Here’s How Much an Auto Loan Will Cost Retirees for a New or Used Car in Colorado
By Virginia Anderson,
20 hours ago
Tapanakorn Katvong / iStock.com
Are you a Colorado retiree in need of a new set of wheels? You might wonder what the cost of a monthly auto loan looks like in your state. GOBankingRates recently performed an in-depth study of auto loan costs in Colorado for used and new vehicles, including SUVs, trucks, electric cars and sedans, assuming a 20% down payment and five-year auto loan.
The findings show that used cars offer substantially lower monthly payments but have higher interest rates. Newer vehicles come with lower interest rates, but their higher price points mean a larger monthly payment. Here is the average loan rate, overall cost and monthly payment for new and used vehicles in Colorado.
You may have limited resources to buy a new vehicle in retirement. These tips may help you obtain a car within your budget.
Decide How Much You Can Afford for a Vehicle
What does your monthly budget look like? Take a hard look at your finances and decide how much you can allocate to a new automobile. A good rule of thumb is to keep payments below 15% of your monthly income.
Check Your Credit Score
People with good credit qualify for the cheapest auto loans. If your credit score is low, determine what factors are bringing your score down and work on fixing them. Consider disputing any inaccurate information with the credit bureaus.
If the information is correct but your score is too low, you can take steps to improve it. For instance, you might pay down your debt if your credit utilization is high.
Look to Your Bank or Credit Union for a Preapproved Auto Loan
You might consider auto financing options with your bank or credit union if you have a healthy relationship with it. Plenty of banks and credit unions offer competitive interest rates on auto loans, and you may find a great deal.
Shopping with a preapproved loan incentivizes dealers to offer better financing. The dealer also may provide a better interest rate. If cheaper financing isn’t possible, they won’t waste time showing you vehicles outside your budget.
Be Careful With Add-Ons
Some car dealers may try to add extras that increase the cost of your loan. Be wary of extended warranties and maintenance contracts that dealers promote. It may unnecessarily increase the total of your loan.
Consider Putting More Money Down for the Car
If you have the funds available, consider making a larger down payment on the vehicle. Paying more upfront will lower your monthly payment and the amount you’ll pay in interest for the car. If your down payment is large enough, you may be able to shorten the term of your loan — say from five years to four.
Methodology: For this study, GOBankingRates analyzed each U.S. State to find the average auto loan rates. Using Edmunds’ APR Car Loan Rates from August 2024, the auto loan rates were found for SUVs, trucks, electric cars, sedans and state averages for used and new cars for each state. The average total cost for an auto loan can be calculated using the average used car and new car price sourced from Kelly Blue Book, assuming a 20% down payment and using five years for the loan term. The monthly and total auto loan costs can both be calculated for all the states and car types. Using these filters, the total cost for an auto loan can be calculated for each state and different car types. All data was collected on and is up to date as of Sept. 5, 2024.
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