Your Road Starts With CSE
It’s Time to Hit the Road!
Buying your first vehicle is exciting—but it's also one of the biggest early adulthood financial decisions you'll make. Learn how to prepare now so future you can shop with confidence when it's time to hit the road.
Before You Shop
A car is more than just the purchase Price. Understanding what you can comfortably afford now can help you avoid financial stress later.
Scenario 1: The Car of Your Dreams
You found a car you absolutely love. It’s a little more expensive than you planned, but the dealership says they can “make the payment work”.
What do you do?
Buy it because the payment fits within your budget!
Incorrect. Dealerships will often alter terms like the length of the loan to make payments look like they fit your budget. In reality, you’re going to end up paying more money over a longer period of time. Always read and understand the full terms of the loan before signing anything. If something looks off, it probably is!
Review the total loan cost and compare to other vehicles.
Correct! A lower priced vehicle could save you thousands in interest and could leave room in your budget for insurance, gas, and unexpected expenses. In addition, vehicles with shorter payment terms means you will have more financial freedom sooner after you pay it off.
The Real Cost of Owning A Car
The monthly payment is only part of the story. Owning a vehicle comes with ongoing costs you'll want to plan for.
Loan Payment
The amount you pay each month to repay the money you borrowed to buy your vehicle.
The average used vehicle payment in the U.S. is $521/month according to AAA.
Fuel
The money you spend on gasoline to keep your vehicle running.
You can expect to pay anywhere from $100-$180/month depending on how much you drive and your vehicles fuel economy.
Insurance
Coverage that helps pay for damage, accidents, or injuries. Louisiana requires drivers to carry auto insurance.
Auto insurance premiums typically cost $225-$240/month on average for full coverage. Teen drivers can expect significantly higher premiums if they’re on their own policy.
Maintenance
Routine services that keep your vehicle safe and reliable, like oil changes, tire rotations, and brake replacements.
About $100/month is a smart monthly budget to save for routine maintenance and occasional repairs.
Tax, Title, License, and Registration
State fees paid to legally register your vehicle and keep your license plate current. Sales tax is typically paid when you purchase the vehicle.
Louisiana registration Fees vary based on vehicle value, but you can expect to pay anywhere from $60-$180/year.
Depreciation
The decrease in your vehicle's value over time as it ages and gains miles. While it's not a monthly bill, it's a real cost of ownership.
New vehicles typically lose $150–$300+ in value each month during their first few years, depending on the make, model, and age.
Longer loan terms can lead to a much more drastic difference between how much you owe and what the vehicle is actually worth. This is commonly known as being “upside down” on your loan. This means your vehicle would be sold or traded for less than you owe on your loan when you look to move into another vehicle, and you have to pay the difference.
As you can see, there’s more cost to owning a car than meets the eye. View our interactive car loan affordability coach to see how much you can swing on a car purchase.
Pro Tip: Once you have a good idea of your budget, use tools like JD Power to research vehicle values by make, model, style, and more to fit your lifestyle. You can even research what these cars are selling for in your area!
Scenario 2: Built-to-Last or Busted?
Your dream car looks great, but has 190,000 miles under its belt.
What should you do?
Looks fine, so I’ll buy it!
Do your research! Just because it’s fine when you test drive it, doesn’t mean it’s a reliable vehicle that will outlast the length of your loan. Find out what some issues these particular make, model, and year vehicles tend to have at higher mileages. This could save you thousands in repair costs down the road!
Compare long term maintenance and repair cost to lower mileage options.
Correct! Sometimes it’s cheaper to pay for a newer, lower mileage vehicle, even if the monthly payment is higher. Just for fun, lookup what a transmission replacement costs for the vehicle you’re looking at…
This isn’t always the case of course! Some vehicles have a much higher lifetime than others, so do your research before making your decision.
We’re Here to Help When You’re Ready
Our First-Time Auto Loan Program is tailored to assist Members with little to no credit in financing their first vehicle without requiring a cosigner.
Program Benefits:
Lower Interest Rates: Enjoy rates that are more favorable than those typically offered by dealerships.
No Cosigner Needed: Secure your loan independently.
Flexible Terms: Choose from various repayment plans to ensure affordable payments.
Contact a lender for eligibility requirements.
