Whether it’s your first time buying a new car or your fifth, the experience can still be nerve-wracking. Almost 70% of car buyers report not feeling confident about their decision, which is way too high when considering the price of a brand new automobile. This feeling of apprehension has two major sources:
1: Buying a car is a huge financial milestone, and a bad decision can set you back years.
2: People feel as if they’re not being told the whole story by dealerships and financial providers.
Luckily, residents of Missouri don’t have to worry about this ever again. Equity Bank puts the power back in your hands, providing you with the knowledge and tools to help you budget and buy with confidence. We’ve developed a simple roadmap to help new car buyers get a feel for the process, and listed some of the ways that Equity Bank helps make the journey a little easier.
Making Sense of Auto Loans
While purchasing a car is a huge financial commitment, it doesn’t necessarily have to be an intimidating experience. If you’ve learned about which type of car you need and have saved up a fair amount of money for a down payment, speaking to your financial provider about next steps should go very smoothly.
Starting your car buying journey should always begin with a budget. Only you know how much car you can afford, but a good starting place is the “20/4/10” rule. This simple rule states that you should always put down 20% of the car’s total purchase price, finance the car for no more than 4 years, and that the total annual price of your loan should not exceed 10% of your gross annual income. This rule is prohibitive for some, but ensures that you do not make a financial decision that could ruin your budget or your credit in the future.
Next comes actually acquiring your loan. Many dealerships tempt potential buyers in with attractive sounding deals, but experts agree that it is almost always better to receive an auto loan from a financial provider, as they are less expensive in the long run. Interest rates increase with the lifetime of the loan, which is why the 20/4/10 rule emphasizes that a four-year loan term is best. However, the average car loan term in the US is around 72 months, so don’t worry if you can’t swing the four year term. Just be sure that you factor the payments in for the lifetime of the loan and budget accordingly.
Navigating the Purchasing Process
Once you have your budget arranged and a loan approved by your financial institution, you should be able to shop much more confidently. Many dealerships will try to tempt you into upgraded models or similar but more expensive variants of the vehicle you want to purchase, but it’s important to stay focused on the task at hand and not be swayed by sales tactics.
In some cases, it may be wise to actually do your research individually and pick a car that you know is available before you arrive at a dealership. Once you’re there, you can take the car you’ve chosen for a test drive to make sure everything fits nicely and then go right into the negotiations.
Why Equity Bank Auto Loans are Better for Missouri
In Missouri, as of 2023, the average auto loan term was for 72 months at a rate of 8.5% APR. While this isn’t necessarily bad, Equity Bank offers substantially better terms on better rates, giving Missouri natives a much needed respite from rapidly rising auto prices, rate hikes, and unnecessarily complicated deals.
With Equity Bank, you can pay as little as 8.19% APR for 72 months, potentially saving you thousands over the life of your loan. Equity Bank also gives you the ability to show up to the dealership pre-approved, giving you a stronger hand at the negotiating table and saving you hours of waiting for approval paperwork to be filed. The last thing you want is to turn a stressful, expensive experience into a long, stressful, and expensive experience.
As a community bank, Equity Bank also has the ability to be more flexible with the terms and conditions of our auto loans, allowing us to accommodate more customers at a wider range of budgets. This helps us get you into the car of your dreams without the long back-and-forth you experience at national banks.
Make Auto Loans Easy
Visit your nearest Equity Bank location or contact us online to talk about auto loan options. Our team can help you find an appropriate budget and get you pre-approved, taking the guesswork out of the car buying experience. We hope to hear from you soon!