What to Know When Getting Your First Car Loan

Getting an auto loan for the first time can be a daunting task. There’s obviously quite a bit of money on the line, and the new or used car loan will have a direct impact on finances for years to come. As such, it’s important to know how to get started, and what types of steps to take. Use this guide to get started and learn more about obtaining auto loan financing for the first time.
 
Many first-time car buyers make the mistake of walking straight into the dealer, first things first. However, that’s not the smartest way to go about getting a new car loan. Before walking into that dealer, get pre-approved for auto loan financing from an outside source. Not only will you find out how much you can afford, but you will have a better understanding of the monthly payment you can afford and the term of the loan, but you will also have an understanding of what your lending credit score is and how it affects the rate and terms offered to you. Most car dealers just want you to tell them what you want the monthly payment to be, but fail to disclose the rate and term of the loan until you have decided to purchase.
 
By getting pre-approved dealers treat you as a buyer that’s ready to make a purchase, and there will be less hassle. Plus, car shoppers will generally get better all-around deals from outside lenders as opposed to financing directly from the dealer. With a pre-approval in hand you become a cash buyer and therefore have more negotiating power on the deal.
 
Don’t forget to weigh different potential auto loan payments and terms. First-time car buyers are often confused about how many years their loan should be. The longer a loan, the lower each monthly payment will be. But that’s also a longer period of time that interest is being paid, and too long of a term could leave consumers in a position of outlasting the value of the vehicle while still making payments.
 
Research is always the key to the entire process. This means researching the auto loan rates that are available from different lenders and researching the difference in invoice pricing vs. manufacturer retail pricing. This information is needed for each vehicle and the myriad options they come with. You also want to research to see if the manufacturer or dealer is offering any rebates or incentives on the model you are looking to buy.  Armed with this information you will now have the power to negotiate your best deal without feeling intimidated and ensure yourself of no surprises!
 
BFG Federal Credit Union helps first-time car buyers with great rates and great information on auto loan financing and new and used auto values. Whether it’s for a new or used car loan, first-time buyers can feel confident working with BFG Federal Credit Union, which services all who live, work, worship, attend school or volunteer in Summit County, Ohio. Learn more about the latest auto loan rates by visiting BFGFCU.org.

Contact Information

Mike Owens

President/CEO

BFG Federal Credit Union

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