6 tips to help you buy a car
You have found the car of your dreams. You can see yourself behind the wheel. You are almost ready to purchase. Now is a good time to step back and look at the big picture. So before you apply for a car, you need to follow these important steps when buying a car:
1. Consider your budget
How much do you pay each month? Can you pay for an advance? These are important questions that you need to answer before buying a car. And while you're working on your budget, don't forget about maintenance, insurance, fuel and repair costs, all of which are part of the actual cost of owning a car.
When working on your budget, keep in mind that you may have to pay a certain percentage to secure funding and that a higher down payment means you will pay less interest in the long run.
2. Check your credit report
One of the most important factors lenders take into account is your credit history. The higher your credit score, the better the interest rate you get. Before purchasing a car, check your credit report to make sure the information is correct to get the best possible loan rate.
3. Get approval in advance
Buying a car can be easier if you check your financing options before reaching the dealership. Knowing your approved interest rate can help you negotiate your business. If you are a Preferred Rewards or Preferred Rewards client for Wealth Management at Bank of America, you can benefit from an interest rate discount of up to 0.50%
4. Know the value of your exchange
If your current car is clean and in good condition, it may have a value that you can attribute to the purchase of a new vehicle. Resources like Kelley Blue Book and the National Automobile Dealers Association can help you determine the value of your current vehicle before you start trading.
5. Compare prices
Knowledge is power when it comes to negotiating an agreement. So visit a variety of websites and visit multiple dealers to find out what to expect for the car you want. The Bank of America dealer network can also be a valuable resource.
6. Choose the right loan
The terms of your loan, the interest rate, and the time it takes to pay off the loan will affect what you end up paying for the car. (For more information, see our article on how car loans work.) Make sure your car loan terms comfortably match your specific budget.