With the prices of new and used SUVs, trucks and cars continuing to rise, it can seem like you’ll never be able to afford one. That’s when a loan can help put you in the driver’s seat.

But not all loans are created equal and some will cost you significantly more over time, even if the payments are lower. The difference in the overall amount you’ll pay on a 4-year loan vs. a 6-year loan can be high, and the longer your loan term the more likely it is that you could owe more on the vehicle than what it is worth, due to depreciation.

If you borrow $30,000 for a 4-year loan at 4% interest, your monthly payment would be $677 and you’d pay a total of $32,514 over the loan term, with $2,514 being interest charges. Over 6 years on that same amount, your monthly payments would only be $469, but you’d owe $3,794 in interest – or an extra $1,280 out of your pocket compared with the 4-year loan.

So, what can you do to save money and still get a reliable ride?

Your first option would be to look for a less-expensive vehicle. That might mean cutting back on some options or looking for a more affordable model from a different maker. It could also mean looking at a used vehicle instead of a new one.

You can also search for the best loan rate possible. There are times a manufacturer might offer a loan option of 0% to less than 1% in order move certain models. Some experts recommend starting with your financial institution and doing comparisons from that. No matter what loan rate you qualify for, the more money you can pay up front as a down payment, the less you’ll have to borrow and then repay. And the shorter the term, the less you’ll pay in interest costs.

If you can, experts recommend checking several dealerships to find the best offer on the vehicle you want, and they suggest looking for models with high reliability ratings and long warranties. The last thing you want to buy is a vehicle that could need costly non-covered repairs before you have paid off your loan. If you choose to go used, consider finding a certified pre-owned vehicle with a warranty.

If the cost of a new car is out of your range, a reliable newer used car can save you money because you won’t get hit with the depreciation associated with a new car. It has been estimated that a new vehicle could depreciate in value by more that 10% in the first month and be worth only around 40% of its original price in as little as five years.

The need of getting from point A to point B is a fact of life but paying too much to do that can be controlled. Take your time to research vehicle reliability, look for the best loan rate, make as much of a down payment as you can afford, and look at the value of a new vs. used vehicle.

Your goal should be a reliable vehicle that won’t bust your budget now - or over time.

Questions?

Fidelity’s Client Care Center Bankers are here to help. For assistance, call 1.800.388.4380. The hours are Monday through Friday, from 8:30 a.m. to 6 p.m. and Saturday from 9 a.m. to 1 p.m. or visit www.bankatfidelity.com.

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Fidelity Bank has built a strong history as a trusted financial advisor and continues its mission of exceeding client expectations through a unique banking experience. It operates 20 full-service offices throughout Lackawanna, Luzerne, Lehigh, and Northampton Counties, along with a limited production commercial office in Luzerne County and a Fidelity Bank Wealth Management Office in Schuylkill County. Fidelity Bank provides a digital banking experience online at www.bankatfidelity.com, through the Fidelity Mobile Banking app, and in the Client Care Center at 1-800-388-4380. Additionally, the Bank offers full-service Wealth Management & Brokerage Services, a Mortgage Center, and an array of personal and business banking products and services.