Buying a new or used vehicle in 2024? Here’s the smart way to finance it.

The 2025 models have arrived at local dealers. Whether you are checking out the newest designs, 2024 closeouts or a used vehicle, how you finance your purchase is equally important as what you pay. These tips will make you a smarter borrower and save you money.

Get a head start by shopping around and comparing offers from various lenders. Credit unions like Tropical Financial have long been known for having the lowest rates and better terms than other financing sources. Before visiting a showroom or car lot, find out how much car you can afford. Here’s what to ask an auto loan officer:

• For what interest rate can I qualify?

The answer will depend on your credit score and financial situation. The higher your score, the lower your rate. The loan officer should calculate your maximum monthly payment based on your current debts, such as a mortgage and credit card balances.

• What loan terms do you offer?

They can range from 24 months to 7 years, depending on whether the vehicle is new or used. As explained below, the longer the term, the higher the rate and total interest paid.

• What fees are associated with the loan?

There are no fees associated with the loan, but you are responsible for paying or adding the document stamp tax required by the State of Florida. The tax rate is $. 35 per $100 and is based on the amount of the loan.

• Which vehicles will you finance?

Many lenders have age and mileage limits on used vehicles. In general, the older the car, the shorter the term. You may see different criteria for electric, hybrid and gas vehicles.

With this information, are you ready to walk dealerships for the vehicle that meets your needs? Not just yet. Let’s look at the ways you can save on financing.

• Make a Larger Down Payment. The more cash you put down, the less money you will have to borrow. The less you borrow, the lower your monthly payments and total interest paid over the life of the loan will be. Income from a side job or a paid project for several months could pay long-term dividends.
• Boost Your Credit Score. Be wary of online offers to zoom your score into a higher bracket. Some operators use unethical practices and make unreasonable promises to help. Instead, pay down existing debts and correct errors on your credit report. Ensure your report has been updated with that information before you talk to a lender.
• Choose a Shorter Loan Term. Switching to 48 months from 72 months can result in huge interest savings. Let’s assume you borrow $25,000 at the national average rates Bankrate reported in October. On a 48-month loan at 3.87%, the total interest paid is approximately $2,024.96. On a 72-month loan at 6.86%, it’s approximately $5,567.60. The shorter term will cut your interest costs by more than half, saving you approximately $3542.64
• Select a Shorter Loan Term for Used Cars, too. If you borrow $15,000 for 48 months at 12.05%, you’ll pay approximately $3978.24 in interest. On a 72-month loan at 12.05%, that figure rises to approximately $6142.08. The shorter term saves you approximately $2,163.84.

Borrow against your home. Investigate whether the rate on a home equity loan or line of credit is lower than those on the vehicle loans you shopped. The better deal comes with risks:

• If you default on the home, the lender could foreclose on your home.
• If the home loan term is longer than the car loan's, you may pay more interest over time.
• You're financing an item that depreciates the moment you drive it off the lot. The resale or trade-in amount will not be enough to pay off the loan.

Tropical Financial Credit Union is making car buying easy at its onsite sale of new and used vehicles Oct. 19-20 at its Miramar branch, 3050 Corporate Way. Members can receive special pricing, a quarter-point discount on all loans, and no payments until 2025.