Homes and cars – often the biggest-ticket items that people purchase.  It’s important to not only be smart about what you buy, but to be smart about how you finance what you buy. Here are four tips and tricks to keep in mind throughout car loan process.

Tip #1: Shop for a loan —just like you shop for a car

Compare!  People typically go to a dealership & pick out their favorite new or used car – never considering how they will finance the vehicle.  It’s almost like the loan is an afterthought.  Put some thought and do a little homework on where you will get your loan – from the dealership, a bank, or your favorite credit union. 

You’ll want to choose the lender that has the best rates, has an easy and convenient application process and can provide quick approval.

 Tip #2: Get pre-approved!

Pre-approval isn’t just for mortgages!  Save time and frustration by getting preapproved for your loan.  This helps in multiple ways.  1.  You’ll know exactly how big of a loan you can afford, so you can look at cars that are within your budget.  2.  It eliminates surprises.  You’ll know ahead of time if you’ll need a down payment, a co-signer, verification of income, etc.  3. It saves time when you’re ready to purchase!

Tip #3: Make choices about your budget that promote your financial wellness

Before you apply for your car loan, review your own finances and budget. Ask yourself the following questions before settling on a car price range.

What down payment can you afford, and how will that affect the monthly payments.  Don’t forget to check with your insurance company to see how much your monthly insurance premiums will be.  What kind of gas mileage does the car get, how will you be using the car, and what kind of maintenance and upkeep will need to go into the vehicle to keep it in tip top condition.  All of these things affect your financial well being.

Tip #4: Weigh the advantages of new cars vs. used cars

New or used – that decision depends on your specific needs and budget.  New cars have great new technology, the latest safety features and often have better fuel efficiency.  They also have no wear and tear, no accident reports, and warranty coverages will likely be better.  However, new cars are more expensive and depreciate in value  20 percent or more the second you drive them off the lot.  Meaning you’ll owe more than it’s worth unless you put down a significant down payment.

Used cars are generally more affordable, and the value depreciation that occurs has already taken place. You certainly want to make sure you’ve done your homework on used cars.  Make sure the vehicle hasn’t been in any major accidents and you’ll need to make sure you have warranty coverages.  Consider buying a certified pre-owned vehicle – they are generally newer models with low mileage and sold by the dealership network of the brand. 


Be sure to talk to your lender about the differences between loans for new and used cars. WesTex offers loans for both, with great low credit union rates, and our loan associates can guide you through the options and help you make smart financial choices when it comes to buying a car.