Buying a Car... The Smart Way!

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Buying a Car... The Smart Way!

By: Nakia Middleton

Let’s face it! In your twenties you have a lot going on. Regardless if you are early or late twenties, we all have something in common; we need cars! At this point you should have had maybe one car or a couple, either way, you always want to make sure you are making a smart purchase. It’s a big deal and it’s better to make comprehensive financial decisions sooner than later. Many of us may need a car to travel to and from work or maybe just because the car looks nice. Nonetheless, you want to know who you’re paying, how long you will be paying for and is this a good piece of collateral? 

Your lender is the entity who will be lending you money; you should want to know all about them!  

Here’s a scenario: You go into the dealership and they say “you’re approved” for the car that you wanted. Your next statement should be “Awesome! Who is my lender?” You want to ask what the interest rate will be and the term and/or stipulations of the loan. These are key components to making an inclusive purchase.

You continuously want to make sure that you are getting the best interest in the market and for your credit score. Furthermore, if a finance professional asks you “do you know your interest rate?” Don’t turn them away so quickly; have a conversation with them and evaluate where you are financially. Being more aware and inquisitive is key to obtaining more financial knowledge.

Two more attributes are the length of time that you will be paying on your car and the actual car that you will be getting! Often times in the finance industry, we refer to your car as “collateral.” The lender will review your collateral ensure that it is worth making a loan.  

For instance, a 2009 Dodge Charger with over 150k miles, may not be worth a 15k auto loan with an interest of 24.99%. Unbeknownst, millennials are victims of this high priced lending. Think of us as the fast food to the auto loan industry; it tastes good, but it may not be the healthiest thing to eat. Purchasing a car is almost exactly the same. You may get approved for the nice car you wanted, but with a ton of miles and being overpriced, it may not be the smartest purchase.

Millennials are driving the industries embedded in our economy and we are thriving! Let’s continue to flourish and make better purchases. Yes, we are only 20 Somethin’ but let’s make better financial decisions now, so that we can avoid financial regrets later. Asking more questions opens you up to a world of answers, which in turns contributes to your comprehension. We are the consumers contributing to the rise of our nation.