How much can you afford to spend on a car? This is an excellent place to start. If you’re going to be making car payments, most financial advisers recommend your payments not exceed 20% of your take-home pay. According to Consumer Financial Protection Bureau, A loan-to-value ratio (LTV) is the total dollar value of your loan divided by the actual cash value (ACV) of your vehicle. It expressed as a percentage.
Do you have a down payment or trade-in?
The ultimate way you can drive down the cost of a new automobile is with a trade-in. Even if your current vehicle is not in the best condition, you will be able to save money. Using https://www.kbb.com/ or similar sites, you fill out a questionnaire that will ask you about the mileage, age, and condition of your current vehicle. Then they will provide you an assessment of the value of your car. The dealer will consider the assessment but does not have to accept the trade. If that is the case, you can privately sell the car on your own at a fair price. Tip: A down payment reduces the loan to value ratio of your investment.
Do you have a new vehicle picked out?
Once the Car Loan Value has been established, it will dictate the full amount that can be financed on a used or brand new car purchase. A car which is for sale will have a manufacturer’s suggested retail price (MSRP) or book value of a vehicle. The loan value is established so that the lender can limit the amount it finances on a depreciating asset like a car. To estimate monthly payments for your vehicle loan, try our Loan Calculator. You can also check our current auto lending rates.
TNConnect Credit Union wants to put you in the driver’s seat by offering a full range of auto lending options. It is our commitment to help you meet your financial needs today. Before you purchase a new car, check our current auto lending rates. We pride ourselves on offering competitive auto lending rates!
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