How To Afford Your Next Vehicle With an Auto Loan
For most of us, our vehicles are an essential part of daily life. We commute to work, pick up kids, grab groceries, and maybe even take the car on a long road trip.
Because we spend so much time in our cars, having a vehicle that fits your needs and lifestyle is crucial. Nothing is worse than being pressed for time and discovering at the last moment that your vehicle isn’t functioning or needs a costly repair. (Insert frustrated scream here.)
At the same time, a vehicle can consume a substantial portion of your budget, especially when you include the costs of maintenance, gas, and insurance. As if that’s not enough, car prices have increased significantly over the last several years.
Given these financial realities, it’s worth asking the question:
How do people afford quality vehicles?
The solution most drivers turn to is an auto loan.
For the majority of people, paying cash up front for the full price of a car, truck, or minivan simply isn’t realistic. In addition, given the recurring costs of car maintenance and repairs, many people prefer to have their car payment as a fixed monthly cost, rather than an unpredictable (and very large) occasional cost.
If you’re one of these prospective buyers, you might be wondering, how much can I afford with an auto loan?
Understanding How Auto Loans Work
An auto loan is essentially a loan that covers the cost of your vehicle. You borrow a set amount from the lender, then repay it in monthly installments over an agreed-upon period of time, commonly referred to as the term. Your monthly payment depends on three main factors: the amount you borrow, the loan term, and the interest rate.
For example, imagine you’re buying a car for $25,000 with a loan term of 60 months at a 6% interest rate. Your monthly payment would be around $483. If you increase the term to 72 months, the monthly payment drops to about $414, though you will pay more in interest over time. Shorter terms usually mean higher monthly payments but less interest overall.
Why Choose CME Federal Credit Union for Your Auto Loan
Because interest rates and terms have such an impact on your bottom line, it’s good to shop around for the best auto loan rates.
CME Federal Credit Union offers a range of flexible options for new and used car buyers. Whether you’re shopping for a compact car, family SUV, or pickup truck, CME members enjoy competitive rates and terms up to 84 months.
Pre-Approval for an Auto Loan
Getting pre-approved for an auto loan before visiting a dealership is a smart move. Pre-approval gives you a clear idea of your budget, strengthens your negotiating position, and speeds up the buying process. Many credit unions, including CME, have a simple pre-approval process that you can complete online, over the phone, or in person.
Refinancing Your Auto Loan
Even if you already have a loan, refinancing might be worth considering. Refinancing replaces your existing loan with a new one, often at a lower rate or with better terms. This can reduce your monthly payment or help you pay off your loan faster. CME can guide members through the refinancing process to ensure it makes financial sense for your situation.
Making the Auto Loan Process Simple
Buying a car can feel intimidating without the added burden of a complex loan approval process. At CME, we take an approach that focuses on clarity, flexibility, and member support.
From initial application to approved funding, the process is designed to get you behind the wheel with as little hassle as possible. You can also benefit from personalized guidance if you’re rebuilding credit or need a little extra help qualifying. We even have a car buying service available to members in Central Ohio.
If you find yourself frustrated with your current vehicle, looking to upgrade for better features, or seeking a better loan for your current vehicle, CME can serve as a trusted partner in the auto financing process. With low auto loan rates, flexible terms, and a simple process, we can help you purchase your next vehicle without losing your mind or busting your budget.
Start your auto loan journey today and see how CME can help you get the car you want at a monthly payment you can manage.
Apply online, visit a branch, or explore our auto loans page to learn more.