Saving for a vehicle

If you're trying to save a few thousand bucks for a new set of wheels—or a used vehicle that's new to you—it helps to have a strategy in place that keeps you working toward your goal, even if unexpected expenses arise.

How much can you afford to pay each month?

First, calculate a reasonable car payment you can afford each month. Make sure you leave some wiggle room for maintenance, such as new tires and oil changes.

When do you want/need a new car?

It’s incredibly helpful to have a time frame in mind in which you would like to purchase your new ride. This will help you organize and manage your money monthly to prepare for your first car payment along with a down payment.

What vehicle is right for you?

A good place to start is to assess your needs. Ask yourself some questions like:

  • What type of driving do I do every day?
  • Is fuel economy important to me? How long is my commute?
  • Will I be doing any towing?
  • How many passengers do I need to carry?
  • What safety features are vital?

When it comes to picking a vehicle, try to keep an open mind. Car companies are continually competing and innovating, so if you’re not married to a particular brand, you’re likely to find the best deal if you shop based on your goals and priorities rather than on make and model.

Tips for Saving

Tip: Open a separate, dedicated savings account

Now that you’ve figured out your ideal monthly payments and have a loose idea of when you want to buy a car, it’s time to start saving for the down payment. Try to save either a fixed amount or a percentage of each paycheck. To take it a step further, if your employer offers direct deposit, simply tell payroll to send a certain amount to your savings account every paycheck, with the rest sent to checking as usual. In addition, if you have two accounts with Solarity you can set up automatic recurring transfers between accounts. For example, try tucking $25 into your savings from your primary checking every two weeks—it adds up fast!

Tip: Create a budget and slash expenses

It’s an oldie but a goodie. Create an exacting budget and stick to it. Then start eliminating monthly costs that add up. Cut the cable. Cancel the memberships. Eat out less and plan meals and grocery shopping trips—all standard items.

Tip: Stay focused on your goal

Once you start saving, it’s tempting to splurge and blow your money on something other than your new car goal. To stay focused on your goal, try making frugal living part of a new lifestyle change. With your entire mindset flipped, it’ll be easier to shrug off luxuries that may inhibit your saving. For an added incentive, try posting a photo of your future car or inspirational quotes about saving money in places they are certain to catch your eye.

Ready to start saving today?

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Borrowing money for a new set of wheels

You've found your ride—now let's pay for it. But before heading to the dealership, let's review some tips that will save you some time and money.

Car loans are pretty basic, aren't they?

Yep. The amount you borrow is called the loan principal. The certain percentage of the loan that you agree to pay back in addition to the principal is the interest rate.

How do I get a loan for a private-party purchase?

When you’re buying a car through a dealer, the financing is streamlined and often completed at the dealership. However, when you purchase a vehicle from a private seller, you have to do some legwork beforehand so that when it’s time to close the deal, you have the cash in hand. Here are the basics steps to follow when financing a private-party purchase.

  • You may want to begin by using an online loan calculator to get a sense of the terms and payments you’re comfortable with.
  • Apply for financing,or preapproval, before approaching a seller. Secure financing for a loan large enough to cover the maximum price you’re willing to shell out.
  • Due diligence time. Find your potential ride and do more than kick the tires. Check the vehicle’s history online, test drive it, ask questions, and bring your mechanic friend—eventually settling on a price. To help nail down a price, try checking Kelly Blue Book, NADA, and Solarity is not affiliated with institution listed above.
  • Agree to a sale price with the seller. Washington State Department of Licensing has a complete guide on the documents you need here.

How do I get a loan for a dealership purchase?

Save yourself time running around for financing and get it all done right at the dealership. Credit unions typically have relationships with many car dealers that allow you to fill out loan forms directly at the dealership rather than forcing you to race all over town for financing. To learn more about Solarity’s authorized dealerships, visit our Auto Loans page.

Tips for Borrowing

Tip: How does my credit affect my loan?

The interest rate lenders charge is primarily based on your credit score. The better your score, the lower the rates. Start checking your credit well before you begin car shopping to give yourself a chance to improve your score. Lenders prefer borrowers with low balances, a long history of on-time payments, and a mix of credit utilization, (e.g., a loan payment and a couple of revolving accounts, such as credit cards). Keep in mind: your credit score is affected by five factors:

  • Payment History (35% of total score)
  • Amounts Owed (30% of total score)
  • Length of Credit History (15% of total score)
  • New Credit (10% of total score)
  • Types of Credit (10% of total score)

Tip: Investigate Internet pricing

To make shopping for a car easier, most dealerships have an Internet (or Online) Department. This allows you to shop around online and use e-mail for the bulk of the communication about the vehicle purchase—saving you time and haggling at the dealership later.

Ready to take the next step?

Our Vehicle Loans

Protecting your ride

Everyone with two, three, four, or eighteen wheels must protect themselves and others with auto insurance. But how do you shop, save, and balance cheap rate coverage that won't leave you on the side of the road?

What's the perfect balance between deductibles and premiums?

Sure, the minimum coverage allowed by law (or your lender) will save you money on your monthly payments—but also consider what an accident will cost you. Let’s say you have $5,000 in repairs. A $1,000 deductible (on the higher end) means you’ll pay 20 percent of the costs out of pocket. Compare that with a $250 deductible: you’ll only be paying 5 percent of the total costs. Weigh what you can afford to pay for a premium and what an accident would cost you to arrive at a coverage plan that fits your needs.

Tips for Protection

Tip: Combining policies can save you money

It sounds like a commercial, but bundling auto and home policies can save you up to 15 percent—just make sure both policies provide you the right amount of coverage.

Tip: Credit unions offer great insurance deals.

It seems that everyone is willing to sell you car insurance these days. Although there are a few deals out there when you start bundling policies, it’s easy to get overwhelmed by the sheer number of offers, which makes it hard to know whether you’re getting a good value. Why not explore credit unions for auto insurance? Credit unions offer great deals on insurance products because these institutions can purchase competitive plans as financial cooperatives from national insurance providers that exclusively serve credit unions.

Ready to see what we offer?

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All information on this page is intended to be a helpful resource when researching, but does not constitute financial advice and should not be relied upon as such.