current debt. Are you in good-standing on all prior loan commitments and credit cards? If not, it may be difficult to obtain financing at a low interest rate, which will result in a higher monthly payment. So, if you're behind on other loans, take the steps now to get in good shape to purchase a car. Go back to step 1 if need be. Once you've made sure all your debts are in good-standing and that you're financially able to take on a car payment, you're ready for the next step.
Step 3: Check your credit report and score: Getting a car loan at the best possible rate requires a good credit score. Before applying for an auto loan, it's best to get a copy of your credit report. Although financial institutions will check your credit when applying for a loan, having your report in advance gives you the chance to correct any discrepancies before applying. This leads to a quicker application process and prevents denial because of a credit report error unbeknownst to you.
Step 4: Shop around for the best rate: Before walking into a dealership, check interest rates at different lenders and read the fine print for any hidden fees. The key to a good auto loan is striking the right balance between the rate and how long to finance the loan. New vehicles will have a lower interest rate, but the monthly payments will be larger. Look for the shortest term you can afford without breaking your budget.
Step 5: Get pre-approved: Once you've shopped around, increase your buying power by visiting your chosen lender and getting a quick, pre-approved loan. A salesperson will be more willing to bargain if how much you've been approved for and what are willing to pay has already been determined. Keep your payment threshold in mind and allow your pre-approval to lead discussions at the negotiating table. It will result in purchasing a car at a price that's right for your budget.
According to Kelley Blue Book, here are the coolest cars under $25,000: 2014 Scion FR-S Ford Fiesta ST Jeep Wrangler Volkswagen GTI Chevrolet Camaro Mini Cooper S Ford Mustang Honda Civic Si Fiat 500 Abarth Mazda MX-5 Miata
Did You Know
With warm weather on the way, vacations, sporting events, camping and other outdoor family outings arenít far behind, and you can never have too much cargo space. Late-model mini-vans give you the passenger and cargo space of a van with the driving feel of a car. It is truly the best of both worlds. Right now is a prime time to save loads money on a high-quality, low-mileage, used minivan. There are hundreds of great minivan bargains available in March.
- S.M. Darby/BestRide.com
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Tip of the Week