Buying a vehicle can be a very expensive experience. It is often the second or third most expensive purchase someone will make, behind a home purchase and possibly a college education.
The purchase of a vehicle is a top priority for most people at some point. Our Certified Consumer Credit Counselors are often asked what are some of the most important things to consider regarding car buying. Here are a couple of questions to consider:
How much can you afford? It is absolutely vital to know how much you can afford in your monthly budget for transportation when shopping for a car. Whenever people spend more than they can afford, the financial stress is incredibly unpleasant and can cause havoc with their personal finances. Additionally, if car payments are missed, it can ruin your credit and result in the car being repossessed. If that isn’t bad enough, there may be a deficiency balance that you must pay (the difference between what you owed and what they make when selling your repo’d car to someone else). So overbuying is best to be avoided.
Do you have good credit to get a good interest rate? Your interest rate will determine how much you spend over time on the vehicle. The higher your credit score, the lower your interest rate on the vehicle loan. A better credit score can mean big savings on your overall cost. Cleaning up your credit before you apply for a loan could help you both qualify for the loan and get a lower interest rate as well. You can get a free credit report at AnnualCreditReport.com.
For expert assessment and advice regarding your overall financial picture and reaching your specific goals like car buying, make a financial counseling appointment with a highly experienced caring financial professional. Contact CCOA at 479-521-8877 or schedule an appointment online. Appointments are available in person, by phone or online.
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