Brandview / 

Need a new car? Tips to make sure your car loan works for you

Need a new car? Tips to make sure your car loan works for you


Estimated read time: 4-5 minutes

Buying a new car may be one of the biggest purchases you will ever make, especially in today's market.

Sean Tucker writing for Kelley Blue Book reports that as of March 2022, the average price of a new car is hovering just over $46,000, which means that many buyers will likely be financing through a credit union like Chartway Credit Union.

Regardless of whether you're buying new or used, there are different kinds of car loans available. Determining which one is best for you is important, as you'll likely be paying off that loan for a few years.

Here's what you need to know about car loans to make sure your loan works for you.

Your down payment matters

Say you've been saving up for a car, and you have a few thousand tucked away in the bank. You decide to pull the trigger and buy a new car—the one you've been thinking about for months! Being the financially savvy person you are, you use a loan calculator to determine what your monthly payment will be.

You should also factor in that down payment money. The more you put down, the lower your monthly payment will be, especially if you decide to pay back the loan over a longer period of time.

NerdWallet says you should aim for 20% of your car's total cost for a down payment if you're buying new. They recommend 10% for a used car.

How your interest rate is calculated

According to Credit Karma, there are two different kinds of interest rates for a car loan: simple and pre-computed.

A simple auto loan's interest will change each month, depending on how much you owe on the day your payment is due. Credit Karma says part of your monthly payment will go toward the principal balance, and part will go to the interest balance.

A pre-computed interest loan is determined by how much you're borrowing. "That amount is added to the principal and divided by the number of months in the loan term to determine your monthly payment," Credit Karma says.

With a pre-computed loan, you're not going to save money by paying off your loan balance early, as your interest rate will stay the same.

Allison Martin writing for NextAdvisor says your credit score will influence your interest rate. The higher your credit score, the lower your interest rate. Your down payment will also influence your interest rate. NerdWallet says you can expect a lower interest rate the more money you put down.

Need a new car? Tips to make sure your car loan works for you
Photo: Prostock-studio/

Where to get your loan

You'll want to choose a lender with the proper credentials and a history of integrity and experience. Chartway Credit Union has both of those qualifications, in addition to their car loan perks.

For example, they can have you pre-approved in minutes for your car loan, which is important in today's car market. If you need help knowing what you'll need for a pre-approval, you can download their application checklist here.

You'll need to prepare a copy of your driver's license, income documentation, insurance policy information, and more if you're wanting to get a check-in-hand as soon as possible.

Buying a car is a big deal, and sometimes it's best to have a little breathing room from the time you sign the paperwork to when you start making payments. Chartway Credit Union understands this and will allow you to take up to 60 days before making your first payment.

Know your car's price upfront

It's easy to love driving a new car, but few are in love with the sales process that got them behind the wheel of their new ride. Well, when you work with Chartway Credit Union, you don't need to worry about the haggling and bargaining — you leave that to the experts, or, at least the algorithm.

They can help you get discounted, upfront pricing before you even step foot in the dealership. This pre-arranged pricing process at Chartway Credit Union helped save new car buyers an average of $1,824 off MSRP in 2021.

No matter what vehicle you're on the market for, the car buying experience should be exciting and stress-free. That's why Chartway is the perfect credit union to help you every step of the way.

See how Chartway's auto loans are the best for you on their website today.

Related topics

Chartway Credit Union


    Catch up on the top news and features from, sent weekly.
    By subscribing, you acknowledge and agree to's Terms of Use and Privacy Policy.

    KSL Weather Forecast