Tips for Financing a New Car

Financing a New Car

Buying a new car is one of the most exciting parts of life. However, there’s a lot of planning and strategizing that comes with financing it to ensure you get a payment plan that suits you. In this guide, our team at Pat Peck Honda will provide some helpful tips to help you navigate the financing step of the process like a champ. Drivers near Gulfport, Long Beach, and Biloxi should read ahead to learn more!

1.    See Where Your Credit Score Stands

Credit  Score

Before you do anything else, you need to figure out what your credit score is like. Your credit score will affect every subsequent step, including your interest rate, so it’s good to know up front what you’re working with. Use a free credit report resource, so no hard inquiries are made on your credit report. Too many hard inquiries can affect your credit score.

If your credit score isn’t as great as you thought it would be, there are ways to improve it before you make your next big purchase. Try paying off some of your debt and minimizing your debt utilization.

2.    Create a Reasonable Budget

The next step to finding the best finance plan is to create a budget. Start by taking a thorough look at all of your existing expenses, such as rent or mortgage, groceries, student loans, et cetera. Then, take a look at your take-home pay (this is how much you make after taxes).

Depending on what your existing expenses look like, you’ll want to choose a new-car budget that’s in the realm of 10% to 20% of your monthly take-home pay. Make sure that your budget includes car insurance payments and any vehicle maintenance that may pop up.

3.    Figure Out What You Want & Need

Down Payment

Once you’ve figured out how much you can afford to spend on your next vehicle, it’s time to think up a wish list. This helps to fortify the borders of your budget, so you don’t go over what you want to spend.

First, think of all the things you need in a vehicle: three-row seating for your big family, all-wheel drive for your busy weekends, or a specific fuel economy rating for your daily commute. Then, add on things that you want and will take if they fit your budget, like a nicer sound system or leather seats.

4.    Consider Paying a Large Down Payment

One more tip to consider before you jump into the process is to consider paying a large down payment. While it may seem daunting to put a lot down up front, it will save you down the line. The more you put down up front, the less you’ll have to pay interest on. Plus, the faster you pay off your loan, the sooner you become a true car owner.

Find & Finance Your Next New Car with Us

At Pat Peck Honda, we’re experts on finding the perfect financing plan for drivers near Gulfport, Long Beach, and Biloxi. After reading through this helpful guide, we hope you’re ready to jump in and get started on financing your next vehicle. Give us a call today to schedule a time to come in to meet the financing team and take a test drive!