Right Path Program

Brought to you by

Carolina Foothills Federal Credit Union

Are you ready to buy your first car?

• The First Time Auto Buyer Program is designed for people

with little/no credit or need to start over with their credit.

• Offers low rates & manageable terms.

• Great way to establish credit history.

Membership eligibility

• If you are related to someone who is currently a member or who is eligible to

become a member. Qualified relatives eligible to join are: spouse, mother,

father, sister, brother, child, grandparent, grandchild, and step-relations.

• If you are an employee of one of our Select Employer Groups.

• If you live, work, worship, attend school or volunteer in one of our underserved

areas in Greenville, Spartanburg or Cherokee Counties.

• If you are a member of Speak for Animals Association.

Why a Credit Union?

• A credit union is a financial cooperative that expects you

to: – Use the credit union and credit wisely (save & borrow only what

you need)

– Continually educate yourself and others about the wise use of

credit

– Pay loans back and on time to the credit union

– Volunteer for the credit union if you are able

– Attend the Annual Meeting to stay up to date on credit union

matters

Costs first time buyers need to know

Having/owning an auto is more than just the loan payment.

There are other costs associated with it such as:

• Insurance – Full coverage which includes comprehensive & collision

insurance • Comprehensive: Protects your car against damage not resulting from a collision, as well

as from theft. It covers a wide array of events that can damage your car, including

vandalism, fires, and rockslides on twisting mountain roads.

• Collision: If your car is damaged or destroyed in an accident, collision

insurance coverage will typically pay to fix or replace it. Types of covered

accidents include hitting another car or a stationary object, like a bridge or a

tree.

– Do you need roadside assistance? Could cost more for this.

– Rental vehicle coverage-Insurance that will pay for costs of

renting a car while current car is being repaired.

Costs first time buyers need to know

• Maintenance – Average cost of an oil change every 3,000 miles is about $40

unless you do it yourself

– Mileage/maintenance cost

– Tires- size and name brand influence the amount you pay

– Brakes

– Other maintenance things to think about/how often they should

be done

Costs first time buyers need to know

• Fuel economy – Why is this important? Can you afford to only get 15 miles to the

gallon of gas, or do you need something more economical like 36

mpg?

– What does the window sticker mean? MPG is an AVERAGE –

your driving habits will affect your actual miles per gallon.

– Where else can you get the information? Consumer Reports has

unbiased information.

Costs first time buyers need to know

• Other coverages – GAP Insurance-Guaranteed auto protection, covers the deficiency

balance on a loan when the security is declared a total loss. GAP

coverage is offered to all members when financing an auto at the credit

union at a cost of $299.00, which you can add onto the amount of the

loan. You can feel comfort in knowing your auto loan will be paid off in

the event of a "total loss."

Costs first time buyers need to know

• Other coverages – Vehicle Service Agreement-Contract that can be purchased by a

consumer to cover the costs associated with vehicle repair, including

parts, labor, and/or sales tax, for certain repairs or replacements that

may be required after a manufacturer's warranty expires. Different

contracts have different coverage levels.

– Credit Life & Credit Disability – If you die or become disabled and can’t

work, this insurance coverage will pay if off in the event of your death, or

make your monthly payments while you are disabled and unable to work.

Qualifications and Program Details

• 18+years

• Employed 12 months or more

• Verified annual income of $12,000 or more

• Down payment of 10% of the purchase price of auto

• Debt-to-income ratio of 40% or less

• Checking account at Carolina Foothills with direct

deposit or payroll deduction

• Loan to Value must be 100% or less

Qualifications and Program Details continued

• Maximum loan amount not to exceed 75% of annual

income (ex: $12,000 X .75= $9,000)

• Must utilize ‘savings’ component as part of payment (can

be as little as $5.00 per payment)

• Must pass the First Time Auto Buyer Quiz

• Must meet with Carolina Foothills Financial Guide as

needed

Interest

• Credit Score: – Referred to as your “FICO” (Fair Isaac Corporation).

• A credit score is typically between 500 and 800 (the higher the number, the

better the score).

– A variety of factors go into your credit score: • Whether or not you pay your bills on time

• How many loans are paid off

• How long your loans have been open

• The best way to build credit is to make your payments on time.

What is Interest?

• Cost you pay to borrow money

• The lower the interest rate, the less you pay back

• Determined by several factors, including the government,

economy, the financial institution giving the loan, and

your credit score.

What’s a finance charge?

• How much you will pay in interest and fees over the life of

the loan.

• A car might be priced at $10,000 but if you pay 7% for 60

months the total amount you will have paid back will be

$11,883. Your finance charge would be $11,883 –

$10,000 = $1883.

Collateral

• Describes what property you are offering your financial

institution to secure the loan with, in case you don’t pay

back the money you borrow.

• In this case it will be a car. It can be repossessed if you

don’t make your payments in a timely manner or stop

your direct deposit.

Lienholder

• Lender whose name is on your collateral during the term

of the loan.

• If you take out a car loan from CFFCU, until you pay off

your loan, your car is the collateral and CFFCU is the

lienholder.

Debt Ratio?

• How much money you owe each month compared to how

much income you receive.

• If you owed 3 loans totaling $850 dollars each month,

and your income is $2500 per month, you would take

$850 divided by $2500 to figure out your Debt to Income

ratio. In this case, it would be 34% (the lower the number

the better).

• Most lenders look for 45% or less.

Loan term

• This is how long it will be before your loan is paid off.

• A good range for car loans is anywhere from 36 – 84

months (the majority are 60 months).

• The longer the term, the higher the rate

Pre-approval

• With a pre-approved auto loan, you know how much you’ll

qualify for, before you visit the dealership. Plus, you’ll

eliminate the expense and pressure of dealer financing.

• Take the First Time Auto Buyer Quiz, then you can apply

and get pre-approved today!