A ride of one's own: buying a car
Date: Feb/2/2009
Your first car will always have a special place in your heart. It's a symbol of freedom, independence, adulthood. Those warm and fuzzy feelings are just as true whether you're buying your first new car or a pre-loved vehicle. Whichever you choose, the right financing and solid planning make it possible.
- Start by thinking about your needs and your budget.
- Unless you own your own business (and can therefore write off lease payments) or your vehicle is paid for by your employer, taking out a car loan to buy a vehicle is almost always better than leasing. That's because once your loan is paid off, you own your vehicle, but when your lease expires, you don't own anything.
- Remember that a new car depreciates the moment you drive it off the lot. Consider buying pre-owned. Check the history and have a mechanic give it a check-up.
- Do your homework. Investigate the make and model for reliability, durability and gas consumption. This guide to buying a new car can help you with your research.
- Remember to budget for the extras: a down payment, insurance, gas, parking and maintenance.
- Choose a loan term that allows you to pay it off as quickly and aggressively as you can without leaving yourself flat broke. You'll reduce overall interest payments — and you can then channel those car payments into something else, like a down payment for a house.
- Try the RBC Car Loan Calculator.
- If your budget is really tight, consider an RBC Royal Buy-Back® Car Loan, which offers lower payments. You can compare the financials against a regular car loan with this handy calculator.
- Ask for help. Talk to an RBC Credit Specialist, who can advise you about your credit options.
Once your car loan is set up, arrange to have the monthly payments deducted automatically from your bank account. That way, you'll be sure never to miss a payment — and that helps you build a strong and healthy credit rating.
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