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Shopping For Your First Car? Let’s Get Started…

Your first car. It’s a milestone that we all remember and what we all longed for. The dream of our first car often coincides with independence, freedom, responsibility, and our identity. With all of the excitement, sometimes buying your first car can be stressful despite how old you are or what your budget is like. Putting some thought into it before you begin to shop can be extremely helpful and help you avoid buying the wrong car. Here are the steps you can follow to ensure you make a great purchase and a smart financial decision.

Be Honest With Your Needs

  • What type of car payment can you afford?
  • How much mileage do you think you will drive in a year?
  • What type of vehicle do you think you need for your lifestyle?
  • You may want a Toyota or Tesla, but what if your budget is only $5000?
  • Can you afford the maintenance and repairs for the car?
  • What do you need the vehicle for?

Write a list of your needs and wants on paper. Next, start to prioritize the most important items you need. Be honest. Some of your top priorities should be having a monthly car payment that is affordable to your situation, staying within budget, and choosing a vehicle that is reliable.

Research, Research, Research

When assessing your needs and wants in a vehicle, do your research. Learn about different features and options, and how they affect a car’s price. Maybe you want a bigger vehicle but did not realize that it would cost you $100 a week in gas and needs special parking. Perhaps, you are considering a motorcycle but did not get the right license. Or, you really want a sports car but did not realize that your insurance would be much higher than anticipated. Research all of your preferences and compare.

As a Pearl Hawaii Federal Credit Union member, you could save hundreds on Liberty Mutual® Insurance through our TruStage® Auto Insurance Program.  Get a customized online quote or connect with an agent. Also, start researching your next car now with some useful tools. As a starting point, check out our car research tool. From there, you can see approximately the cost for the car you want and afford.  When estimating, consider the vehicle’s sticker price, which is also called the MSRP. If you are interested in buying a used car, estimating the price is a little more complicated.  To get an idea of a fair price, use the online pricing guides and research tools or find the Kelley Blue Book Karpower Retail Value.


What’s Your Credit Score?

Checking your credit gives you a sense of what auto loan interest rates will be. Make sure you know where your credit score stands and what factors are contributing to your score. Maybe you need to work on your credit and possibly remove a few items that can boost your score. Visit and get a free copy of your credit report every 12 months from each credit reporting company. is the official site to get your free annual credit reports. This right is guaranteed by Federal law. You can verify this is the official site by visiting the CFPB’s website.

Additionally, with a lot of first-time car buyers, you may not have bad credit, but you may not have enough credit. With Pearl Hawaii Federal Credit Union’s Credit Create, we will help you establish a credit history and help you with your auto loan.

How Will You Pay For The Car?

Once you decide how much you can afford, create a price range. Either you can obtain a loan or pay for the vehicle in cash. Ideally, if you can make a 20% down payment, that is awesome. Although it is suggested, sometimes it’s not necessary. To consider your options, make a meeting with one of our loan officers. They can help you with the different options that are available to you.

Get Started With A Car Payment Calculator

Overall, calculators are useful tools to assist you with educating yourself before visiting us or walking into a dealership. While you cannot calculate your exact monthly car payment, you can gain a good estimate and help you compare auto loan offers with confidence. Are you considering your next car, but you are not sure what the monthly payment will look like or how much you can afford? Certainly, the best way to estimate what your monthly payment might be is to check your credit and then use a car payment calculator. However, you won’t know exactly what rate and loan amount you qualify for until you apply for a car loan.

These car payments calculators will help you visualize how changes to your interest rate, down payment, trade-in value, and vehicle price affect your loan. Take some time to experiment with different values to find an auto loan setup that works best for your lifestyle and that does not break your budget.

Additionally, information from our car payment calculators is for example purposes. Our interactive calculators are educational tools. We cannot and do not guarantee their accuracy in regard to your individual circumstances. While a calculator can be useful, all examples are hypothetical and are for educational purposes. We encourage you to meet with a Pearl Hawaii Federal Credit Union loan officer for accurate car payment information. Contact our loan staff at 808.737.4328 or email our loan team to get started. Our rates

Monthly Payment

Cost of car
Rate (APR)
Term (Months)

Set a Budget

After you’ve identified your needs you should set a realistic budget that covers insurance, gas, occasional maintenance, and payment if you decide to finance. Make sure to compare the number you come up with to your monthly income so that you can know what percentage of your income will now be for your car. A prudent monthly car expense would be 10% or less of your income. Pearl Hawaii’s loan officers can also assist you with this. Additionally, once you have a realistic budget for your situation and you have a car payment that you are comfortable with, Pearl Hawaii can pre-approve you for a loan so you know your shopping power. Get Pre-Approved for an Auto Loan. 

Car Payment Calculator
Shop for the Right Vehicle

Once you know what you are pre-approved for, visit our car buying guide again and check out the local dealerships and start shopping for your first car. Take your time, look at many cars, and make sure to take it for a test drive. Also, shop around thoroughly and explore your options before committing to a vehicle. Additionally, call to get quotes for auto insurance on each car. Not all cars are insured the same and many factors are attributed to how much you have to pay.

Buy Your Car

You’ve done your research, you know what you want, and you are pre-approved so know what your budget limits. When it’s time to negotiate the deal, read your contract carefully. After you drive off, make sure you never miss a car payment by signing up for automatic bill payment.

‍Some Helpful Car Tips & Terms

New vs. Used

Used cars are less expensive than their new counterparts.


New cars typically offer a manufacturer’s warranty to provide peace of mind against major repairs and breakdowns. Older or used vehicles may not have an existing warranty. Pearl Hawaii also offers Mechanical Repair Coverage.  The older your vehicle, the more it takes to keep it in good working order. Not making small repairs can lead to even more expensive repairs. Mechanical Repair Coverage can help deflect some of those costly covered repairs while keeping your vehicle running extra miles and extra years. With various coverage levels and deductibles to choose from, there’s a plan to fit your budget.


Both new and used cars are susceptible to necessary repairs over time. Generally, older vehicles need more repairs.


A new car loses value the minute it leaves the lot. Purchasing a model that is a few years old may offer substantial savings.

Not All Car Loans Are Created Equal

Predominately, there are two major types of auto loans. With a simple interest loan, your interest is calculated based on your loan balance on the day your car payment is due. The amount of interest you pay each month changes. With a car payment that is made up of precomputed interest, interest is calculated at the start of your loan and based on your total loan amount. Essentially, did you ever have a loan where it feels that the loan amount owed barely budges although you just made a payment? Most likely, you had a precomputed interest loan. Pearl Hawaii only offers simple interest auto loans. For more information, check out the Consumer Financial Protection Bureau (CFPB). CFPB is a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

When preparing to buy a car, keep the following things in mind:

  • If you can afford to pay the full cost upfront, you will save a significant amount on interest and may even be able to negotiate a discount.
  • If you do not have a credit history, let us help. With Pearl Hawaii’s Credit Create, we will help you establish a credit history and help you with your auto loan.
  • Costs such as titling, destination fees, and registering must be paid when you purchase a vehicle.
  • The more you can put down, the lower your monthly payments will be.
  • If you have a hard time understanding anything, ask for clarification. Don’t sign any financial agreement before reading it thoroughly.
  • Don’t forget about the added expenses that come with owning a car, such as gas, maintenance, and insurance
  • When purchasing your vehicle, also do not forget about taxes and fees when considering the total price for your car. Typically, you will have to pay state sales tax, a documentation fee, and registration costs.

Get Help With Calculating Your Next Car Loan: Car Payment Calculators















If you need to borrow money, we can help you. If you’re still not sure whether a loan is a right option for you, call us at 808.73.PHFCU (737.4328) or visit one of our locations on Oahu (Waipio, Waianae, Ewa Beach, Honolulu,  Airport,  and Pearl Harbor). Our team is ready to look at your financial situation and recommend the best option for you. You can also apply online to get started…