What do I bring with me to buy a car? - For starters, just bring your driver's license and most recent paycheck stub.
What does it mean to finance a vehicle? - When you finance a car, you take out a loan to purchase the vehicle and then pay back that loan over time.
What is a co-signer? - A co-signer is someone that goes on the loan with you that shows stability with credit.
Do I need a co-signer? - Possibly. We will look at information such as short job time (3 months or less), and monthly income.
What are the benefits of a co-signer? - Lower interest rates, better terms (length of loan), less down payment
I have a great credit score. Why do I need a co-signer? - This depends on how you got the credit score. Things like credit cards, home equity lines of credit, and personal and business lines of credit (revolving credit) impact credit score. Installment credit (car loan, home loan, student loans) is a type of loan where the borrower receives a one-time payment of cash and then pays it back in regular installments over the life of the loan.
What is credit? - Credit is a financial agreement that allows someone to receive goods or services before paying for them, with the promise to pay later.
How does credit influence my purchases? - Good credit scores can lead to better buying power, as you are more likely to get approved for larger loans, better interest rates, and lower deposits. For example, when applying for a mortgage, lenders consider credit scores to determine interest rates and other loan conditions.
Credit Score chart:
· Exceptional: 800-850
· Very good: 740-799
· Good: 670-739
· Fair: 580-669
· Poor: 300-579
Use Credit Karma to check your score. It is the easiest way and it’s free. It may not be 100% accurate, but it will give you a very good idea.
You can check your credit score for free once a year from each of the three major credit bureaus, Equifax, Experian, and TransUnion, by visiting AnnualCreditReport.com or calling 1-877-322-8228. You can also check your credit score by logging into your credit card issuer's website or using a free credit score service. Some free credit score services include:
What kind of car insurance do I need? - You will need full coverage if you have a loan on the vehicle with a maximum of $1000 deductible. “Full coverage” is different for every insurance company, so it is important to talk with a reliable agent to get the most suitable coverage. (Pause, don't freak out!) Finding an agent to help you is Easy Peezy! We can point you in the right direction. You can obtain liability insurance if you do not have a lien (owe money to a lender) on the vehicle. Liability insurance protects you financially if you are found responsible for another person's injuries or property damage. It can cover legal costs and payouts, such as medical bills or auto repair bills.
How do I know what my car payment will be? - Car payments are determined based upon sale price, age of vehicle, money down, credit score, miles on vehicle, and interest rates. We use a program called SmartPay to accelerate the payoff of your vehicle.
What is Carfax? - Carfax provides a vehicle history report detailing service records, previous ownership, open recalls, and any recorded accidents.
What are interest rates? - Interest rates represent the cost borrowers incur to borrow money. Borrowers are required to repay the initial amount borrowed, known as the principal, along with the interest, which is a percentage of the principal. The principal is the sum borrowed from a lender, and the interest is the price paid for the use of those funds.
Why do we pay interest rates? - This is how the bank makes their money. Interest is a percentage of the loan that you pay back to the bank.
Is 100k miles on a car a lot? - It’s not the 90’s or early 2000’s anymore. Cars are better constructed today as technology continues to improve. We do a safety inspection (checking brakes, tires windshield wipers, windows) on all of our vehicles, as well as a basic service inspection.
Pros of buying a used vehicle:
Lower prices - When you purchase a used car, you can take advantage of the rapid depreciation (loss in value) that new cars experience, often losing up to 20 percent of their value in the first year and about 40 percent by the end of the third year. The generally lower cost of used vehicles also raises the possibility of paying for the car in full or providing a significant down payment. Moreover, it may allow you to opt for a model with higher specifications than what you could afford if purchasing new.
Smaller loan amount - The lower prices of used cars typically result in smaller average loan amounts compared to new cars. This often leads to lower monthly payments and reduced total interest charges, depending on the loan's terms.
High-quality options - Ongoing advancements in vehicle quality and dependability have led to a wide selection of excellent used cars available, many capable of exceeding 200,000 miles.
Quicker payoff - Typically, loans for used cars are shorter than those for new cars, which allows borrowers to pay off their vehicles more quickly.
Cons of buying a used vehicle:
Reliability - Although quality has improved, it is generally expected that preowned cars will be less reliable than new models. The age of the car can lead to higher repair costs, particularly if the manufacturer's warranty no longer covers it. Additionally, reliability can be influenced by the driving habits of previous owners, making a vehicle history report a valuable resource.
What is a down payment? - The initial sum of money applied to a purchase being financed by the purchaser.
Do I need a down payment? - No. You can purchase a car with no money down.
Pros of no down payment:
Acquire a car instantly: Rather than saving for months or years for a down payment, you have the option to purchase a vehicle right away.
Retaining more cash on hand by not making a down payment can provide flexibility to allocate savings toward other objectives, like establishing an emergency fund, contributing to a house down payment, or directing funds into loan repayments.
Cons of no down payment:
Higher monthly payments result from financing the entire cost of the car without a down payment. This includes associated expenses like state taxes, registration fees, and dealer documentation, as well as transportation fees, which are added to the financed amount. Consequently, a larger loan leads to larger monthly payments.
Higher interest charges may arise if lenders consider factors such as your creditworthiness and income, offering less favorable terms and increased rates when there's no down payment. Financing a more substantial loan amount, even at lower interest rates, results in paying more interest throughout the loan's term, particularly if extending the loan term is necessary to keep payments manageable.
**Please keep in mind that everyone has their own opinions on some of these topics and our guidance is meant to be suggestive only. **
