What to Consider When Buying a Car for Your Teen

teen-driverParents spend years teaching their children the art of how to talk, how to walk, how to tie their shoes, how to ride a bike, and much, much more. As a parent, you’re overjoyed with each momentous milestone that passes. But with each step your child takes toward independence, you become keenly aware that you’re no longer able to protect them at every moment (and also that they’re growing up way too fast)!

The day your child gets their driver’s license and you send them off on their first solo drive, you may be tempted to trail behind from a safe distance just to make sure they arrive at their destination safely. Eventually though, you’ll relinquish control and trust that you’ve raised a responsible young adult who’ll behave accordingly behind the wheel, even in your absence. If you’ve taken that leap and now want to buy your teen a car, here are some things to ease your mind that they’re protected even without you there to hold their hand.

Should I buy a new or a used car? Ultimately, whether you buy new or used will boil down to your personal preference and how much money you’re willing to spend, but both have their advantages.

First Financial has great low Auto Loan rates – and they’re the same whether you plan to purchase a new or used vehicle!  You can view our current rates by clicking here.

A new car’s quality isn’t in question – it hasn’t been in any accidents and has no hidden flaws that a previous owner might’ve tried to disguise. Additionally, manufacturer’s warranties come standard on new vehicles, covering the car for at least three years. And New Jersey has a Lemon Law, which protects consumers if an authorized dealer is unable to repair or service the vehicle after a reasonable number of attempts.

Cars are built to last longer so a bit of mileage on the odometer need not be a deterrent or intimidating factor either. Used cars are a good option if you’re looking for more “bang for your buck.” It may not come equipped with the latest technology or gadgets, but will likely have a lot of the same features as a new car for less money. (The availability of fewer in-car distractions for an inexperienced driver isn’t necessarily a bad thing, either). An added bonus of purchasing a used car is they tend to be less expensive to insure.

What are the best cars for the money? If value is a top priority, U.S. News and World Report publishes an annual list of the vehicles it has awarded “Best Cars for the Money.” Judging criteria include the average price paid and five-year total cost of ownership data, expert opinion on the car’s performance, interior features and comfort, and reliability and safety data.

What are the safest cars to drive? Each year, the Insurance Institute for Highway Safety (IIHS) rates vehicles based on how well they protect their occupants in a collision. The vehicles are rated good, acceptable, marginal or poor based on how they perform in five crash tests: moderate overlap front, small overlap front, side, rollover and rear. The highest designation that can be awarded is Top Safety Pick+. These cars deserve extra consideration because, in addition to protecting your precious cargo, insurance companies will often offer discounts for car safety features.

Insurance costs. One thing many people forget to consider when purchasing a car is how much it will cost to insure. Young drivers generally have higher premiums because their inexperience can cause them to be labeled as high risk. Used cars tend to be less expensive to insure so purchasing one is a way to reduce your teen’s insurance premium. Mercury Insurance also offers good student discounts in New Jersey to unmarried high school and college students who maintain a GPA of 3.0 or higher, which can further reduce the insurance premium.

Once you’ve decided which vehicle to buy, emphasize to your teen that driving is a privilege, not a right, and to do it responsibly.

Did you know that as a First Financial member – you may be eligible for a discount on auto insurance through Liberty Mutual? Click here to get started.* We also provide a free auto buying and research tool, AutoSMART — a great place to find new and used vehicles!

Click here to view the article source written by Maryann Gowen, an independent insurance agent serving Wall, NJ.

*Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only. To the extent permitted by law, applicants are individually underwritten; not all applicants may qualify. The descriptions of coverages are necessarily brief and are subject to policy provisions, limitations and exclusions that can only be expressed in the policy itself. Discounts and coverages vary by state and are not available in all states. For a complete explanation of coverages, please consult a sales representative. The TruStage™ Auto Insurance Program is provided and underwritten by leading insurance companies, including Liberty Mutual Insurance Company and affiliates, 175 Berkeley Street, Boston, MA.  A consumer report from a consumer reporting agency and/or motor vehicle report will be obtained on all drivers listed on your policy where state laws and regulations allow. Please consult your policy for specific coverages and limitations. The insurance offered is not a deposit and is not federally insured. This coverage is not sold or guaranteed by your credit union. First Financial Federal Credit Union Client #38361.

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5 Reasons to Shop at a Credit Union for Car Loans

car-loansWhen you’re in the market for a new or used car, you’re probably thinking about financing the vehicle. While dealerships make their own financing programs sound especially attractive, it’s always a good idea to shop around for the best auto loan rates—starting with local credit unions, like First Financial.

Mike Schenck, Senior Economist for The Credit Union National Association, says there are several reasons why you’ll be better off choosing a credit union over a commercial bank. Here are five of them:

1. You have a better chance of having your loan approved. If you have mediocre credit or have had credit problems in the past, a credit union might be “more likely to listen to your story than a commercial bank,” says Schenck. If you’re worried you might get turned down for a car loan because of your credit history, consider approaching a credit union before you talk to a lender at a commercial bank. Even though the loan application process is the same and the underwriting process is similar, the credit union may make some adjustments that a commercial bank would not. Many credit unions are more inclined to listen to its members’ needs and unique situations—sometimes adjusting terms of a loan accordingly.

2. Lower rates. A five-year term is the most common loan term for a new or used car, and rates at a credit union are typically much lower than the average rate at a competitor bank. According to the latest report from the market research firm Informa, the average rate on a new car loan of $30,000 from a commercial bank is 4.16 percent, while the average rate on a new car loan for the same amount from a credit union is 2.82 percent; that’s more than a 1.3 percent difference and equates to a difference of $215 a year, or $1,100 over the life of the loan.

3. Personalized service. Credit unions are not-for-profit organizations and work to provide members with high-quality customer service. Since operations decisions are made by a group of volunteer board members—rather than a group of stockholders—members tend to have a more personable experience at a credit union. You can openly discuss your concerns about your loan, talk about flexible repayment options and review your financial situation with a dedicated professional. This can alleviate some of the pressure of applying and securing financing for your new or used vehicle and you can be more confident that the credit union is working with your best interests in mind.

4. Educational resources readily available. Schenck explains that almost all credit union branches have a dedicated education and resource center, where members can learn more about financing options and how to make the best decisions when assessing the value of their car purchase. If you’re a first-time car buyer and apprehensive about the loan process, you can turn to a credit union for unbiased answers. “The branch can show you how to calculate the real value of your car—not just what the dealership declares as the value of the vehicle— and make a better decision about the deal,” says Schenck.

5. Non-sales approach. Unlike commercial banks, which often grant their lenders bonuses or some type of compensation for the loans they get approved, credit unions work for their members and aren’t driven to sell you anything that equates to extra money in their pocket. All profits from members end up going back to them in the form of better rates on other financial products, such as savings accounts, and more flexible loan options. If you don’t like the pressure of working with lenders from a commercial bank, consider heading to a credit union for a less sales-oriented approach—and potentially rewards in the form of better financial products and services.

First Financial’s goal is to provide the highest level of quality products and personalized services while maintaining financial integrity and stability, thus enriching the quality of our members’ lifestyles. Apply for a new or used auto loan right online – it’s quick, easy and secure! For additional questions, feel free to call us at 732.312.1500, e-mail us at info@firstffcu.com or stop in to see at any one of our branches.

Click here to view the article source.

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