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Easy Auto Loans: 9 Tips for Buying Your Next Car

by Josh McAlister, Senior Personal Loan Officer

Buying a new or used vehicle is a big decision. And with the prices of SUVs, trucks and cars continuing to rise, understanding all of your options can help you save money, make smart choices and stay in the driver’s seat.

9 Tips for Buying Your Next Car or Truck

From tuning up your credit score to saving 1% with automatic payments, here are nine smart and simple ways to get rolling with your next ride!

  1. Create a budget. It’s important to consider what’s comfortable for you, your family and your spending habits.  

    As a good rule of thumb, many experts recommend following the “20/4/10” rule:

    • 20% down payment: It’s completely up to you! Just keep in mind that making a down payment of 20% or more will lower your loan amount significantly.
    • 4-year loan term: Not all loans are created equal. Often, auto loans for 60- or 72-month terms tend to carry higher interest rates. And the longer the term length, the more likely it is that you could owe more on the vehicle than it’s worth, due to depreciation. Unfortunately, you’re more likely to run into repairs down the road, too.
    • 10% of your income: Generally speaking, it’s best to keep your total car expenses within 10% of your gross income.
  2. Estimate your payment. Not sure where to start? Use our simple auto loan calculator to estimate your payment. It’s a great way to get a quick pulse check and compare different terms, interest rates and down payment amounts.

  3. Check your credit report. Most of us can’t walk into a dealership and pay cash for a new or used vehicle. In fact, 85% of buyers use some form of financing, either directly from their financial institution or from the dealership.

    The good news: the better your credit score, the lower your interest rate.


    Tip: You can request a FREE credit report once every 12 months from all major credit bureaus at annualcreditreport.com. Check out our helpful tips for improving your credit score, too.

  4. Think local. At Gate City Bank, all of our auto loans are approved, financed and serviced locally. That means you’ll always have an experienced lender right down the street, and you’ll never be redirected to a random number if you have any questions. We’ll work with you, making the process simple with low rates and flexible terms.

  5. Remember the “hidden” costs of a car or truck. When you’re considering what kind of vehicle you can afford, don’t forget about additional expenses beyond the sticker price. Keep in mind other costs that can affect your budget, such as:

    • Sales tax
    • Extra add-on features for new vehicles
    • Annual taxes and registration
    • Insurance based on your age, driving record and type of vehicle
    • Extended warranty coverage
    • Fuel costs
    • Maintenance, including tires and repairs

    Doing a little research online about different makes and models can help you get a better idea of expenses.


    Tip: You may want to talk to your insurance agent about rates in advance, too. If you need a hand, Gate City Insurance Agency can assist you with comparing rates at no charge.

  6. Shop around. Once you have a particular make or model in mind, don’t be afraid to look for the best price and compare vehicles at different local dealerships online. It just might help you negotiate a better deal, too.

  7. Get pre-approved. Take us for a test drive! It’s fast, it’s FREE and it takes less than 10 minutes to apply online. Plus, you can shop with confidence – knowing the buying process will be faster and you’ll be able to drive right off the lot in as little as one day.*

  8. Save 1% with auto pay. Did you know that you can receive a 1% discount by setting up automatic payments from your Gate City Bank checking account? It’s a quick and easy way to save on your auto loan – automatically.

  9. Consider refinancing your current vehicle. And last but not least, if you’re just not quite finding the right car due to limited inventory at some dealerships right now, you may want to consider refinancing your current vehicle.

    Depending on the length and terms of your existing auto loan, it can be a smart way to save money and pay off your loan faster. That means you’ll be ready to roll whenever you do find your dream car.

We’ll Help You Navigate the Process
Have any questions or anything else on your mind? Stop by one of our convenient locations to talk with a personal lender, and we’ll be happy to help.

Your next road trip is right around the bend!

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*Subject to collateral approval.


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