Navigating Your First Car Loan

Getting your first car is an exciting milestone! Whether you’re a new driver or ready to upgrade away from your parent’s vehicle, applying for your first car loan can be thrilling.

To help you hit the road confidently, here are some tips for preparing your credit and choosing the best time to apply for funding.

Understand your credit score

Before applying for a car loan, checking your credit score is crucial. The three-digit FICO score plays a significant role in determining your loan eligibility and interest rates. Those who have never used credit before may not have a score and are typically considered credit invisible. If that’s the case, consider building credit with a secured credit card to establish a positive credit history before requesting a large amount to fund a vehicle loan.

If you have credit history, review your credit report for any inaccuracies that could affect your score. You can obtain your credit report for free once a year from the three major credit bureaus. The Federal Trade Commission provides consumer advice on how to contact Equifax, Experian, and TransUnion.

Reviewing and fixing errors before applying for your first car loan can boost your score, making you a more appealing candidate for lenders.

Prepare your finances

Lenders will also examine your income, debt-to-income ratio, and overall financial health. Before applying, gather documentation that shows your ability to repay the loan. Paperwork should include recent pay stubs, bank statements, and any invoices to show all the forms of income you may have. In general, having this paperwork ready will streamline the application process and demonstrate your preparedness to lenders.

Another key step is to set a budget. Calculate how much you can give towards monthly payments without stretching your finances too thin. A good rule of thumb is to keep your car-related expenses (loan payment, insurance, fuel) under 15% of your monthly income.

Choose the best time to apply

Timing is essential when applying for a car loan. Research shows that interest rates can fluctuate based on market conditions. Keeping this in mind, adjusting your timing will lead to significant savings.

Traditionally, the end of the month is the best time to apply. That’s because dealerships and lenders are usually looking to meet sales targets. Additionally, seasonal sales events, such as end-of-year clearance sales, can provide an excellent opportunity for negotiating better loan terms and vehicle prices.

Fund your first car loan with fewer fees

Don’t settle for just any lender. Experience how Achieva Credit Union is different! We offer lower rates and fewer fees than our big bank competitors.

Plus, for a limited time, receive direct auto loans with free Guaranteed Asset Protection (GAP) valued at $449! You can cover the amount owed on your vehicle in the event of a total loss as you repay your loan.

Apply online, visit any Achieva branch, or call 844.231.5905 to get started!

Buckle up!

By preparing your credit, getting your finances in order, choosing the right time to apply, and exploring lenders with the best rates, you’ll be well on your way to securing your first car loan.

Buckle up and get ready to drive away in style! Whether you choose a new or used vehicle, your car ownership journey will be an exciting process and part of an epic life adventure. Enjoy!

Need more financial content? Continue following the Achieva Life Blog for additional money-saving and lifestyle articles.

Free Guaranteed Asset Protection (GAP) promotional offer terms and conditions subject to change at any time. The GAP promotional offer coverage will be provided on the date the loan is funded for the term of your loan up to 84 months. Certain restrictions apply. Limit one GAP promotional offer per vehicle. Available on purchases and refinances of new and eligible used vehicles with funded loan amounts of $5,000.00 or more from November 1, 2024 to February 28, 2025. Commercial vehicles, Indirect Auto Loans and refinancing of existing Achieva Credit Union vehicle loans are not eligible. Internal refinances may be subject to a $200 refinance fee. If you choose to refinance your loan with Achieva Credit Union, we may be able to reduce your APR. However, if you choose a loan term that is longer than the term left on your current loan, you will pay interest over a longer period of time and the overall cost of the loan may be higher. Rates are subject to change without notice. All loans are subject to approval. Membership qualifications apply.

GAP is not insurance; it is an optional debt cancellation product. GAP will not affect your application for credit or the terms of any credit agreement you have with us. Certain eligibility requirements, conditions and exclusions may apply. Purchase of GAP is optional and will not affect your application for credit or the terms of any existing credit agreement.