These Tips Make Buying A New Car Easy

1. Determine Your Budget
Before beginning your car-buying journey, it’s helpful to understand what you can afford. A good place to start is with an auto payment calculator. This tool can give you an idea of what your monthly costs will be. 

Make sure to consider your credit score, as it will impact your loan rate. BCU and Life. Money. You.^® provide free credit score reporting and monitoring to members. Also research the value of your current vehicle, if you have one, as it can go toward a down payment if you choose to sell it or trade it in. 

When determining your budget, be sure to include expenses like insurance, gas, and regular maintenance in addition to your monthly auto loan payment. These costs can add up and upset your financial plans if you don’t prepare for them. 

2. Understand Your Financing Options
Once you know what you can spend, start making a plan for financing. Finding the right balance between monthly affordability and long-term cost is an important part of choosing the right auto loan for you.

The amount of money you finance, the size of your down payment, and the length of your loan term can all impact your monthly payment and total borrowing costs. 
• A larger down payment reduces your monthly payment and interest costs, but it may leave you with less cash available for emergencies or other needs. 
• A longer loan term can lower monthly payments but typically increases the total interest paid over the life of the loan. Shorter terms generally cost less overall but require higher monthly payments. 

Where you choose to finance your vehicle can also have a significant impact on the total cost of ownership. 
• Dealer financing may offer an attractive low interest rate. But those promotions can sometimes require you to forgo valuable manufacturer rebates that can save you thousands. 
• Credit unions may have slightly higher rates but often allow buyers to combine financing with available rebates, reducing the amount borrowed and lowering the overall cost of the loan. 

Getting pre-approved for an auto loan at your credit union before you start shopping can make the car-buying process simpler and less stressful. With a pre-approval in hand, you can focus on test-driving cars rather than arranging financing at the dealership. And with BCU’s Auto Buying Service powered by TrueCar, members can walk into the dealership with a pre-negotiated price, eliminating the anxiety that can come from haggling. Additionally, credit unions often offer competitively priced extended warranties and other protection products that may cost less than similar options available through a dealership.

Ultimately, there is no one-size-fits-all solution for auto financing. The best choice depends on your current budget, personal preference, and long-term financial goals.

3. Find The Right Car 
Now that you have a financing plan, it’s time to decide if buying new, buying used, or leasing is right for you. 
• Buying a new car usually comes with lower loan rates, potential manufacturer rebates, and fewer maintenance concerns thanks to warranty coverage. But new cars typically have a higher purchase price and depreciate faster. 
• Buying a used car is often the most budget-friendly option, generally offering a lower purchase price and slower depreciation. However, used cars may require more maintenance and carry higher loan rates. 
•Leasing can provide lower monthly payments and the opportunity to drive a new vehicle every few years, but mileage restrictions and long-term costs can make it less appealing for some.

Next, consider your lifestyle and driving habits. Will you use the car primarily for commuting, family transportation, business, or something else? Research safety and reliability. Think about capacity, storage, and fuel economy. Trusted resources such as CarSoup.com, Kelly Blue Book, and BCU’s Auto Buying Service powered by TrueCar can provide valuable reviews and ratings to help narrow your choices.

Always test drive a vehicle to ensure it meets your expectations, and if you’re thinking about a used car, review the vehicle history report and consider having a mechanic perform an inspection. 

4. Get The Best Price 
Scoring the best price on a vehicle starts long before you sit down to negotiate. Research the market value of the car you want, compare prices from multiple dealerships, and understand what constitutes a fair deal. 

Don’t be afraid to question extras, compare offers, or walk away if the numbers don’t fit your budget. Being willing to leave the negotiation table is one of the strongest tools you have as a buyer.