Resourceful-Mom

Paying for your next car

So, you’re in the market for buying a car?  Have you put any thought into how you are going to pay for the car?  If you are anything like me, your answer is “That’s ALL I’ve been thinking about!”   Well, good, let’s run through some of your options:

• Cash purchase – This, of course, would be the ideal situation.  With all of your other responsibilities and whatever wear and tear problems your car will have, it would be good not to have a car note to boot.  An even more ideal situation would be if you were anticipating the need for a car one day and was able to save for it.  With a few thousand dollars (sometimes less), you can find a decent car.  Believe me, I have heard  the saying “you get what you pay for”  and, for the most part, this is true.  I have also heard the saying “you start where you’re at” and believe this is an equally true statement. I am in no way advocating that you sacrifice the safety of your family by purchasing a car that isn’t safe simply for the purpose of having a car; however, I am saying, keep an open mind and you will be able to find a car.  For safety, we’ll run a get a FREE VIN Check from AutoCheck® before purchasing anything.

• Finance – When financing a car, I prefer to go through a credit union.  The credit union that I have been with for the last 20 years has never required a down payment and I’ve always been able to split my payments in half according to when I received my paycheck.  For me, automatic deduction was the easiest way for me to make my payments. One might say that my relationship with my credit union is based on how long I have been with them but that’s not true.  I purchased my 1st car through the credit union when I was 21 years old and, as a single mother, my credit was less than perfect.  As proof, the interest rate on my 1991 Toyota Tercel (that’s right a new car) was 8% – nothing to brag about; however, my monthly car note was $200 a month.  And, full coverage insurance on a 4 door 4 cylinder wasn’t a hard pill to swallow either….all on $10/hour.

• Signature loan -  A signature loan, often times referred to as a personal loan, doesn’t require collateral (so no need in mentioning purchasing a car) nor is there credit check involved.  When dealing with a credit union, the maximum loan amount would be based on a percentage of your yearly salary.  In the past, it was fairly easy to obtain a loan of this type; however, in our current economy, I would not be surprised if additional guidelines have been implemented.  The interest rate for a signature loan would be higher than that for a regular car loan so, I would only seek this type of loan for purchasing a car in the ballpark of $2,000 in an effort to keep the payment unbelievably low and to enable you to pay off the car quickly.