January is typically a slower car-buying month, which opens up the opportunity for potential savings if you decide to purchase a new or pre-owned vehicle soon. While acting fast can benefit you financially, it's still important to consider all of your options. By doing so, you can likely avoid some common car-buying pitfalls.
Before buying a car, it's important to know how much you can afford and how the purchase will impact your overall budget. Remember that car payments aren't the only expense that come with a vehicle – you'll also be paying for maintenance, gas and auto insurance.
A good rule of thumb is to keep your auto-related expenses at no more than 10 to 12 percent of your total income. For instance, if you make $3,000 a month, you'll want to make sure your car payment, insurance, maintenance and gas cost you no more than $300 to $360 a month.
Once you know how much you can afford to spend, you're ready to figure out your purchasing power. Check out UHCU's Auto Calculators
to help you compare different options. Keep in mind that longer-term loans will decrease your monthly payment but increase the amount of interest you pay over the life of the loan.
After you've decided how much you're willing to spend, it's time to get pre-approved for an auto loan. When you get pre-approved for an auto loan, you'll have more bargaining power and more freedom in your purchasing decisions because you'll know exactly how much you can spend when you start shopping.
Several key factors play a role in the review of your application. While many lenders look at the same basic ratios and credit information, United Heritage offers the added benefit of personalized service and local loan specialists who are ready to help you navigate the loan application and vehicle purchase process.
United Heritage also offers products -- often at a lower price than dealership offerings -- that can help you protect your investment. Check with your loan specialist to see if a Vehicle Service Contract, Guaranteed Asset Protection and/or Credit Life and Disability make sense for you.
Visit our Auto Loans page
to learn more about our auto loans and submit a free, convenient auto loan application online.
Don't forget to check out this blog post
to get tips on buying a new car.