There are many things that come into consideration before you make a large purchase. This purchase might be a new ATV, car, boat or even a house. No matter what it is that you have your eye on, take some time to consider the pros and cons as to whether you get a new or used product.

For this example, let’s say that you are going out and planning on purchasing a car. Should you buy a new car, or go with one that has a few miles on it already? Here are 3 things that you should think about before you take that risk and go with your gut feeling:

  • Depreciation
Most cars out there depreciate at a rate of about 15% each year. If you are planning on getting a new car, there is usually a 20% depreciation rate as soon as you drive it off of the lot. This is something that you should do the math on before you leave with the car. This will help make sure that you aren’t upside down within the first few months of owning the car. The more money that you can put down as a down payment, the lower your monthly payments will be and the easier it will be to stay on top of things.
  • Cost-to-own
Most people who go into buy a car just look at the price tag on the car and think, ‘I can afford that’. The truth is, there is a lot more costs that go into a car than what is on the sticker. These costs can include fuel, insurance, maintenance and more. Maintenance costs are very different between manufacturers.
  • How much can you afford?
Come in with an idea of how much you are able to spend. If you walk into a dealership and you find out that they are willing to lend you double the amount that you thought you were going to get, that may not always be the route you want to go. Sometimes you will be enticed by a low monthly payment, often tied to a extremely long loan term. Make sure to ask what the total amount of interest you will be paying is at the rate they give you.

Come into East Idaho Credit Union before you go into a dealership. We can help approve you for a loan that fits your needs and budget. EICU is here to make sure that the decision you make is the best decision for you. We are happy to sit down and explain everything outside of the high-pressure dealership.