Empower Blog

May 24, 2021

Tips to Streamline Your Next Car Purchase

With summer just around the corner, many of us are daydreaming of hitting the open road and taking a vacation. While the effects of the pandemic have created a seller’s market for new and used vehicles, the demand for used vehicles is high, which could be good news for your trade-in value. Plus, you can take advantage of upcoming holiday sales, such as those often held around the Memorial Day and Fourth of July weekends. Read on for a few more tips to help make getting into your dream ride a breeze.

Set a Budget

Finding out what you can comfortably afford to spend on a monthly auto loan payment should be your first step in deciding on a new car purchase. To get an idea of how a vehicle loan will fit into your monthly budget, start by adding up all of your current monthly expenses. Be sure to account for things like your mortgage or rent payment, utilities, insurance, groceries and any other monthly subscriptions. Subtract that from your monthly income to see what you have to work with.

It's also important to keep in mind the other costs associated with your purchase beyond the monthly auto loan payment, such as gas, auto insurance, licensing, warranties, maintenance and more. A good rule of thumb is to aim to spend no more than 15-20% of your gross monthly income on your car payment.

You'll want to take a look at your full financial picture to determine your ideal price range. To simplify this process, we offer a couple of handy calculators that can help you estimate what your monthly payment might be and how much car you could afford.

Search Smart

Once you have a price point in mind, you can start looking for the right vehicle. A great place to start is with the car currently sitting in your driveway. What do you like and dislike about it? Make a list of priorities to help you narrow your search. Perhaps you're looking for something fun, so a sunroof and heated seats would be top of mind. Or, maybe you're in need of the new family road trip hauler, where safety features and backseat and storage space would matter most. Whatever you're looking for, you can use those particulars as key words or check boxes while browsing online to help eliminate distractions and view only the vehicles that would be the best fit for your needs and lifestyle.

Our AutoSMART tool is a great way to see all of your options by browsing local dealer inventory and checking availability in your area. Plus, you can search by specifications, purchase price or even monthly payment amount.

Know Your Numbers

Before you get too far in the car-buying process, it's also a good idea to check your credit report. Checking before you're ready to walk into the dealership will give you time to work on correcting any reporting errors, which could boost your score and positively affect the rates and payment plans you might qualify for. You can request a free copy of your credit report at www.annualcreditreport.com.

The next thing you'll want to do before hitting the lot is apply for pre-approval for an auto loan. Doing so provides a few advantages. Having an offer in hand will give you more power to be informed and potentially negotiate with the dealer, which could help save you money. CommunityAmerica has some of the lowest auto loan rates in town, and we make it easy to apply for pre-approval with us and then complete your purchase at one of our more than 150 preferred dealers. By locking in a lower interest rate, you can save money over the life of your loan.

Carefully Consider Any Add-Ons

Once you've made it through the initial purchasing decisions at the dealership, you'll be led back to the financing office to complete the transaction. This is where you're likely to be offered a variety of specialty add-ons and services from maintenance packages to protection plans. Pay attention to the options available to you and what they cost to help make sure you get what you need, at the best price.

And before you hit the highway, make sure your new ride is covered by an auto insurance policy. Our friendly, local Insurance Advisors would be more than happy to assist you in finding the coverage that best fits your needs.
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About the Author
laura jones of communityamerica credit union
Laura Jones

Regional Branch Market Director

Laura Jones is a Regional Branch Market Director and has been with CommunityAmerica helping members achieve their financial goals since 2003. She has a passion for helping others achieve financial stability by encouraging smart money management decisions and setting financial goals.