Tips for First-Time Car Buyers
First time buying a car? Learn useful tips for first time car buyers such as pre-qualifying for financing, choosing insurance, and understanding depreciation.
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Many factors go into determining the final loan amount for the purchase of a new or used vehicle. These factors include any manufacturer's rebate, the trade-in value of your old vehicle less any outstanding balance, your down payment, etc. Once the loan amount is determined the interest rate and the term of the loan will be used to estimate your vehicle payment.
No one knows your financial situation better than you. Using our Car Payment calculator can help you assess the loan amount and monthly payments that fit your current circumstances and future goals. Equipped with this knowledge, you can shop for the right auto loan that you can then use to negotiate the best deal at the car dealership.
For used vehicles, try starting with a 48-month (4 year) term and increase or decrease the term to find a monthly payment you are comfortable with. Keep in mind that many lenders will not finance a used car for more than 72 months (a term usually reserved for new vehicle models).
For new vehicles, start with a 72-month term and adjust to see the impact on your payments. Some lenders will finance for as long as 96 months (8 years), but be aware that you will be “underwater” on the vehicle for longer.
The default rate in the calculator (8%) is a good place to start, but, if you want to be sure to have the most current rate in your calculation, check out our current vehicle loan rates. You can also apply with ITCU for a pre-approved auto loan and use the rate you qualified for in your calculations.
Vehicle sales tax rates vary by state, county and city level. Tax rates range from 4% to 10% if you want to try different amounts. To look up exact rates in your area, use this guide provided by F&I Tools, which includes resources for each state.
Get pre-approval for an auto loan from InTouch Credit Union, even if you haven’t decided on the car you want to buy. Sticking to a predetermined loan amount makes negotiating with the dealer easier!
