Finding the right finance for your first dream car
Shopping for the ideal car, whether new or used, is an exhilarating experience that often becomes one of our most important and treasured memories. But as with any big purchase decision, it pays to keep a level head.
Taking the time to properly research what types of services are being offered can help protect both you and your wallet from financial disaster. Here’s how to make sure you’re always in the driver’s seat.
- Speak to an experienced loan consultant and read through the documentation
- Ask as many questions as you need to feel comfortable before signing anything
- Keep on top of your payments to improve your credit score and future options
Of course, personal finance is exactly that and what may be right for someone else might not be right you. Whatever your situation, contact the NuStart Finance team today and apply for a fast loan pre-approval, or continue reading for more information.
How much should I be looking to spend?
This is a popular question asked by anyone transitioning from their 1st car to their 1st real ‘dream car.’ Fortunately, prospective lenders are required to ensure that the terms of any potential loan are within your price range and affordability.
A good rule of thumb is to abide by the 10/20 percent rule and curb your spending habits in relation to your annual income. For example, if you’re earning $35k a year in take home pay, a vehicle priced between $3,500 and $7,000 should fall within the scope of your affordability.
When factoring in the value of a loan, remember that the interest rate will impact the total amount you’ll pay in due course. That said, you should make it a point to speak with your credit assistance provider about the potential pros and cons of fixed and variable interest rates.
Keeping your refinance options open
Once you’ve shopped around enough to know you’ve found a package that is flexible and affordable, you should have a clear idea of what to expect. You’ll know what proportion of income is to be set aside so you can meet your financial obligations.
After 12 to 18 months or so, your credit score should be at an acceptable level, improving your position if you ever decide to refinance your car loan or upgrade to a newer model. Flexibility on this front can include things like reduced interest rates, smaller repayments and a better ability to meet your repayments.
Ultimately, there are many ways to go about financing your dream car, and the one thing they all have in common is that they all involve the help of an experienced loan consultant.