Whether you’re single or married, young or old, buying a car is one of the biggest financial commitments you will ever make. According to Experian, the average paid for a new vehicle is now at $34,000. And that’s just the average!
Unfortunately, buying a new car isn’t always the rational, need-based experience it should be. Emotions quickly become involved, often leading us to decisions that aren’t always in our own best interest. One of those decisions involves letting the dealer handle financing.
The car dealer is ALWAYS looking out for his/her best interests. Yes, the salesperson may seem concerned about your financial well-being and offer to “take care of” the negative equity on your current car. The finance manager will “work with you” to get you into a payment “you can afford” by stretching the loan over six, seven or, in some cases, even eight years.
Just remember: car dealers make money selling cars, add-ons and financing. They will do everything they can to sell you a car and maximize their profit on the sale, even if it means you have more car than you need and more debt than you can afford.
Before you go car shopping, it’s important to do your financial research as well as car research. Know your credit score and what others with a similar score are paying for car loans. If you plan to trade in your current vehicle, know what you owe (if anything), and its current value. Consider getting pre-approved for a car loan through the University of Kentucky Federal Credit Union. Not only does this eliminate the whole back-and-forth process with the finance manager, it can really help you stick to your budget.
But if you’ve already made the leap and now have “borrower’s remorse,” don’t despair. It’s not too late to do something about it: refinance!
Unlike banks, the University of Kentucky Federal Credit Union is owned by its members, not shareholders. Because of this, UKFCU offers low-
interest rates on new and used car loans. And refinancing is incredibly easy … and free. Not only that, UKFCU offers 1 percent cash back on the balance of any loan from another financial institution refinanced with UKFCU. More information on the cash back program can be found at www.ukfcu.org in the personal loans section.
Refinancing can make a difference in your monthly payment … and in the amount of interest you pay over the life of your loan. If you currently have a $25,000 car loan with five years left to pay at 6 percent interest, refinancing to a lower rate could save you thousands of dollars! That’s money you could invest in retirement, use to pay off other debts, or save for a down payment on a home.
To make the deal even sweeter, during October, UKFCU will make a $25 donation to breast cancer research at the Markey Cancer Center at the University of Kentucky for every auto loan refinanced.* It’s a perfect way to help others while helping yourself!
To find out more, stop by any UKFCU branch, visit the Credit Union online at ukfcu.org or call, toll free, 1-800-234-UKCU (8528).
* — Offered 10/1/17-10/31/17.
Existing UKFCU loans not eligible.
Must be at least $5,000 loan balance to qualify for
1% cash back and donation. Other restrictions may
apply. See representative for details.