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Helpful tips for financing a used vehicle

The branch manager of Sudbury Credit Union offers some advice for financing your next vehicle

Buying a used vehicle can sometimes be a little confusing, but it doesn’t have to be. We sat down with David Blackburn, Branch Manager at Sudbury Credit Union, to learn more about financing and budgeting for a new-to-you vehicle.

According to David, the three most important things to consider when buying a vehicle are your budget, your credit score, and getting pre-approval.

Always Start with Your Budget

Having good budgeting habits helps when it comes time to buying a vehicle. David suggests setting aside 5% to 10% of your paycheque each month in a savings account that is not attached to your debit card. “After a while these funds will add up. When it comes time for you to make that car purchase, you will have a larger down payment which will allow you to afford a better vehicle or can help to lower your monthly payments,” he explains.

Before you begin actively shopping for a vehicle, figure out how much you can reasonably fit into your budget.

“Knowing your budget and how much you can afford to spend each month, on any type of purchase, is key to ensuring that you can continue to make those payments for the life of the loan,” says David. “Every few months, you should re-visit your budget to ensure that it still fits your life. Things change over time - a different job, receiving an increase in pay, a change in family structure, and personal goals, to name a few. As your needs change, so should your budget.”

A Good Credit Score Goes a Long Way

Making sure that you can pay your vehicle loan payments on time for the life of the loan as well as keeping up with your other bills is incredibly important to maintaining a healthy credit score. Good credit helps you to secure better rates on future vehicle loans, mortgages, or other financial products. Some employers even use credit scores as part of their hiring process.

“The better you are at paying your bills on time, the better your credit score will be. The better your credit score, the better the rate you will be able to secure for your vehicle loan,” says David.

Pre-Approval is Key to Staying on Budget

One way to avoid overreaching on your vehicle purchase is to secure pre-approval for vehicle financing before you start shopping. This way, you have a firm dollar amount to work with that will help you to stay within your budget.

David explains, “Getting pre-approved for a car loan allows you to go shopping for a vehicle that realistically meets both your needs and your budget. Pre-approval helps you avoid saying yes to options that you might not need or be able to afford.”

The helpful team at Sudbury Credit Union can help you navigate a vehicle loan without hassle or pressure.

“When you sit down with one of our advisors, we take the time to get to know you and your needs. We will then help guide you through the steps required to obtain a vehicle loan and purchase your car. We help to ensure that the loan is affordable and we provide different financing options to suit you. If your credit score is low, we can also provide additional advice to help increase it,” says David.

For more information about vehicle loans from Sudbury Credit Union or to learn about their other financial services, visit them online or contact one of their six local branches directly.