Searching for a new car is a fun and exciting process. With so many cars, trucks, and SUVs out there today, you’re finding joy in thinking about high-performance engines, fancy infotainment systems, and innovative safety features. And that’s great. You should be thinking about those things. But something else that should be on your mind is how you’ll finance your dream car. And that’s where we come in.
Our finance department at Ron Hibbard Toyota has been helping drivers in Nashville, Gallatin, and Madison drive home in shiny new Toyota models for many years. Today, we’re here to give you five tips for financing a new car. When you’re ready, visit our finance center to get started.
Tip #1: Determine Your Budget.
Before you decide on what car you want to drive around town in, you’ll need to determine how much you can afford to pay per month. A good rule of thumb is to spend no more than 25% of your monthly income on a car. Also, keep in mind that your monthly vehicle payments will include gas, car insurance, and routine maintenance.
Make a list of all your monthly household expenses, including groceries and rent, as well as any extra costs like clothes or weekend getaways. After seeing what your expenses are vs your monthly income, you’ll be able to figure out how much you can afford to pay each month on a car.
Tip #2: Decide Whether You Want to Lease or Buy.
When it comes to getting a new car, you can either lease or buy it. If you opt to lease, you’re paying for the depreciation of the car within your lease term agreement. This could be anywhere from a few months to a few years. After your lease term is up, you can either bring the car back to the dealership and get a new lease, or you can buy the vehicle.
If you choose to buy the vehicle, you’ll most likely take out a car loan. Here, you’re paying off the entire purchase of the car, as well as interest and other taxes and fees.
Whether you want to lease or buy is entirely up to you, as they each have their own benefits. You can always check out more information on leasing vs. buying here.
Tip #3: Check Your Credit History.
One factor that goes into a car loan is your credit history, which is represented by a three-digit credit score.
A credit score can range from 300 to 850, and is provided by three major credit bureaus: Equifax®, Experian®, and TransUnion®. Your score is determined by what types of credit you’re paying, including student loans, credit cards, and a mortgage. How much money you owe and if you’ve been late on any payments will factor into your credit score.
The good news is that anyone can take out a car loan, no matter what their credit score is. But it helps to understand your credit history and how that’ll count toward buying a new car.
Tip #4: Take a Test Drive (or Two).
You’ve determined your monthly budget, decided on leasing or buying, and now know your credit history. Based on those factors, you’ve put together a list of the vehicles you’re most interested in with the features you want. Now, it’s time to narrow down that wish list by taking test drives.
For each test drive, it’s important to take a good look around the outside and inside the vehicle. Get behind the wheel, make sure you’re comfortable, and try out all the controls to make sure they’re working properly. Ask lots of questions, and take notes after the drive is done. Also, don’t be afraid to take another test drive of the same vehicle so you’re positive that it’s the one you want.
Tip #5: Get Approved Before Visiting the Dealership.
Our finance experts make the financing process quick and easy. But, it can go even more smoothly when you get started from the comfort of your home today.
You can fill out our short and secure pre-approval form online. You could determine how much your current vehicle would be worth if you decide to trade it in. Or, you can check out our payment calculator to estimate how much your monthly payments would be on a loan or lease.
Finance Your New Car with Us Today!
With these five tips on financing a new car, you’ll be driving off the lot in a brand-new Toyota sedan, truck, or SUV before you know it. If you live in the Nashville, Gallatin, or Madison areas, contact our finance team at Ron Hibbard Toyota today to get started on the car buying process.