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Buying a new car may be one of the biggest purchases you will ever make, especially in today’s market.
Sean Tucker Prescribes Kelley Blue Book Reports that as of March 2022, the average new car price will fluctuate just over $46,000, meaning many buyers will likely finance through a credit union such as Chartway Credit Union†
Whether you are buying new or used, there are different types of car loans available. Determining which one is best for you is important because you will likely pay off that loan in a few years.
Here’s what you need to know about car loans to make sure your loan works for you.
Your deposit is important
Suppose you have saved up for a car and you have a few thousand in the bank. You decide to pull the trigger and buy a new car – the one you’ve been thinking about for months! As the financially savvy person you are, you use a loan calculator to determine what your monthly payment will be.
You should also consider that deposit money. The more you deposit, the lower your monthly amount will be, especially if you decide to repay the loan over a longer period.
NerdWallet says you should aim for 20% of the total cost of your car for a down payment if you buy a new one. They recommend 10% for a used car.
How your interest rate is calculated
According to Credit KarmaThere are two different types of car loan interest rates: simple and pre-calculated.
The interest on a simple car loan changes every month, depending on how much you owe on the day your payment is due. Credit Karma says that part of your monthly payment goes to the principal balance and part to the interest balance.
A pre-calculated interest loan is determined by how much you borrow. “That amount is added to the principal and divided by the number of months of the loan term to determine your monthly payment,” Credit Karma says.
With a loan calculated in advance, you will not save money by repaying your loan early, because your interest rate remains the same.
Allison Martin Prescribes Next Advisor says your credit score will affect your interest rate. The higher your credit score, the lower your interest rate. Your down payment also affects your interest rate. NerdWallet says you can expect a lower interest rate the more money you put down.
Where can you get your loan?
You want to choose a lender with the right credentials and a history of integrity and experience. Chartway Credit Union has both qualifications in addition to their car loan benefits.
For example, they can get you pre-approved for your car loan in minutes, which is important in today’s car market. If you need help knowing what you need for a pre-approval, you can download their application checklist here†
You will need to prepare a copy of your driver’s license, income documentation, insurance policy information, and more if you want to check in as soon as possible.
Buying a car is a big deal, and sometimes it’s best to have some breathing room from the time you sign the paperwork to the time you start paying. Chartway Credit Union understands this and allows you to wait up to 60 days before making your first payment.
Know the price of your car in advance
It’s easy to love driving a new car, but few are in love with the sales process that got them behind the wheel of their new car. Well, when you work with Chartway Credit Union, you don’t have to worry about the haggling and negotiating – you leave that to the experts, or at least the algorithm.
They can help you get discounted, pre-priced prices before you even set foot in the dealership. This one pre-agreed pricing process at Chartway Credit Union helped new car buyers save an average of $1,824 off the MSRP in 2021.
No matter what vehicle you are in the market for, buying a car should be exciting and stress free. That’s why Chartway is the perfect credit union to help you every step of the way.
Check out how Chartway’s car loans are best for you on their website Today.