Scoring a great deal on your next car or truck doesn't start at the dealership or searching for the right make and model on your computer. It starts with smart borrowing tactics that can save you hundreds of dollars in finance charges. Those strategies can help you stay within your budget, too. We've put together some of the best ways to borrow smart and get the most from your next auto loan.
Do Your Homework
Nothing ruins a family budget like an out-of-reach auto loan payment. The trick to staying within your monthly budget is to borrow what you can realistically afford. One of the best rules-of-thumb is to keep your car payments between 15-20% of your overall income. This is called the payment-to-income ratio, which applies to home loans as well.
One Nevada has plenty of online calculators to help you at onenevada.org/calculators.
Secure Your Financing
Being pre-approved for an auto loan is just like carrying cash, only better. It makes you an informed consumer and puts you in charge when you do go to the dealership. See today's rates and terms at onenevada.org. When you're ready to apply, have your salary and employment information handy.
When applying for any auto loan, you'll ideally want a 10% down payment, a term of no more than 60 months, and Guaranteed Asset Protection (GAP) insurance to minimize the risk of being underwater on your loan if your car is stolen or totaled in an accident.
Understand Insurance Costs
We highly recommend GAP insurance if your loan amount would exceed the actual value of your car or truck. For example, if your car is stolen and it's worth $20,000, but you still owe $27,000, you would be responsible for the $7,000 left on the loan. With the addition of GAP, that $7,000 could be reduced or eliminated.
Call around for quotes and research the insurance costs for any vehicle you're considering. This should include the cost of GAP insurance. Depending on the vehicle, your driving history, and your credit, insurance premiums can vary greatly. Get a free quote from One Nevada Insurance at 702-641-4346.
Get Pre-Approved Before You Shop
It's a great idea to narrow your search to a few specific makes and models before you take a single test drive. Edmunds.com can help you make a list of the ideal makes and models that fit your budget. That same site can help you determine the best price for your trade-in as well, if you have one. Additionally, we've teamed up with Enterprise Car Sales to help you get a great deal on quality used cars and trucks. Learn more at onenevada.org.
Compare the Price and Warranty
Compare at least three dealerships for the total selling price, including accessories and taxes, of the make and model you want. They often call this the out-the-door price. Then use the best-quoted price to shop at your favorite dealership. Now, ask about the available warranty. Even used cars often still carry some warranty. If the car or truck you're about to buy doesn't have much of a warranty left, One Nevada Insurance can help. Our extended warranties can help pay for larger repair bills that can happen at any time.
Drive Home Happy
If the price is right and the vehicle is perfect, let the dealer know you're pre-approved with One Nevada. While they might try to convince you that their financing is a better deal, or that you might qualify for some third-party loans, it's important you do what is right for you and your finances. If you have questions about a financing offer, walk away and give yourself time to review the fine print. You can even give us a call or stop by to get help with the comparison.
Once your loan with us is approved and signed for and you're ready to buy, we'll provide you the check you'll bring to the dealer in exchange for your keys. We'll take it from there, contacting you a few days later with your payment information.
Always Borrow Smartly
Get pre-approved at any branch, at onenevada.org or call 800-388-3000.
Should You Refinance Instead?
If the car or truck you already own is safe, comfortable, and affordable, then refinancing your loan might be the smart move. Just do the math first. If you owe a lot more than the vehicle is worth, then refinancing may not be an option. As always, do the math or give us a call and we'll help you.
Your Test Drive "To Do" List
- Avoid weekends and late evenings for the best service and attention.
- Ask about dealer-installed options that may have added thousands to the sale price. See if those options can be removed to lower the price.
- Take a long test drive. Sit in the back seat, try all the options, and drive through residential areas as well as fast-moving highways. If you have young children, bring them along and see how well the entire family fits.
- Above all else, don't buy the first car you find. There are thousands of vehicles for sale and there is more than one that's right for you.