You’re looking at the car on the lot right now, and there’s another customer right next to you looking at the exact same car. Even though the car hasn’t changed, your monthly payment will look very different from the other person’s monthly payment because you each have very unique factors.
YOUR CREDIT STANDING
When you apply for a car loan, your credit score is pulled up and two things are considered: Your actual score and your payment history.
Financing Options like with anything else you apply for in America, your credit score affects your eligibility to acquire what you’ve applied for and the terms of your contract. The higher the number, the better your situation. Usually, a score of 700 or higher is ideal. If you have a low score, or no score if you’re just starting out, most places will still allow you to get what you want with the help of a cosigner. With a cosigner, the dealership has a backup person to be responsible for your payment in case you are unable to make one on time.
Your credit history will also help your case as sales people like to see that you’ve already proven yourself responsible in making payments. The longer your history, and with minimal missed payments, the better it will look for you.
THE VEHICLE’S VALUE
Obviously the more expensive the car, the higher the monthly payment. Even if you have the best credit score and a huge down payment, a car’s value is divided throughout your contract so an expensive car still means bigger payments. If you want to find a car that fits your budget, first you need to establish what your budget looks like and then you can compare that to quotes online. Go to the website of any Prieto Automotive location to see a breakdown of pricing on any of our vehicles.
No matter a car’s value, you should still place a down payment as it’ll lower your monthly bill. The bigger the down payment, the less you owe in your financing which means you pay less over time.
THE TERMS OF YOUR CONTRACT
After the dealership has ran your Financing Options and you’ve determined the car’s value, it’s time to discuss the terms of your specific contract. One of those terms is the length of the contract. How many months will you be paying off your loan? The car’s value is spread through the amount of months you’re going to pay, and that helps determine the amount of your monthly payment. For example, a $36,000 loan over 72 months is $500 a month. You can use online calculators to gauge your monthly payment before you sit down with a sales person.
Your contract will also state your annual percentage rate (APR). This interest rate will also affect your monthly payment amount, so keep that in mind when calculating your budget. Sometimes we’ll offer 0% APR for the first few months of your contract. If you want to see if we have any specials, call any Prieto Automotive location.
Keep this information in mind when shopping for your next car. If you need more assistance with financing, you can call any Prieto Automotive stores and our experts will answer any questions you have.