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Get the Best Deal on Your New Car with O1ne Mortgage

Buying a new car involves thorough research and preparation to secure the best deal. Whether you have a specific make and model in mind or are open to various options, focusing on the financial aspect is crucial. Here are some steps to ensure you get the car you want without exceeding your budget.

1. Check Your Credit Reports and Scores

If you plan to take out a loan for your new car, your credit scores will significantly impact your monthly payments and the overall cost of the loan. Check your FICO® Score to understand your standing. A good credit score can help you get approved with favorable terms, while a lower score might require some improvement before making a purchase.

2. Improve Your Credit

Building your credit takes time, but the potential savings are worth it. Here are some steps to take before buying a new car:

• Catch up on any late payments in your credit file.
• Reduce high credit card balances to lower your credit utilization rate.
• Dispute any incorrect information on your credit report with the appropriate credit reporting agencies.

3. Know Your Budget

Getting a new car is exciting, but it’s essential to ensure the monthly payment fits within your budget. Consider your other financial obligations and goals, as well as your lifestyle expenses. Evaluate your savings to determine if you can afford a down payment, which can reduce your loan amount and monthly payments. Trading in your current car or selling it privately can also increase your down payment.

4. Shop Around for Auto Loans

While some car dealers can arrange financing, you might get a better deal by securing an auto loan independently. Banks, credit unions, and online lenders can preapprove you for a loan based on your credit history, income, expenses, and the vehicle you want to buy. Comparing offers from multiple lenders can help you get the lowest interest rate and save money.

5. Negotiate and Make a Deal

Negotiating is key to getting the best price on your new car. Research the car’s value using Kelley Blue Book or NADA and compare prices at local dealerships. Use this information to negotiate with your preferred dealer. Salespeople often have quotas, so consider visiting the dealership at the end of the month, quarter, or year for potentially better deals.

6. Look at the Total Loan Cost

Dealers often discuss monthly payments, but it’s essential to understand the total loan cost. For example, a $25,000 car with a 5% interest rate over four years results in a $576 monthly payment and $2,635 in interest. A six-year term at 6% lowers the monthly payment to $414 but increases interest to $4,831. Always ask for the total cost to avoid overpaying.

7. Understand Potential Credit Impacts

A car loan can positively or negatively affect your credit, depending on your payment history. Timely payments can boost your credit scores, while missed payments can significantly harm them. Consider setting up automatic payments to ensure timely payments and protect your credit.

Make Sure Buying a New Car Is the Right Choice

The best time to buy a new car is when you need one. However, if your credit needs improvement or you want to save for a larger down payment, it might be better to wait. Avoid waiting until an emergency to buy a car, as it can reduce your negotiating power. Give yourself enough time to research and negotiate to get the best deal. Monitor your credit through Experian to stay informed and take steps to improve your score.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make informed financial decisions with confidence.

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