Hello, Young & Free Michigan!
Start your engines! How do you know a car loan is right for you? Here are three ideas to consider:
- Money is power, knowledge is power, and “with great power comes great responsibility”, as our friendly neighborhood Spiderman would say. When deciding whether or not to take out a loan, have the foresight to know whether or not you are able to make monthly payments toward that loan. Budgeting is the key. This means, simply organizing your income in order to see if a car loan will work for you. P.S. Did you know that Michigan First Credit Union offers a 1% auto loan rate discount? With Michigan First, you can “Accelerate into First Gear”.
- An alternative to taking out a loan is leasing a vehicle. Pros to leasing a car include:
• A lower down payment and lower monthly payments
• Driving a “prettier” car for less each month
• Driving a new car every two or three years
• No stress when trading in at the end of the lease
• Only paying sales tax on the portion of the car that is financed
• However, there are cons to leasing your vehicle, as well…
• You will not own the car at the end of the lease
• Mileage is limited to a set amount and excess miles will need to be paid for at lease termination
• Lease contracts tend to be confusing
• Leasing a car is more expensive in the long run, as opposed to buying and owning it
• Wear-and-tear charges paid at the end of the lease can add up.
- Lastly, is there public transportation where you live? Is it reliable? If so, you may not need to obtain an automobile at all. Take advantage of transportation services. The other plus is, you don’t need to purchase car insurance or pay for gas.
When it comes to taking out any kind of loan, you should have a budget in mind, so your credit score doesn’t suffer in the long run. If you are questioning taking out a loan or aren’t confident that you can make those monthly payments, DO NOT DO IT! It is better to have no credit than bad credit! Remember, if you aren’t ready to accelerate with monthly payments, STOP! Let the traffic clear, and proceed with caution! You don’t have to be a super hero to make smart choices about your money!
When you’re Young & Free, you don’t just be!
Until next time,