Young adults increasingly purchasing cars on their own
Understanding car financing and other auto expenses can be daunting for first-time buyers
The latest Rules of the Road Survey by Capital One Auto Finance shows that many young adults are heading out to buy their first car – and not taking parents or their advice along with them.
While this may seem like a good idea to college grads and other young people with the means to buy a car, some don’t understand the intricacies of financing a vehicle purchase and many have not reviewed their own credit reports before seeking loans.
Capital One’s survey revealed that 82 percent of respondents understood that their credit score would impact the interest rate on their car loan, but 72 percent of those seeking financing for the purchase didn’t know what their credit score was.
Before driving off the lot with a new car, consumers are advised to have auto insurance – and based on the survey findings, young adults may not realize that their credit score also plays a role in determining premium rates.
Although credit scores are not the only factor used to determine auto insurance rates, most insurance companies do take them into account and calculate a similar credit-based insurance score to determine the likelihood a plan participant would file a future claim.
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Posted: June 10, 2009
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