Other than a home, a car is one of the biggest purchases that you’ll make, and that usually means loans. Big purchases can be scary, but if you know your budget you can walk into any dealership with confidence. Before you to get to that step there are a couple of important questions you need to ask yourself first.
How Do I Check My Credit When Buying a Used Car?
The better your credit score, the lower your costs and interest rates will be when you apply for an auto loan. Banks and credit unions will reference your credit history and score when setting the interest rate and other terms on your auto loan. If you’ve paid your bills on time and have an established record of responsible credit, you’ll be rewarded with a more favorable loan.
If you haven't checked your credit recently, AnnualCreditReport.com can provide an in-depth credit report for free once a year. Before applying for a loan, it’s important to know what your credit looks like and see if there is anything that needs correcting. Many credit card companies will provide a credit score on the monthly statement. If not, you can request your credit score from major credit reporting agencies like Equifax or Experian for a small fee.
Can I Get Pre-Approved for a Used Car?
Getting a loan pre-approved can be one of the best ways to help you budget your used car purchase. When you go to a lender you’ll need to provide them with personal and financial information, but getting approved means more flexibility in choosing what car you want.
The process can also be quick, with some institutions offering pre-approval results online in minutes!
On the other hand, if you’re worried about getting pre-approved there are other financing options. Depending on your situation dealerships may offer you financing through one of their financial partners.
How Do I Check How Much My Car is Worth?
If you’ve kept your car in great condition, then you want to take into consideration trade-in value for your used car budget. Before you trade your car in you’ll want to run it through a resource like Kelly Blue Book to get the best-estimated value of your car in its current condition. You’ll be able to do a search for “used Ford Mustang in NJ” or whatever model you may have and find its value. You’ll be able to use this value as part of the cost of your new car.
On the other hand, you could try selling your car yourself. But be prepared to spend a lot of time and energy doing the extra work to find potential buyers and handle the title transfers. Many people choose to trade-in their current vehicle with the dealership they’re buying from because of the ease. It’s less work for you and you don’t run the risk of the vehicle sitting around unsold.
Have You Set a Realistic Budget?
Now that you’ve done the work to study and research, it’s time to set a realistic budget and determine what you can spend. To figure out how much you can spend, add together your pre-approved loan amount, your trade-in value, and any additional money you plan to use for a down payment. It’s also helpful to compare your budget against an online car affordability calculator like Edmunds.com.
With these sites, you can put in how much your loan is, your estimated down payment, and what you would like your monthly payment to be. The calculator figures in taxes and fees, and presents you with an estimated sticker price range that fits your budget.
If you’re ready to buy a car, Royal Motors is ready to help. They have great prices on a variety of makes in models, including used Lexus for sale in NJ right now! Their friendly team accepts all trade-ins, regardless of condition, and can accomodate most credit needs. Call our team at (856) 346-2121 or stop by their location in Voorhees, NJ today!
