Are you ready to purchase your first vehicle?
The problem with vehicles is that they don’t last forever. Maybe up until now, you’ve been driving a hand me down car and it’s on the verge of dying. Unless you live in a city and plan to rely on public transportation, you’re probably going to need a new set of wheels.
In order to do that, you’ll have some decisions to make. Getting a new car can be stressful, especially if you’ve never gotten a loan before. Since this is a pretty big purchase (maybe your first big adult decision), it’s important to do your research and know what you’re getting yourself into.
- Decide On A Budget: How much do you want to spend? If you’ve been saving up money for this moment, maybe you’ve decided to only buy what you can pay for in cash. The majority of us, however, will need to apply for a loan to purchase a reliable vehicle. Look at your income and current expenses and figure out what a reasonable monthly payment might be for you. Be aware that a reasonable payment might mean that you can’t get a brand new sports car with all the extras. The price of gas, insurance, registration and routine maintenance are factors that should also be considered as monthly expenses.
- What Type of Loan? How long do you want to be paying on your vehicle? Typically, the shorter the term, the larger the payment. If you want to stretch it out further, you’ll pay more in interest, but have a lower monthly payment. Consider making a down payment towards your vehicle. The less you have to borrow, the better. If getting a new vehicle isn’t an emergency or if you’re just planning ahead, it’s a good idea to start setting some money aside now. The credit union offers a Starter CDs that can be a great tool in saving for a down payment. You can open this CD with $25 and continue to add to it until maturity. We offer a one year and two year for your convenience.
- Shop Around: You probably aren’t going to buy the first vehicle you see. It’s a good idea to shop around to make sure you find the vehicle best suited to your budget and lifestyle. Our friends at Automotive Avenues have a great selection of new and used vehicles in all makes and models, which provides a large selection of options to choose from.
- What’s Your Score? If you have a lower credit score (under 670), you may want to work on improving that before applying for a loan. As a Credit Union of Denver member, you have the benefit of a helpful service called Credit Score & More through online banking. This service allows you to view your current credit score and will specifically display the areas you could work on to increase your score. You can also view your entire credit bureau report to review for discrepancies and includes the ability to set credit monitoring alerts.
If you are interested in applying for your first auto loan, you are welcome to contact our Financial Service Department directly at 303.202.5659 to speak to one of our knowledgeable Representatives who can answer any of your questions and take an application when you are ready. You can also visit our website at cudenver.com to apply online.