When you purchase a new automobile, there is nothing more stressful than sitting in the Finance and Insurance office waiting to speak with a manager. With all of the dealership’s taxes, fees, and other additional costs, oftentimes, this can be the moment when all your hopes and dreams of driving that new vehicle are quickly dashed when you find out how much it will fully cost you.

Auto experts recommend knowing all that you can about your financial status before stopping by the dealership. This includes your credit score, monthly net income, and current debts and liabilities. When considering financing a new vehicle or re-financing your current auto loan, be sure to ask yourself the following questions before making your decision.

Is it smarter for me to lease or buy the vehicle?

One of the biggest decisions when considering a new car is to choose whether you want to buy or lease the new automobile. Each side has its set of pros and cons, however, most experts recommend buying rather than leasing as it is a better investment of your money. However, if you think you will be looking for a new vehicle in a few years or don’t have a lot of money to spend on a down payment, leasing may better be the better option for you.

How much should my car payment be?

Every car buying budget will be different, but if you are financing the automobile that you wish you buy, you must consider your monthly payment. As a general rule of thumb, it is suggested that your car payment does not exceed 20% of your take-home pay. This rule should include all financed vehicles in your household, whether you have one or ten cars in your garage.

How long should I finance my car for?

The terms of your financing period depend on what you qualify for, of course, but there are a few things to keep in the back of your mind when choosing how long you wish to keep your auto loan. For instance, for many auto loans, the interest rate will increase with time. To avoid paying this higher interest rate for an extended period of time, try limiting the length of your loan, if you can afford to do so.

Also consider how much the vehicle will lose its equity over the length of your auto loan. And if you see yourself having the urge to get a new vehicle a few years down the road, it might be best to check out a shorter loan period.

How much can I refinance?

Before picking a random price range that you feel comfortable with, consider thinking about the outside factors that can drive up the overall cost of your vehicle. Factors such as the finance rate, loan term, value of your trade-in (if you have one), and down payment amount, can all affect how much you will end up paying in the end for your automobile. Instead of merely picking a price range, use an online loan calculator to assist you with deciding how much you can afford to spend on your automobile.

What is the current climate for financing?

Even years after our economy plummeted, it can still be difficult to find auto financing. When looking at your options, think of what the interest rates are currently, the lengths for financing periods that you were offered, and how easy it is for you to obtain your loan.

Am I considering all of my options?

Many drivers believe that the only place that they will find assistance with their auto finance needs is at the dealership. However, the majority of drivers have plenty of other options out there to find lending assistance. Consider checking out a third-party company or online loan tool to fully examine all of your options. Although, if deciding to go with a third-party provider, make sure they are a trusted site such as MyAutoLoan.com that provides up to 4 loan offers with fast and free service.

Should I refinance my car loan?

It is always a great day to consider your re-finance options. With a bettering economy or credit score, you may qualify for a lower interest rate. If you recently found a better paying position, you might be able to afford larger payments and shorten your loan length. And if the opposite has happened, leading to financial troubles, refinancing could lower your monthly payments and save you money in the long-run.

Remember to ask yourself the following questions but to also do your own research to ensure that you save as much money as possible and get the best deal when purchasing your vehicle. It isn’t always an exact science, but knowing as much as possible before you head to the dealership could be the difference between losing hundreds of dollars and saving thousands!

And remember, every single new or used automobile wasn’t built to last forever. With the current price of repairs these days, you would hate to have to worry about an expensive car payment AND an alarmingly high repair bill in the event that your vehicle were to ever break down. That’s where Endurance can help! You can get a vehicle service contract, commonly referred to as an extended auto warranty, with an affordable monthly payment and zero added fees. Protecting your car has never been so important and affordable, call us today!

*A Vehicle Service Contract (VSC) is often referred to as an “extended auto warranty”, but is not a warranty.  A VSC does, however, provide repair coverage for your vehicle after the manufacturer’s warranty expires. A VSC is a contract between you and a VSC provider or administrator that states what is a covered repair and what is not. Endurance is an administrator of VSCs and does not sell warranties.*