Tuesday, August 6, 2019

Buying a Car Soon? 4 Ways to Prep Your Pocketbook Beforehand

Buying a vehicle is a major investment, and you will need to plan ahead if you want to preserve your finances. With a solid plan in place, you should be able to avoid some of the most common mistakes that car buyers make.

Improve Your Credit Score

Well before you apply for a car loan, you need to take a close look at your credit score. That number is going to have a huge impact on your financing options, and increasing your credit score by just a few points could save you thousands in the coming years. 

The easiest way to boost your credit score is to pay down your balance on a few credit cards. You must also contest any blemishes on your credit report that you believe is incorrect.

Set Aside an Emergency Fund

Even though most modern vehicles are incredibly durable, a breakdown could still occur at any time. While your insurance or the warranty should pay for the repairs eventually, you might need to cover the costs initially. 

Having a small emergency fund will allow you to take care of smaller repairs such as flat tires, cracked windows, or blown fuses. You might also want to set aside a little bit of money for basic maintenance like oil changes and rotating the tires.

Start Researching Auto Loans

Saving up for a down payment is going to help you in the long run, but you will probably still need to take out a loan. Many different organizations offer auto loans, and you should spend some time researching all of the different lenders that you are considering. 

It might be tempting to get your auto loan through the dealership, but those parties rarely offer competitive rates. Getting pre-approved for an auto loan before you get to the dealership is going to make your life much easier.

Ask about Warranties

Most dealerships offer limited warranties on their vehicles, but you might want to think about getting an extended warranty as well. With an extended warranty, you can rest assured that your vehicle is going to be covered if any of the parts are defective or there is a recall for your vehicle. Some warranties even cover major repairs as long as they happen with a certain period of time.

After you have been handed the keys to your new vehicle, you must make sure that you keep it properly maintained. A little bit of maintenance will reduce your risk of major mechanical problems down the road.

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