Shopping for a new car at Bowditch Ford in Newport News can be much fun. Yet, you will likely need financing to buy the vehicle you want. Therefore, finding the ideal car that fits your lifestyle and budget is essential. Still, it is best to figure out how to pay for it and apply for a car loan early in the car-buying process. Here are a few tips for getting an auto loan that fits your budget.
Plan Ahead
Our customers around Hampton commonly postpone thinking about financing until they find the car they want to buy. Unfortunately, that could lead to paying too much for an auto loan. So, before you visit our dealership in Newport News to buy a car, you should know the type of car you want, how much you can afford, and have a plan to obtain financing that fits your budget. The financing department at our dealership can help you arrange the financing you need.
Credit Report
A credit report provides lenders around Yorktown with an overview of your credit history. The first thing a lender will look at is your credit score. A credit score is a number that represents the data from the credit report and provides the lender with a glimpse of your creditworthiness and capacity to repay an auto loan.
A high credit score of around 700 to a maximum of 850 suggests a reasonable possibility of repaying the debt. A score below 700 indicates a higher likelihood that you may have trouble repaying the loan. A high credit score is best so you can qualify for a high loan with a lower interest rate.
What do you need to qualify for an auto loan?
You do not need a lot of paperwork or documents to qualify for an auto loan. Yet, lenders around Williamsburg will need several pieces of information before they can pre-approve you for a loan. This information includes:
- Proof of identity and residence, such as a driver's license or a government-issued ID
- Proof of income, such as a bank statement or paycheck stub
- Proof of credit and banking history from a credit report
- Vehicle information, such as the year, make, model, and price
Improving Your Chances of Getting an Auto Loan
Your credit score will significantly impact how much you are eligible to borrow while looking for a new car. You can boost your credit score by making on-time payments and paying off your debt. Yet, many other factors can increase your chances of getting an auto loan. These include:
- Keep your monthly debt payments at less than 40% of your monthly income
- Provide a large down payment of at least 20%
- Consider having a spouse or family member become a co-signer if they are willing to take on the risk
The Costs Associated with Buying a Car
Buying a car should be easy. Yet, there are so many different fees and taxes to consider that it can take time to determine what is reasonable. Therefore, it is wise to plan your maximum price with taxes and fees to stay within your budget. You can anticipate paying an additional 12–15% in taxes and fees. These additional costs include the following:
- Sales tax
- License, registration, and documentation fees
- Destination, dealer preparation, and advertising fees
Some of these additional expenses are negotiable. These expenses also do not include add-ons, like tinted windows or all-season floor mats.
Visit Bowditch Ford Near Virginia Beach Today
We have helped many drivers in Suffolk and Virginia Beach finance a new car at our dealership. Contact our dealership's finance department if you have any questions.