BLOG

Can You Afford That Car? We Can Help!

Image

Can You Afford That Car? We Can Help!

Buying a new car is exciting, even if it’s a used car that’s new to you. But that new car excitement wears off soon, so make sure you feel confident that you can afford the car you want. Before you start hunting for a car, your first step should be to calculate what you can afford so you are not struggling to pay for all the expenses that go along with a new car. The financial experts at LA Financial Credit Union share these tips for figuring out how much you can afford. And, when you finance your new car with LA Financial, we have a few ways to reduce your auto loan rate.

Calculate Your Car Payment

It’s best to calculate how much car you can afford based on your take-home pay, not your gross income. This will give you a more realistic view of what you can afford. Financial experts suggest not spending more than 10% of your take-home pay on your monthly auto loan payment. So, if your after-tax pay is $6,000 a month, you should be able to afford a $600 car payment. You can take the auto loan for a longer term to reduce your payment but realize you will be paying more in interest. Use our calculator to estimate your monthly car payments.

Get Pre-Approved For an Auto Loan

The best way to know how much you will be able to borrow is to get pre-approved for an auto loan. The dollar amount that you are approved for and the annual percentage rate (APR) you will pay is based on your credit score, the loan term, which is how many months you take the loan for, and whether you’re buying a new or used car. New car loans tend to have lower APRs than used cars.

Get pre-approved now >

Let LA Financial Help With Buying and Financing Your New Car

As a credit union, we have some of the best auto loan rates around. On top of our great rates, you can also get a 0.25%* rate reduction when you autopay your loan from an LA Financial checking account. And if you sign up for payroll direct deposit to an LA Financial account, you will get an additional 0.25%* rate reduction.

We can also help you buy your next vehicle. Autoland, our free concierge car-finding service, will do all the hard work of finding a vehicle, providing haggle-free competitive pricing, handling the trade-in, and even delivering it to your home. Autoland's buying power and large auto network help members get great value on a vehicle purchase and trade-in.

Learn more about Autoland.

If you have any questions, please contact us at 1-800-894-1200 or visit a branch.


*APR=Annual Percentage Rate. As an example, at 6.74% APR, your monthly payments are just $19.74 per $1,000 borrowed for 60 months. Discounted rate includes 0.25% reduction for automatic payment from LA Financial Credit Union Checking Account. Up to 125% Loan-to-Value financing on new auto loans and up to 115% Loan-to-Value financing on used auto loans on approved credit. Up to 100% Loan-to-Value applies on all cash-out refinances and first-time auto buyers. All rates are quoted on approved credit as Annual Percentage Rates (APRs). Some restrictions may apply. Loan approval subject to credit and income evaluation. Consumer loan rates may vary depending on credit profile, term, mileage, and the amount financed. Rates and terms are subject to change without notice.