Buying your first car is exciting—but navigating your first auto loan can feel overwhelming. The good news? Once you understand the process and what our CTC loan officers look for, getting approved (and getting a good deal) becomes much easier.
1. Know Your Credit Score
Your credit score plays a big role in your auto loan approval. But we understand that when you’re buying your first car, you may not have a credit score yet. Which is no problem! Having no score is much better than having a low score and we have ways of working with a zero-score credit report.
If you have another person who can qualify with you, they can co-sign the loan. Don’t have a co-signer available? Then we just need proof of two bills paid on time for at least 12 months. Some ideas on what this can include are:
- Cell Phone bill
- Rent
- Utilities
- Auto Insurance
Tip: Check your credit report for free at AnnualCreditReport.com and dispute any errors before applying.
2. Set a Realistic Budget
Lenders will look at your debt-to-income ratio (DTI) to see if you can afford a new loan.
A good rule of thumb: Your total car costs (loan, insurance, gas, maintenance) shouldn’t exceed 15–20% of your monthly take-home pay.
Contact a CTC loan officer to receive an estimate on your monthly payment based on:
- Purchase price
- Down payment
- Interest rate
- Loan term (36–72 months)
3. Get Preapproved Before You Shop
Before visiting the dealership, get preapproved through the bank.
Preapproval gives you:
- A clear idea of what you can afford
- Stronger bargaining power
- Protection from high dealer markups
Once you have your preapproval, you can focus on negotiating the car price—not the financing.
4. Save For Your Sales Tax
When purchasing a vehicle, you’ll have to register your vehicle with the DMV within 30 days to avoid penalty. Registering your vehicle also comes with sales tax. The sales tax that you’ll pay will be calculated off a few variables, like:
- Net purchase price of the car
- State sales tax rate
- Local sales tax rate
- Exemptions/Special rules
Make sure when purchasing a vehicle that you have plenty saved to cover the sales tax and registration fee.
7. Make On-Time Payments
Once your loan begins, your payment history becomes a major factor in your credit score.
Set up autopay to avoid missing a payment and build your credit for the future. Autopay will also save you interest by lowering your interest rate.
Final Thoughts
Getting your first auto loan is a big financial step—but with preparation, smart decisions, and a CTC loan officer walking you through it, you can drive away with confidence. Focus on your budget and stay on top of payments to make this first loan a positive start to your credit journey.