Buying a New Car

When I bought my car a few years ago I was not very wise in the way of understanding finances and interest rates, and therefore I found myself with a loan with an 12.99% interest rate.  At the time, I was under a lot of pressure to buy a car.  I was living at home while attending school and my mother decided that she wanted to move into the country.  Since I would be moving with her, I needed transportation to get to work and school nearly 10 miles away.  I couldn’t walk anymore.

My credit score was trashed due to the crash course in finance which I blessed upon myself.  I wasn’t able to find anyone willing to extend a line of credit so that I could purchase a car.  I asked several people to co-sign for me, but was unable to convince anyone that I was capable of making the payments.  After all that I had been through financially, it should have come as no surprise that I wasn’t able to find anyone willing to help me out.

I decided to go car shopping despite not having any credit lined up, nor a penny saved for a down-payment.  I finally found the car that was right for me, a dark blue Chevy Impala with a moonroof.  It was in excellent condition and had low miles.  I fell in love instantly.  I went in to talk to the financing department about what options were available to me.

A few minutes after filling out the loan application the great news came through that I had been approved for the loan.  After having been turned down time and time again by the banks, the news that I was creditworthy filled me with a rush of excitement.  I would be getting my car!  I signed on the dotted lines, hearing the terms of my contract but not really listening.  I knew what the monthly payments would be and that was all that mattered. 

I had bought my first car all on my own.

It has been nearly 3 years since that day.  I have been able to make my payments, though there was a time when things got rough and I fell behind.  I worked hard to get myself out of that situation and haven’t been late since.  About 6 months ago I refinanced my car at a credit union for almost half the interest of the original loan.  I kept the same payment so that I would be able to pay it off sooner.  It was a relief knowing that I would be getting out of debt sooner and wouldn’t be paying out as much money in interest charges.

I have been working towards eliminating debt from my life and finally managed to pay off my last credit card in late February.  Having the credit card debt paid off will allow me to focus my finances towards other goals such as paying off my car loan.  Before beginning the journey towards eliminating my car loan, there are some other factors which must be considered.  Tomorrow I will take a closer look at what these are.