There’s nothing quite like the feeling of driving away in a new car. However, members should consider a few things before stepping on that accelerator.
There are a lot of factors that go into determining the cost of a car. There’s the monthly cost, the overall cost, the cost of insurance, maintenance/repairs costs and depreciation.
The price for most used cars can save members a bundle. However, there are a few drawbacks to remember. Used cars are cheaper initially but perhaps not in the long run. Financing rates usually run higher, too.
Regardless of the age of the vehicle and how well it’s been maintained, parts will wear out sooner in a car with a few years under its belt. Maintenance and replacement parts costs will also be higher than those of a new vehicle. This can also bump up insurance rates. If possible, buy a car from someone you know that can give you an honest history of the vehicle.
Financing rates on new cars are usually lower because they’re worth more than a used car. Manufacturers often offer rebates and cash incentives for new cars that you can’t find in the used-car market. But when it comes to financing, a credit union offers rates that are usually better than a dealership and average 1% lower than a bank loan.*
You’ll need to consider depreciation, too. The value of a car can drop from 10 – 40% or more in a new car’s first year.
Contact us before you make that deal. It’s easy to get carried away with the excitement, especially with an eager salesperson trying hard not to let you get away with signing something.
Learn how much you can comfortable afford before you ever step on a car lot. Dealerships have a way of working deals based on a monthly payment, rather than rate. Salespeople will typically ask what kind of monthly payment you’re comfortable with paying. Unfortunately, customers often wind up with a higher rate than they deserve. In the end, customers will pay hundreds of dollars more than they should.
You can find out how much you can afford by calling us today at (248) 619-0440 or (313) 365-1000. We would be happy to run some numbers for you, giving you the advantage against the dealers.
*Rate average based on 48-month used car loan.