More than 23 percent of Ohio consumers are considering purchasing a vehicle this year, and 83 percent are more likely to finance the purchase than pay cash, according to a consumer survey conducted by the Ohio Credit Union League.
When asked what factors respondents considered when vehicle shopping, 67 percent said monthly payment is the biggest influence on their decision. For 61 percent of participants, gas mileage is the most important issue, while 47 percent said consumer reviews are important in their decision-making process. Other aspects considered when shopping for a vehicle included a safety rating, vehicle’s history report, and general aesthetics.
It’s no surprise gas mileage is at the top of consumers’ minds. According to Time Magazine’s Everyday Money, after a slight gas-tax increase (to 31.3 cents per gallon) took effect Jan. 1, the average cost of a gallon of gas in the Buckeye State is $2.03. Up from $1.49 a year ago. The national average for gas sits at $2.29 per gallon, according to AAA. That’s 29 cents more than the national average at this time last year.
In addition to the cost at the pump, here are a few tips when choosing a new vehicle that will have the least effect on your wallet.
• Use your tax refund. The more money you’re able to put down on a car, the smaller the loan and ultimately, the less you pay in interest over the life of the loan.
• Get pre-approved. Before car shopping, get pre-approved. It’s fast, free and online at ProMedica FCU. Pre-approval will give you more power to negotiate on the purchase price of the vehicle. Pre-approval also tells you how much you can afford and what type of monthly payment you will have.
• Budget ahead. As a rule-of-thumb, do not allow a monthly payment for a vehicle to exceed 12 to 16 percent of your gross monthly income.
• Consider the total cost of ownership. When car shopping, consider the cost of insurance and maintenance. Also, keep in mind that a high-end vehicle typically costs more to insure and maintain.
• Check with ProMedica FCU. Rather than purchasing items like a warranty and Guaranteed Asset Protection (GAP) coverage at the dealership, check with a credit union. PFCU offers these items at a lower cost than what you would find at a dealership.
To learn more about how PFCU can help you afford life, stop into one of our four locations or call 419-479-4040.
*Pre-approval based on individual credit worthiness using ProMedica FCU risk based criteria. Pre-approvals are valid for 30 days. Not all applicants will be pre-approved.