by Emily Hechler 
When shopping for a car, you have to make numerous decisions that will impact the next several years of your life and finances. Do you need front-wheel drive or all-wheel drive? Should you buy electric or gas? Let’s walk through some essential car basics and then dig into other nicer but realistic options. While finding a car can take time, these tips can help you make the best decision, so you’ll know you have found the perfect one for you.
Before you even start thinking through these essentials, keep in mind that a car is an investment in your current self but also in your future self. It’s important to consider your needs now and estimate what your needs might be a few years down the road. Auto loans typically range from 36 months – 84 months. You don’t want to find yourself needing to purchase a different car while you’re still paying off your first one.
Car Wants vs Needs
The first step to finding the perfect car is determining what you need versus want in a car. as you research, you may discover that your needs can’t be met within a reasonable budget. If that’s the case, save more over the next few months until you can afford what you need in your car. If you need a car urgently, reevaluate your needs versus wants so you can compromise on a car that fits your lifestyle and budget. Here are important factors to think through to determine your needs or wants.
Car Size
Consider the size of a car that you need. If you’re a teen looking for a car to drive to school and for day trips with friends, a sedan is a great option. This size car will also serve you well in the near future when you attend college or start working full-time. If you want to start a family in the next couple of years or you already have kids, a larger vehicle like an SUV or minivan could be for you.
Climate and Environment
Next, consider the environment that you live in. Us who live in the Greater St. Louis area can confidently rely on a front-wheel drive. Since the area is pretty flat and we don’t get a lot of snow each winter, our vehicles don’t need the power of an all-wheel drive. However, if you know you’ll have to drive lengths to your job in unideal weather conditions (such as a medical worker or first responder), you might want to consider an all-wheel drive to be safe. All-wheel drive cars tend to come at a higher cost than front wheel drive cars.
Safety Features
Another major consideration is the safety features that are available for the car. While some features only come with higher trim levels (the version of a vehicle that comes with certain features and equipment) which are more costly, some dealers can add these features custom to your car. Others are becoming more widely available on lower trim levels. Forward collision warning can automatically deploy the brakes if you get too close to the car in front of you. Lane departure warning will vibrate your steering wheel to alert you that you are about to cross into another lane. Rear parking sensors and a rear-view camera can help you back into a parking spot without hitting another object. A rear-view camera is an essential for me, but I can get by without features like forward collision warning.
Upfront Cost
A major consideration for buying a car is the upfront cost of the car. A good rule to follow is to put down 20% toward a new car and 10% for a used car. Since new cars tend to cost more than the used versions with the same trim level, you could pay significantly more up front for a new car than for a used car. In addition to your upfront cost, your monthly payment will also differ. Our Compare Two Vehicle Loans calculator can help you see how much you will pay monthly for two different cars.
Car History
Another factor to note is the car’s history. When you buy a new car, you don’t need to worry about its history. However, used cars could have neglected maintenance or have been in accidents. Websites like CARFAX give reports on cars so you can know how well the car was maintained before making your purchase. Keep in mind that CARFAX reports only show work that was done at a body shop. If the car’s owner tightened the brakes or changed the oil, this won’t be shown on the report.
Insurance Expenses
Don’t forget about insurance! Insurance for new cars tends to cost more than insurance for used cars. Many insurance companies will give you a quote if you have a car’s VIN number (vehicle identification number), so you can know how much you will pay for insurance before even buying a car.
Researching which car to buy can take some time. With these thoughts in mind, you can make an informed decision and find the best next car for you.
Electric Vehicles vs Gas Cars
A practical but luxurious feature in newer cars is the possibility of driving electric. As electric vehicles become more prominent, they may become a realistic option for you to buy. Here are some key differences between electric vehicles and gas-powered cars.
Fuel Efficiency
Electric vehicles can be a great solution if you are concerned about fuel efficiency. On gas vehicles, you can find the MPG, or miles per gallon. This set of numbers shows approximately how far a car can drive on the highway and city roads with one gallon of gas. Hybrid vehicles, cars that are both gas and electric powered, tend to have higher MPGs than solely gas vehicles. However, this isn’t a completely fair comparison because the hybrid vehicle can go farther because of the electric battery. On the other hand, you can spend less money on gas with a hybrid vehicle because it can go farther thanks to the battery.
Cost of Electric Vehicles
When considering purchasing an electric vehicle, keep in mind that even though the car has a better MPG, you will likely be paying more up front for the vehicle. Electric vehicles tend to have a higher MSRP, or manufacturer’s suggested retail price. This will likely result in a larger down payment and larger monthly payments too. However, the U.S. Department of Energy offers tax credits for electric vehicles. This can help balance the price difference between gas and electric cars.
Convenient Charging Stations
Research the availability of charging stations near you. The Greater St. Louis area has a decent amount of charging stations. However, a stop at a charging station can take around half an hour. Some have resorted to installing charging stations at their homes so they can charge their cars overnight. This can be costly work to do. Your electric bill will also cost more each month, but you aren’t paying for gas.
Warning for Electric Vehicles
While this shouldn’t be a determining factor, it’s important to note the complications from an electric vehicle being in a car accident. When an electric vehicle is in a moderate to major accident, the wheels on the car will lock. This prevents the car from rolling out of control down the road. However, it does mean that the car has to be towed, since it can’t be driven away from the scene of the accident. It can also cost more to repair since the wheels have to be unlocked before the car can be driven again.
Steps to Get a Car Loan
Now that you’ve decided which car you want to buy, you need to know how to buy it. While you may be able to afford paying for a car in cash, many people borrow an auto loan to finance their purchase. Here are the steps to getting a car loan while keeping control of the situation and making your money work for you.
Calculate Your Monthly Payment
Before signing any paperwork, this is the time to make sure you can afford your car payment. use our Calculate a Vehicle Payment calculator to do the math for you. Enter your car’s purchase price, rebate offers, sales tax, and trade in information to start. Next, add various loan terms, data-based interest rates, and your down payment savings to calculate how much you will be paying monthly for your car loan. If you’re happy with the monthly payment amount, you’re ready to apply for a loan.
Apply for a Car Loan
Visit a local Alltru Credit Union branch or apply online for a car loan with us. As a credit union member, you can often get a lower rate than what dealership financing will offer. Your application will ask for some financial details and your car information. We’ll also do a hard credit pull to look at your credit report. This will determine your interest rate. If you have a trusted relative or friend with a high credit score, they may be willing to cosign for you to help you get an even lower interest rate.
Get Preapproved
Within a business day, we’ll preapprove your application. This gives you leverage at the dealership to negotiate the price on your car since you can prove that you will purchase a car in the upcoming days. Before you visit the dealership, review our blog about car shopping terminology so you understand what the salesperson tells you about the car and your financing.
At the dealership, make sure you still test drive the car you want to ensure prime condition. Then, you can start the purchase process with the dealer.
Make It Official
Once you reach a deal, send us the purchase agreement so we can send the preapproved loan funds to the dealer. And that’s it! You’re the owner of a new or new-to-you car. Make sure you contact your insurance company again to let them know about your purchase so you can get the correct coverage added to your plan.
Start Planning for Your Next Car
Choosing the right car is finding a vehicle that fits your lifestyle, budget, and future plans. By taking the time to weigh your needs versus wants, understand your financing options, and research long-term costs like insurance, fuel, and maintenance, you can feel confident in your decision. Whether you choose gas or electric, new or used, the best car is one that supports your goals and keeps your finances on track. With careful planning and the right lender, you can be confident that you chose the perfect car for you.
