Here in Rock Springs and the surrounding area — or really just about anywhere else in the United States — we drive to get where we need to go. You’ve no doubt spent countless hours on the interstate weathering through storms, traffic, breakdowns, and the infamous Wyoming wind. Geographically speaking, we live in a massive Country, and our home State is hardly an exception. There’s really no way around it; if you live here, you own a vehicle and you probably drive it on a daily basis.
In fact, our transportation infrastructure relies on personal automobiles to such an extent that it’s a nuisance to others if you don’t have your own ride. Do you remember how many times your parents came to pick you up from school, soccer practice, or your friend’s house? Sure, parents are happy to drive their kids around of course, but as a fully-grown adult, asking friends and family for rides around town is going to get old pretty quick.
Unless you live in the heart of a major urban area like New York City, Boston, Philadelphia, and so forth, relying on public transportation to get around probably isn’t the best idea either. Let’s face it: most places in the United States just aren’t known for a decent public transportation system. And who could blame us? We’re incredibly spread out as a nation, especially west of the Mississippi. The only thing worse than waiting for a bus that may or may not show up is paying exorbitant prices for a rideshare service like Uber or Lyft; those costs are going to multiply very quickly.
Buying a Car Is Practically Inevitable. We Can Help!
So, our point is clear: if you don’t already have a car, you’re going to need to buy one. Buying used is the best way to go in terms of saving money in the short-term, but if you’re an established young professional or someone who makes enough to afford monthly payments, buying new or leasing may be the smarter move in the long-term.
The next installation of our financial planning blog series concerns how to purchase or lease a new vehicle. With the help of our friendly Community Bankers here at Commerce Bank of Wyoming, we’ll make sure that you’re making financially-sound decisions and provide you with any personal loans necessary to obtain a vehicle that’s right for you. Let’s get started.
Make Sure You Know What You Want
Priorities change over the course of years or even months. You might be a sleek young professional in search of a sports car or something that’s fast, but in the event that you decide to settle down and have a family, is that really the right decision?
With leasing, you can have the best of both worlds by “living the automotive dream” for three years. Not only is leasing a great way to build credit, but there’s no long-term commitment to your vehicle. Plus, financing is generally less expensive than if you were to flat-out purchase a new car. When thinking five to ten years in the future or even longer, it’s wise to keep practicality and efficiency in mind.
Determining Your Budget
Understanding what you can realistically afford to spend on a new car comes down to budgeting. Naturally, Commerce Bank of Wyoming can help you troubleshoot any budgeting issues to arrive at a reasonable budget within your means of living. However, it’s a good idea to try and obtain somewhat of a ballpark estimate on your own. We strongly recommend asking yourself the following questions:
- What’s my income on a monthly and annual basis? If your pay is commission-based, are there any “slow” times of the year to look out for?
- What do my spending habits look like? How have I spent my money in the last 6-12 months? Can I eliminate any lavish spending sprees?
- What’s my credit score? If necessary, how can it be approved?
- How can I reduce my expenditures to increase my savings for a down payment?
- How much of a monthly payment can I realistically afford to make?
- Are there other debts or unpaid lines of credit that I need to pay off?
These questions are fairly thorough, but they’re by no means entirely exhaustive. Depending on your situation in life and what you do for work, the answers to these questions vary. The takeaway: think long and hard about your financial situation and use spreadsheets to weigh expenses versus income.
Make Sure Your Credit Score Is Accurate
It’s common knowledge that creditworthiness is a major aspect of getting approved for financing. Though a brand new car is only a fraction of the cost of a brand new house, most people don’t have $20,000+ in cash to throw down on a new car. Therefore, you’ll need to be approved for a car loan prior to signing all of that paperwork. Again, we can help!
What you may not know is that credit reports can sometimes, but not necessarily often, report false or slightly inaccurate information. If you request a free credit report early on before you plan on getting a new car, you can request to resubmit the report to smooth out any errors. There are three major credit reporting bureaus that you can choose from: Experian, TransUnion®, and Equifax® (recent credit fiasco notwithstanding).
With an accurate credit score lined up, you’ll walk into the financing office with more ammunition in your pocket.
Saving For a Down Payment
Generally, but not always, you’ll want to put more of a down payment on a vehicle if you’re outright purchasing it, and less of a down payment if you’re just leasing it. With a lease, even if you plan to buy it out after the lease is done, you’re still in the red on equity, whereas a purchase means that the car is actually yours and you’re free to do with it as you please (mostly drive it, we hope). After a certain point of putting money down on a lease, it’s almost wasted because you’re still going to pay X amount in payments. Our lenders are more than happy to discuss down payments in more detail with you, but at the end of the day, the financing officer at the dealership you’re working with is the true expert on the matter.
Pay Close Attention to the Fine Print
Whether you’re pouring through your loan options or signing your life away on insurance paperwork, remember that buying or leasing a brand new vehicle is a big deal and a major purchase: it’s worth taking the painstaking, tedious effort to look over every single sentence. If necessary, bring a friend or significant other to help you understand exactly what you’re getting into (and drive them to dinner afterward for their time).
When it comes to something like the purchase of a new car, there’s no such thing as being too thorough.
Get In Touch With Commerce Bank of Wyoming For More Resources
Our job is, quite literally, to answer any questions pertaining to your money and overall financial situation. Our friendly Community Bankers have helped countless Rock Springs residents find the right vehicle, and we’re ready to help you next. Get started today!