5 Tips for Financing Your First Car

You found your dream car and are ready to experience the freedom of owning your first car. It’s an exciting time to hit the open road and explore. Buying your first car should not break the bank. Finding the right financing makes your dream car affordable. Drive off with a car you can afford without compromising your must-have features.

Before you buy, map out a plan. How much car can you afford? Which features are on your wish list? Your first car should fit seamlessly into your lifestyle and budget. Once you have an idea of what you are looking for, take advantage of the right car financing in San Antonio. Let’s explore what to include in your plan and which financing options can get you there.

1. Build Credit in Advance

If you live in Texas, car finance in San Antonio can get you where you are headed. With the right financing, you can save money and have more cars to select from. Remember, your car journey starts before visiting the dealership. The better your credit score, the better your financing. Though lack of credit history won’t necessarily stop you from buying a car, it will affect your interest rates. Typically, the higher your credit score, the lower your interest rates.

If you are just starting out, chances are you haven’t had much time to build credit history. Lenders use credit history to determine your borrowing habits and whether you make full payments on time. If you have little to no credit history, begin building credit by opening a credit card and using it to pay larger bills such as rent and utilities. Make sure to use your credit card for purchases you already have the funds to cover so you can pay off your bills on time without accruing debt.

2. Set an Attainable Budget

When setting a budget, make sure to consider both your financial goals and life goals. How much car can you realistically afford, and what is your daily lifestyle? These two questions will guide you to a vehicle that fits your driving needs and budget. Think about what you plan to use your vehicle for. Do you do a lot of city driving? Are you in need of a vehicle for trade work? Buying the right car the first time ensures it will be with you for the long haul.

Next, how much can you realistically afford each month on car payments? Consider your monthly expenses as well as projected income. Come up with a number you can comfortably afford with enough left over for emergencies and other financial goals.

When calculating your budget, take into account all car-related expenses. These include maintenance, repairs, cost of insurance, and fuel. Make sure to map out other financial goals in addition to owning a car. Your budget should help you reach all your financial goals without draining your savings. In general, your monthly car budget should not exceed more than 10 percent of your monthly income. For added affordability, shop around for the best car financing deals.

3. Explore Financing Options

Look for the best car finance in San Antonio deals and save. A great option for huge savings is financing directly through your local dealership. Dealerships partner with various lenders, making dealership financing a great way to access the best deals by comparing different lenders at the same time. With a wide selection of lending options to choose from, dealerships may offer a better rate than what your bank quoted. Dealerships work to provide competitive rates for their customers with the convenience of buying a car and financing it all in one stop.

Dealership financing is also great for anyone who has less-than-perfect credit. If you have missed a payment or two or need to rebuild your credit, dealerships are often more flexible than banks or credit unions. Since dealerships have special arrangements with local and national lenders, they can help get you the car you desire even if you’ve been turned down in the past.

First-time car buyer programs are also available to help those with little to no credit history. These are typically offered by lenders or certain auto manufacturers and designed with less strict requirements, so you are more likely to qualify for a loan even with limited credit history. These loans typically allow a cosigner. A cosigner with good credit agrees to make payments if you default on your loan. When shopping, ask if first-time buyer programs are available.

4. Choose a Short Loan Term

When selecting your loan term, it may be tempting to choose a longer loan term to keep monthly payments lower. However, the longer you pay on a loan, the more money you spend over the lifetime of the loan. This is especially important when dealing with an auto loan, as cars begin to depreciate as soon as you drive off the lot. Though some vehicles hold their value better, it’s always a good idea to offset depreciation. With a shorter loan term, you will save money in the long run and avoid making payments on a car that is worth less than what you owe.

As part of the loan financing terms, another great way to offset depreciation is with a 10 to 20 percent down payment. Start saving for your down payment early and plan on putting 10 percent down for a used vehicle or 20 percent down for a new vehicle.

5. Reward Your Lifestyle

The best part of financing your first car is finding the right vehicle that best fits your lifestyle. Have fun exploring different models and styles. When dreaming up your ideal vehicle, make sure to clearly define what you need out of your car and what you hope to accomplish with it. Are you looking for a commuter-friendly car with impressive fuel economy, or do you have an active lifestyle and need a vehicle able to handle rugged terrain? Consider your day-to-day life and look for a vehicle that complements your lifestyle. When you’re ready, the Benson’s Ingram Park Chrysler Dodge Jeep Ram dealership in San Antonio, TX, has everything you are looking for. Explore our impressive lineup and secure a custom finance package, all in one stop. Visit us online or in person today and drive away with a great deal.