Steps to Take Before Taking Out An Auto Loan

April through August are prime car shopping times each year, and the auto industry, as well as the auto loan industry, know that this is the time when they will make the most of their money. On average, 7.6 million cars are purchased each year during these five months.

This year, if you are among one of those looking to add a new car loan to your finances, you need to take a look at them first. According to AWARE, Americans Well-informed on Automobile Retailing Economics, April is a good time for consumers to review their finances before taking on more debt.

AWARE has six steps that they would like you to take:

1. Develop a monthly budget so that you know exactly how much you are bringing in as opposed to what you are spending.

2. Look at any automobile related expenses that you already have, and break them into categories for monthly payments, car insurance, gasoline, maintenance, and property taxes if applicable.

3. Look at how much you might actually be able to put on the car as a down payment. If you are looking to get a lower monthly payment than what you currently have, put more money down than before and that will shave money off monthly.

4. Shop around for the best financing for your auto loan – look into credit unions, banks, etc.

5. Estimate how much your new payment will be.

6. Compare your expenses between what you have now and what you will be paying.

On their web site they also have different calculators that you can use to determine some of the different steps outlined above, as well as different tips and advice, check out their site at www.autofinancing101.org.

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