Are you thinking of purchasing a new car or looking to attend our VIP Auto Event? If you’re answered yes to either of these questions, read on and check out a few tips to help you before and during your next vehicle purchase.
Buy what you can afford
Don’t buy a vehicle you can’t afford – this is the easiest and hardest rule for many. If you can afford a $40,000 vehicle, then move forward. Also, why not consider purchasing a $30,000 vehicle or one that is cheaper? The idea came from Suze Orman’s own philosophy: “Live below your means but within your needs.”
Put yourself in the driver’s seat, literally.
Use our easy auto loan calculator to estimate monthly payments. Then, be honest with yourself. Does it make sense to buy a new vehicle or are you better off selling a vehicle you currently have and buying a gently used vehicle? Don’t forget to consider insurance costs, vehicle registration costs and other fees.
Borrowing against your home for a new vehicle – don’t do it!
Another great point from Suze. Don’t use a home equity line of credit (HELOC) to obtain an auto loan. If you fall behind on HELOC payments, you may lose your home. Think about it. If you are approved for a traditional auto loan and miss your auto loan payments, you lose your car. Would you rather have your car repossessed or lose your home? [source]
Save time with a pre-approved loan
Get your financing in order so you have more time to shop for the vehicle you want. ILWU Credit Union members may obtain a pre-approved auto loan here. Once you’re pre-approved, the offer is good for 30 days.
Check the terms of a maintenance package
If you decide to purchase a maintenance package for your new vehicle, make sure you ask about the terms. For example, a friend of mine bought a maintenance package (from the dealer) when she bought her new car. The dealership eventually closed and when she tried to service her car at another dealer (by the same name), her maintenance package was rejected. Lesson: If you buy a maintenance package from a dealer, make sure other dealers will honor it.
Protect yourself from major repairs
Cover your vehicle from major repairs with MBI (Maintenance Breakdown Insurance). Pay a one-time fee and your vehicle will be covered even after the warranty expires. The insurance will cover most, if not all, mechanical and electrical components of your vehicle. Added benefits include 24-hour roadside assistance and rental vehicle assistance in the event your vehicle becomes disabled.
Insure your loan(s)
No one wants to think or talk about disability or death, but unfortunately, events like these do happen. While processing your auto loan, ask us about Credit Life and Disability Insurance. How it works: Your loan payments may be covered (up to $600) if you become disabled. In the event of an unexpected death, the insurance may pay off the loan completely.* The premium is included in your monthly loan payment and you have the option to cancel at any time.
After reading, do you think you’re ready to purchase a new vehicle?
[Image credit: Emran Kassim]