Car Loans for New Families

Starting a new family is complicated around every turn. From unexpected hospital visits to future financial plans piling up, it is never easy to understand all of life’s worrisome details. 

Should you compile two cars in one loan? What’s the best van insurance for personal use? What’s a quality interest rate? The questions are endless for new families, and owning a vehicle is as tough as it gets. Cars are not cheap, and the loans used to buy them can be challenging to navigate if you’re unprepared. 

To help you and your family on this journey called life, here’s a guide to everything you need to know about car loans. 

Do Your Research

First things first do your research. Going into a dealership blind will prove to be a big mistake for you and your family. Proceeding with dealer financing can occasionally work out to your advantage, but you’ll need an excellent credit score. 

Doing quality online research will help you understand and evaluate your options. For the most part, doing a few simple google searches can lead you to all the knowledge you need; however, seeking financial advice from a professional can be a viable option for fresh families. 

Before you walk into the dealership, know your credit score by heart. Equifax, TransUnion, and Experian are the three leading credit report companies. These companies determine your FICO score and further establish the rates you receive. Use a website to insert your information and find your average credit score. If it’s high, that means you have the leverage to work with the bank or dealership. If your score is low, you’ll be paying plenty of money in interest. 

Usually, the best option for new families is going to a bank you already do business with. Securing an auto loan from your current bank is simpler and keeps your money organized in one place. 

Whether you choose to go to your bank or stay with the dealer, research as much as possible. Look for the average rate for credit scores like yours, the best vehicles to purchase, how many months is fitting for you, and anything else you deem essential. 

Multiple Cars in One Monthly Payment

Whether you’re a new, blended family or are just finding that one car is not enough, financing two vehicles with one auto loan is a great idea. Of course, it’s a bit more complicated than simply combining the price of two cars. In general, you have two options when it comes to financing multiple vehicles at once. 

First, instead of borrowing an auto loan, you can choose a personal loan. A personal loan gives you the option to spend the money on whatever you wish. This gives you the collateral to walk into the dealership and purchase multiple automobiles, no questions asked. 

Second, have an impressive credit score. If you have a rating between 720 and 850, the bank or dealership will have no issues dealing you an auto loan for multiple vehicles. The higher your score, the more lenders will trust you.  

If you’re worried about purchasing two cars at once, you’re not alone. In fact, it can prove to be for your benefit by combining bills, lowering interest rates, and driving better vehicles. 

What’s a good interest rate?

The average auto loan in the United States is 5.27 percent over the course of 60 months. For individual borrowers, however, the interest rate percentage is based solely on how good your credit score is. The lower your score, the higher your interest rate will be on your auto loan. 

With a 760 or higher credit score, your interest rate could drop as low as three percent. On the opposite end, however, if your credit score is 600 or below, you could be slammed with a 15 percent interest rate. 

When it comes to auto loans for new families, credit score is everything. If your score needs work, consider waiting six months until it improves so you aren’t faced with crippling interest rates that will leave you and your family paying for years to come. 

How many years should your loan be?

Determining how many years you want your loan to be can drastically sway your interest rate. Additionally, it can motivate you to get your car/cars paid off as quickly as possible. Most banks and lenders provide auto loans payment plans from 24 to 72 months. 

The general rule of thumb is the shorter period of time you wish to have the loan; the lower the interest rate will be. Yet most of the time, it isn’t that simple. 

New families may have other costs piling up, such as mortgages, hospital bills, and childcare. A 72-month car loan has the distinct advantage of offering lower monthly payments. On the other hand, it could leave you upside down on your investment, meaning you end up paying far more than anticipated due to the lengthy loan period. 

The best advice is this if you have the money to make a larger monthly payment, choose a shorter loan term. You will save yourself hundreds, even thousands, of dollars in the long run. If your family is living paycheck to paycheck, a long term loan will keep those monthly payments as low as they can go. 

What vehicle models are best for you?

We know that term length, credit score, and interest rates are essential to a new family’s quality car loan. However, the model of the car you choose to buy could also change those rates. 

If your blended family has a new teen driver looking to purchase a vehicle, a flashy sports car may not be in your best interest. For larger families, the latest model SUV is going to cost you a fortune. 

Lenders know your background, driving tendencies, and who the vehicle’s main driver is going to be. Choosing a vehicle model that isn’t brand new, has plenty of safety features, and doesn’t often get sold will help in bringing lower monthly payments and lower interest rates. 

Programs for Low-Income Families

Low-earning families can struggle to make ends meet even without a car loan in the mix. From planning out meals on a budget to ensuring savings on insurance bills, it can be a challenge to scrape up every dollar. Unfortunately, the world we live in nearly requires a vehicle to survive, and it’s never cheap. 

To help low-income families get much-needed transportation, several programs are available to help get car loans for those who need assistance. 

These programs feature extended term loans, lower interest rates through proof of occupation, and other savings advantages. We all need a hand sometimes, which could be your family’s way of getting from place to place.

Knowledge can Make All the Difference

The world is a tough place overrun by money-hungry people. A tough endeavor in the tough world is navigating car loans for new families. Interest rates can be outrageous, vehicles are expensive, and credit scores are tough to improve. 

Low-income programs, credit-boosts, and modest vehicle models can save you on your car loans. While it still won’t be cheap, always remember to do your research on car loans and other factors before walking into the dealership. 

Ethan Lichtenberg writes and researches for He specializes in insurance and automotives. Ethan lives in sunny Tarpon Springs, Florida and can be found writing on the causeway. 

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