How to Find the Best Car Loan This Labor Day
Labor Day is right around the corner and if you’re like most people, you might be looking for holiday sales. If you need a new set of wheels, this is a popular time to find Labor Day car sales. We’ve compiled tips on how to find the best car loans and lowest auto loan rates this long weekend.
Photo by William Krause
Know your budget
Before searching for your next car and trying to find the best car loans, first, you need to know your budget. Look at all of your income and expenses. How much can you afford to pay each month as part of your auto loan? Will you need to cut back on anything to swing it or will you be able to afford it no problem?
You want to make sure it doesn’t affect your other debt repayments like student loans or savings for the present and future. Knowing the numbers can help guide you in the car buying process so you don’t go over budget and go home with more loans than you can handle.
Do your research now
If you’re looking for Labor Day car sales you’ll need to know what kind of car you’re looking for:
Do you want to buy a used or new car?
What model, make, and year is in your budget?
Do you have a color preference?
What’s the used-car maintenance record and mileage?
All of these things should be considered beforehand so you’re not caught off guard. Knowing what type of car you want will help inform what type of car loan or financing you need.
Check your credit
Once you’ve done your research, you want to make sure you check credit before getting the financing secured to buy a car. If you want access to the best car loans, you’ll want your credit to be in good shape.
Start by checking AnnualCreditReport.com to check your credit report. Your credit report directly affects your credit score, so if there are any errors you want to take action fast. You can also use a site like Credit Karma to check out your credit score.
Ideally, your credit is in the high 600s or 700 or above. If not, you may pay more in interest with higher interest rates. Your credit score directly relates to the type of interest rate you’ll get, so if you want the lowest auto loan rates you’ll need strong credit. You can maintain and improve your credit by making your payments on time and keep your balances low on your credit cards.
Secure financing
To find the best car loans, check with your local credit union first which may have great rates. You may also look at other financial institutions for auto loans. There are also auto loans available online at CarsDirect.com.
On top of that, you can check out the best car loans at your local car dealerships. If you have several options, you’ll have the leverage to find the best offer.
Getting pre-approved for financing or having a plan in place can make the car-buying process easier and make sure you’re scoring the best deal. Paying cash, however, is obviously the best route to avoid any additional monthly payments from a car loan.
Know if you want to buy or lease
Here’s the deal with buying a car — once you leave the lot, the car is depreciating instantly. That means the car will never be worth what you paid for it, ever. Have a strategy in mind on whether you want to buy or lease. Buying a car with the ability to sell later on may make more sense financially.
Leasing a car means you don’t own it outright. If you feel like upgrading your vehicle in a short time, you can change your car when the lease is up. In many cases, you may not have to pay a down payment to do so. When you buy a car, however, you typically need to have at least 10% down.
Labor Day car sales
Labor Day car sales are popular and you can score a great deal during this time. Just be sure to do your due diligence and research to make sure you’re making a wise financial decision.
Need help with your finances? Come meet your new financial coach!