Basics of Getting Your First Auto Loan
So you’ve decided to purchase your first new car. Congratulations! Thrive wants to help give you some basic tips as you work towards driving away in your new car.
Paying Cash or Getting Your first Auto Loan?
If you’ve been able to save and pay cash for your first car, congratulations! However, most people do not have the money to pay for a car right away. In this case, you can apply for an auto loan. In order to apply for a loan, you can visit your financial institution to begin the process. There are a few things to keep in mind.
Co-Signer Might be Needed
Being approved for an auto loan really comes down to your credit score. Most people will need to have a co-signer on their first loan, as they have not yet established enough credit to be approved on their own. A co-signer must be a member of Thrive and have good credit standing.
Thrive offers pre-approval for all members. Once you are approved, you can take the pre-approval letter to any local dealership so the auto dealer knows how much you are looking to spend and that you are approved for that amount.
Researching Your Car
Once you know how much you have to spend or how much you are able to afford on your new car, begin researching cars. Find out what a vehicle is worth and determine what aspects of a car are most important to have. Once you know what you are looking for, you can begin looking online at dealerships, car lots or individual sellers. It is important to take your time and make sure you are getting the best deal and good quality.
Check With a Mechanic
Once you find a car that feels right, bring it to a mechanic and have it checked professionally to see if the vehicle is worth the investment. Often, dealerships will have mechanics available on-site, but always taking it to a third party for final approval gives you peace of mind in knowing the vehicle is in good shape.
FINALLY! Buying Your Car!
Once you’ve made the final decision and selected your car, the seller will write up a purchasing agreement that states the car details and purchase price details. Once the purchase agreement is completed, you can bring it back to Thrive Credit Union and the loan officer will prepare a check for you to take back to the dealer. If you are buying your car from an individual, the car being sold must be inspected by a loan officer at the credit union. The loan officer will look at aspects of the car to make sure it is in decent condition. The credit union will write the check to the seller if it passes the inspection.
A Few Things to Also Remember… Payments and Insurance
Remember to also call your auto insureance company and get a quote on what your monthly insurance payment will be and set up your new car with the insurance company. After your insurance plan is set up, you will send proof of insurance to Thrive Credit Union. If you do not have insurance on the vehicle, the credit union will give you forced placed insurance, which is much more expensize than a regular insurance plan, so taking care of the insurance right away is very important.
Along with insurance payments, if a loan was financed at Thrive, the first payment will be due within 30 days of purchasing your car.
First Car Payment Example:
A Member with an average credit score who takes out a four year loan of $5,000 for a 2010 vehicle will have a 9.49 annual percentage interest rate, which will put payments at $125 per month. Payments can be automatically transferred from your account or payroll each month or you can pay them manually in person, over the phone or through Thrive’s online or mobile banking. Making sure payments are made on time is very important and will set you up for a successful financial journey!
Ready…Set…Buy your First Car!