I need a car. What is the best way to pay for this?

Q. I think I need to buy a new car because mine needs a lot of repairs and I don’t think it will be worth the cost. I know car prices are higher now and with interest rates rising I’m not sure if I should take out a regular car loan or use my home equity line of credit. It has a variable interest rate. What is the best option?

— Future Borrower

A. You are right that buying a car is a difficult time.

Even if you’re able to find a new set of wheels that you like, choosing the best financing option is a challenge when interest rates are rising.

The best way to determine how to go about it is to try to calculate how much the loan will cost you in total, said Marnie Hards, a certified financial planner at Aznar Financial Advisors in Morris Plains.

She looked at NerdWallet.com’s offers, which showed that if you have a credit score of over 780, you might be able to get a car loan with an interest rate as low as 2.4%. For a used car, the rate is closer to 3.7%, she said.

“As your credit rating declines, the interest rate you’re charged on a car loan goes up, making the loan more expensive,” Hards said. “For reference, if your credit score is between 601 and 660, the average rates are 6.7% for new and 10.48% for used. The average car loan interest rate is currently 4.07% for new cars and 8.62% for used cars.”

You didn’t mention the actual interest rate on your home equity line of credit, but the average interest rate on a 20-year HELOC is currently around 6.85%, Hards said. And as you’ve noticed, this interest rate is floating, meaning it will fluctuate as general interest rates change.

If interest rates continue to rise, the interest rate on the HELOC will increase, which will increase your outlay on the loan, she said. If your credit is good and you can get a car loan at a lower interest rate than your home equity line of credit, it’s probably the most cost-effective option for you, Hards said.

“You should be able to secure a fixed rate on the car loan, as opposed to the home equity loan, so you don’t have to worry about the rate changing over the life of the loan,” she said. “Remember that credit unions are often a good place to look for low interest rate car loans if you have access to one.”

Email your questions to [email protected].

Karin Preis Müller writes them Perplexed column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly e-newsletter.

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