Completing Your Car Purchase

Completing Your Car Purchase

Step one, finding your car: complete. Step two: commence. Your vehicular dreams are about to come true, but what happens now? The paperwork involved with transferring a car is shockingly less painful than other large purchases, like a house.

Loans and interest and lions, oh my. If you're lucky enough to be reading this atop your pile of cash, then this bullet isn't important to you. For the rest of us, a car loan will be necessary to obtain our dream cars. If you are buying a new car from a dealership or a used car from a dealer or reseller (such as Carmax), they will offer you a loan when selling the vehicle. Here's what you should be looking at:

  • Interest Rate. The current interest rates are between 6% to 7%. If you're a first time purchaser, the rate may be up to 8%. Anything over that and something is seriously wrong. This applies to loans from the dealership or the bank. If you are getting a car loan, the rate should be in that range. Personal loans are available at banks, but the interest will run very high, usually 12-14%.
  • Term of Loan. Generally, the term of the loan will be 36 months, but it is possible to get a loan out to 5 years (60 months). When applying for the loan, the loan officer will ask you to pick the term. The choice is up to you, but the longer the term, the more you'll pay in interest.
  • Monthly Payment. This is the most important number. You will be saddled with this for a long time, so make sure it's possible for you to afford in all situations. Ideally, you have already made a budget and therefore can easily verify what you can afford.

Applying for a Loan. With your first loan, a lot of questions will seem suspect and intrusive, but they are required for loan processing. Since the economic downturn, banks and credit institutions are less likely to approve your loan and therefore, you should make sure everything is in order. The large factors that your loan is judged against are:

  • Credit Score. It's talked about a lot and yes, it's very important. Generally, if you're over 640, everything should be fine. If it's below that, you may want to consider a co-signer, even if they aren't going to pay.
  • Income. The loan processor will be looking for your income to easily cover the loan over the next year or two.
  • Other Debt. Other loans, particularly house payments, will take a bit away from you. The less debt you have, the more likely you are to pay it all back.
  • Car Worth. The blue book value is a good place to start. Should you default on the loan, your car will be taken and sold at auction. The more the car is worth of the total loan, the better.
  • Mileage. If you're buying a used car, the less mileage on it, the better.

Insurance. Before you pick up the car, make sure to get it insured. Shop around for the best policy for you before picking one as you'll be stuck with it for a long time. You'll be able to purchase a policy for your car prior to owning it. An ID will be given that you should write down. Should you get in an accident or pulled over prior to the physical card reaching you, that number will be your only proof of insurance.

Transferring Ownership. So you've paid for your car. It's now time to tell the government about it! Get in your newly-acquired love machine and drive over to your nearest Currency Exchange. There you will fill out a few forms and receive your lovely temporary license plate. Four to six weeks after that, your real license plate will appear in the mail. There will be a small processing fee, usually around $20-50, for transferring ownership.

Registration. Visit your local Clerk's office to fill out your registration. There will be a small fee, usually only $15-25, to register with the city.
Now you have your vehicle and can gallivant around town, scaring the small, furry creatures that get in your path. Hopefully the car is sufficient that all wildlife is safely avoided and your days of cruisin' and bruisin' last forever and a day. Happy travels.