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Financial Minute

What to consider when looking to buy a car

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There are many factors to take into consideration when looking to buy a car. The brand, model, color, interior and the way it runs are some of the things that we are immediately driven to consider at first. Purchasing a vehicle takes time and research — if you are planning to purchase a car in the near future, start considering your budget, credit, expenses and loan options.*

The first step to buying a car is looking at your credit because it will help you get approved, tell you how much you are approved for and determine the interest rate of the auto loan. A good credit score will give you a lower interest rate, which means that you might save money on interest in the long run. If you don’t know how to find your credit score, you can go to annualcreditreport.com to get your credit report for free. It’s essential to have a good credit score for large purchases. If you are a first-time car buyer and do not have credit, purchasing a vehicle and paying your monthly payments faithfully will help boost your credit score for future purchases.

After checking your credit score, budget how much you can afford in monthly payments. It is important to know your budget before you start looking at cars. Determine how much of a down payment you will want to give — a large down payment means getting a smaller loan and paying less in interest. You’ll also have to budget for gas, car insurance, oil changes and general maintenance expenses.

Car insurance can be costly depending on the coverage that you want for your vehicle. Make sure to research different car insurance companies and compare price, coverage and other details when looking to purchase a car. If you already have a vehicle and are looking into purchasing another one, find out how much more it will add to your monthly or biannual insurance payments. You can trade in a vehicle that you still owe money on. Make sure to find out how much you owe on the loan and research its trade-in value. If your car is worth less than what you owe, you will have to pay the difference between your existing loan and the trade-in value.

Once you’re ready to hit the lots and start shopping, take time to look around at your options. Before you purchase a car, take it for a test drive and see what each dealer has to offer. Test driving several vehicles can give you an idea of whether or not you like the model, the interior and the way it drives. If you do like the vehicle, consider test-driving similar vehicles that you may like to compare prices, features and dealer offers. Also, see how many miles per gallon it will give you in the city and on the highway — looking into gas-efficient vehicles can help you save money on gas.

You can finance your vehicle through the dealership or your preferred financial institution. Look for a low interest rate and see if there are any application fees or monthly fees. Don’t forget to ask about the term of the loan to see if it’s the right fit for you. Research several institutions and dealerships to see which one will meet your needs.

GECU is available to help you get in the driver’s seat of the car that you want. As an equal opportunity lender, GECU has the loan options to get you there. Visit gecu.com today or call 778.9221, toll-free at 1.800.772.4328, to see how you can apply and to find out how easy it is to become a member.

*All loans are subject to approval. Rates and terms are based on borrower’s credit qualification and subject to change. Other conditions apply. Learn how to become a member at gecu.com. GECU is an equal opportunity lender.

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