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A Shift In Savings Strategies

July 29, 2020

A woman reviews her finances from her home.Forming New Spending and Saving Habits

COVID-19 has caused shifts in many of the things we do that make up our daily lives. One major shift has been with money management. 

What have you noticed about your spending habits in the past few months? With stores, restaurants, venues, attractions and so many other places closed during lockdown and beyond, the options to spend money outside of our home, other than online shopping, or for essentials, were few and far between. In that time at home, away from our usual daily stops, we were given the opportunity to reflect upon our past spending habits.

We’ve been able to look at that daily cup of coffee we used to get on the way to work, the places we’d go to on our lunch breaks, and meeting friends out on the weekends with a different view. All of a sudden that money wasn’t being spent. It was being, more or less, saved. People are now spending less, saving more, and planning ahead. 

Statistics show that over the past 5 months, including both during quarantine and post quarantine, entertainment, social activities, traveling (even gasoline) and impulse buying are all down. That’s just the tip of the iceberg. According to CUNA Mutual Group’s Trends Report, indicating COVID-19 impacts, personal spending fell 13.6% while savings balances in credit unions rose 4.7% in April. Consumers, it seems, have been sticking to purchasing essentials only- and only when needed.

This shift in spending, along with stimulus checks and relief loans, have helped to ease the financial burden of furlough and layoffs, enabling many of us to get by. Even for those that may have been fortunate enough to continue working in an essential industry, we still see those consumers driving less, eating out less, traveling less, shopping less, etc. This has helped increase the balance of their savings. 

If you have been able to create some pockets of extra funds, now is the perfect time to consider looking at your budget and deciding more strategically on what it is you really need. It is a time to scrutinize your own past habits and channel those funds to what is really important. Use our Budget Calculator to find out your net monthly and yearly income.

Paying owed bills is certainly a great start. Paying off loans is yet another. Once loan payments are more manageable, or possibly gone quicker than you were expecting, you can take the money you were using to make those payments and use it for something else- like building up your savings again. 

If this experience has taught us anything about our spending habits, it’s to consider planning ahead with serious, realistic goals of saving. 

To help you get going on starting a new savings strategy, try a Term Share Certificate or Money Market Account. These are great places to save that can earn higher dividends.

Can you refinance and consolidate your debt? Rates are very low right now on car loansmortgageshome equities and more.

Use this helpful Savings Goal Calculator to find out how long it will take you to reach your savings goal.

If you have questions, we are here to help. 

Should You Buy Used, New, or Lease?

July 23, 2020

Cars in a dealership lot.Pros And Cons To Paying For Your Next Car

Who doesn’t like the excitement of looking for their next car? Before getting behind the wheel, or even looking for that car, knowing the varying factors of purchasing one is helpful to keep in mind, as that can greatly influence your financial position.

When it's time to purchase your next vehicle, there are generally three options: buy used, buy new, or lease. Let's break down the pros and cons for each purchasing method.


Used Cars

Pros: 

  • Used cars are generally less expensive up-front and they have the added benefit of not drastically depreciating when they leave the lot. 

  • Buying a used car, offers a pretty good-sized savings percentage compared to purchasing that same car brand new. Therefore, it may be easier to afford a higher class of car than you normally could have. 

  • Also, car insurance rates and registry renewals are typically lower for used cars. This can save you hundreds of dollars, or more, over the life of the car.

Cons: 

  • While today’s cars are much more efficient and can go longer between scheduled maintenance visits, if you choose to buy used, there are some additional costs to consider. For example, you’ll want to have the car checked out by a trusted mechanic to determine when maintenance work or repairs would be necessary.

  • You may have to pay additional money to have the car certified.

  • Depending on the age of the vehicle, you may possess it for less time, which means spending more on a another vehicle sooner.


New Cars

Pros: 

  • Buying a new car may present you with more financing options from a seller, as well as new-car incentives such as cash rebates and great interest rates. You may also be able to spend less than the first-market price after negotiations, incentives and rebates. 

  • New cars are also likely to provide the latest in tech features for performance, safety and comfort. 

  • A brand new car offers peace of mind without the need to take it to a mechanic before buying. If issues arise, most warranties will cover the cost of repairs for the first few years.

Cons: 

  • New cars are expensive and you may have to put a large amount down up front. They also depreciate as soon as you leave the lot. In some cases, the value of the car drops as much as 20 percent right when you pull away! That means a $25,000 car will lose $5,000 within the first few minutes of ownership.


Leasing A Car

Pros: 

  • When you lease, you don’t pay the full purchase price of the car, rather, you pay the depreciation of the car. This means if you lease a $25,000 car for 3 years, and the anticipated value of the car at the end of the 3 years is $15,000, you only make payments on that $10,000 difference. If you had purchased the car, you would make payments on $25,000.

  • Leasing is also often available with no money down or a much smaller amount than when buying the car outright.

  • A major benefit of leasing is that you get to drive a brand new car every few years. This means the latest in safety and technology.

Cons: 

  • A drawback of leasing, is that the money you're spending isn’t investing in an asset, it’s simply spending money. Like renting instead of buying, you are not purchasing any equity in an asset you can later sell.

  • Other considerations are mileage fees and potential damage to the vehicle. If the car is damaged or you drive it over the mileage limit, you may end up with hefty fees.

  • Leasing often costs more than buying in the long run, as you typically drive a purchased car for longer than 3 years.


Drive Smarter

Between the three options of buying your next car, your best choice will be based on various financial considerations, your driving habits, and your personal preferences of owning a car. Before choosing, visit our Car Loan page to learn how we can help you get on the road with a car you will enjoy. 

If you‘re ready to start the application, click “Apply Now.” If you have more questions, we’re happy to help. Give us a call at 315-735-8571 to discuss your options.

Apply Now


Article adapted from Banzai.

Posted in: Car Loan

Auto Loan Down Payments

June 28, 2019

Know the basics and plan ahead

Consider some of these factors when shopping for a vehicle. First Source Senior Vice President and Director of Member Services Amy DeMetri shares her perspective on the importance of a down payment.



Plan Smarter

Learn more about a down payment on an auto loan and planning ahead by making an appointment to speak to one of our representatives.

Fill out my online form.

5 Steps to Getting a Car Loan

October 6, 2017

Young women look in the window of a new car after applying for an Auto Loan.
An Easy Approach to Financing  

Getting financing for a new vehicle can be fast and relatively easy…when you’re prepared. When you know you want a new (or used) car and need financing, taking a few basic steps can make the process smoother and help you avoid many common problems.

1. Research Your Credit
You may have heard that your credit score matters when applying for a loan. Not only does your credit score and credit standing affect whether you get a loan, it affects what rate your loan will be. The better your score, the lower your loan rate, the less money you spend on interest. There are 3 major credit reporting agencies, and each will let you get a free credit report once a year (each score may vary slightly). Review yours, make sure that all their information is right, and report any problems right away. Check your credit score as well, though this is one of many scores, and it may be slightly different from the one reported to the credit union.*

2. Decide How Much You Can Afford
This isn’t referring to the price of your vehicle per se, but how much you can afford to pay each month without breaking your budget. Make sure your budget includes costs for insurance and vehicle maintenance, which you’ll have to pay for separately. If you’ve never insured a vehicle before, call an insurance agent for estimates, and check online for typical maintenance costs for the vehicle you want. When you have a maximum amount, enter that into our Auto Loan Comparison Calculator on our Auto Loan page to see how your numbers work out. Don’t have a budget yet? It’s a great idea to put one together. If you’re not sure where to start, ask us for help!

The Loan Calculator will ask you to enter the loan term: how many years/months you have to pay the loan down. While a longer term may mean lower monthly payments, the total amount you pay will generally be more, so find terms that are a good balance of your monthly cost vs. total payments.

3. Apply For Your Car Loan
When you know how much you can afford, make an appointment to sit down with one of our Loan Representatives. They’ll work with you to determine what your credit and financial standing is, the type of loan you’ll need, and the terms that work with your lifestyle and budget. Let us know if you plan to buy new/used from a dealer, or in a private deal. If you qualify, our goal will be to get you pre-approved for your loan, giving you a certain amount of time to shop for a vehicle. Pre-approval gives you extra buying and negotiating power when you’re talking to a dealer. You’ll know the highest price you can go, and you won’t be dependent on the dealer for financing. If you buy an auto for less than your pre-approved loan amount, you’ll simply get a smaller loan (with smaller payments). If you have no credit history, let us know; we can discuss your options, such as asking someone to co-sign your loan.

4. Shop For Your Vehicle
Armed with your pre-approved loan amount, you’ll need to know how much you would consider putting down for a down payment, or any trade-in value on an existing vehicle, either of which will affect the vehicle you can afford.

Be cautious in your price negotiations; when dealers know you have financing already, they may offer you a longer-term loan with lower monthly payments, but that may cost you more over the term of the loan. If you’re looking at used vehicles and we’ve pre-approved you for a used car loan, you may need to limit your shopping to vehicles within a certain age or mileage limit.

5. Let Us Know
Once you’ve made the commitment to purchase your auto and negotiated the final price, the dealer’s financing department will contact us to finalize the sale paperwork. They will almost certainly try to convince you to purchase extras, such as extended warranties, rust-proofing, fabric protection, and more. Research all the options ahead of time so you know what’s recommended and what’s not. If you’re buying in a private deal, let us know so we can finalize the payment.

After the sale is complete, you will begin your payment schedule. We offer a number of options, such as online bill payments, automatic deductions, and ways for you to prepay if you ever decide to pay off the loan faster.

Learn More
Visit our Auto Loan page to learn more about how Auto Loans work, and to set up an appointment with one of our friendly representatives to discuss your needs.

Learn more
*Free credit reports are available under Federal law at AnnualCreditReport.com

 

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