While we’ve talked a lot about reducing vehicle expenses or using alternative forms of transportation we know that the reality is most people will eventually need an auto loan. In this weeks episode we sit down and chat about what terms you should look for, how you should get an auto loan, and how much you should spend. Once you decide to buy a car here’s the steps you should take:
Figure out how much you can spend using a financial calculator like this one for example. If you enter 5% for the interest rate, $115 for the payment, 60 for the number of periods, 0 for the future value, and then change it to monthly, payments to see in that case you could spend 6,093 on a car if you wanted a 5 year loan and payments of $115.
Head to your local bank or credit union to see if you can get approved for the $6,000 loan you want above and see what their interest rate would be.
Find a car you want!
Head to the dealer; if you qualify for their promotional financing GREAT. If not you already have financing through your credit union which is awesome and probably is a lower rate than they can give you.
Don’t budge on your price, don’t get emotional. Walk if you can’t get the car you want at the price you need.
Eventually, you will find the perfect car at the perfect price and drive off into the sunshine :)