Buying a car for the first time can be as scary as it is thrilling and exciting. You’ve probably waited a long time for this moment, saved your money diligently and you want to get the perfect car. Whether you’re buying your own car or are helping your teen driver get his or her own car, there are several factors to keep in mind. Here are seven tips for first-time car buyers.
1. Know What You Can Afford
The first step towards buying your first car is to know what you can afford. Go over your budget to determine what you can afford as far as both down payments and monthly payments. If it’s your first car, you’re better off purchasing a good reliable used car. Consumer Reports states that new vehicles lose about 50 percent of their initial value in the first five years, so buying a used car will not only be cheaper but will also give you more bang for your buck.
2. Know Your Credit
Few things are as stressful as planning to buy a car, picking out a car only to find you can’t get financing because of poor credit scores. Whether your scores are less than desirable due to late payments, lack of credit or an error on your credit report, it’s important to know what your credit scores are like before you attempt to get financing. You can’t fix something if you don’t know it needs fixing.
3. Shop Around
Regardless of how much you love the vehicle you’ve just taken out for a test drive, don’t make any final decisions without shopping around. You may find a car you like better or the same car with a low price tag. Car dealers are very competitive and may be willing to negotiate if they believe you found something similar to what they’re offering only for less money. Don’t be afraid to inform dealers that you are shopping around.
4. Research Financing
If you’re planning to obtain financing for your vehicle, it’s important to shop around at different banks. In fact, it’s as important to shop around for banks as it is to shop around for vehicles. You may be required to have a down payment, but the amount of the down payment may vary from bank to bank. The same can be said for interest rates. You’d be amazed at how much difference just one or two interest points can make in your monthly payments. Online auto loan calculators can be helpful in showing what type of payments you can expect based on different variables.
5. Get Preapproved
Once you’ve researched different lenders, getting preapproved can be really helpful. Why waste your time and the car dealer’s time test driving cars you can’t afford to buy? By being preapproved, you’ll know exactly how much money the bank is willing to borrow you, which allows you and the car dealer to narrow down the search.
6. Check Insurance Rates
A car is not a car at least in terms of car insurance. Car insurance premiums are based on various factors and make, model and year of the car is one of those factors. If you find a few cars that interest you, contact your insurance agent to get an idea of what type of insurance rates you’ll have. Having to pay high insurance premiums can quickly take the fun out of car ownership especially since auto insurance is a legal requirement.
7. Get the Vehicle Inspected
Before you make the final decision on car buying, have the vehicle inspected. You want to know that the vehicle is not just a good buy financially but also that it’s reliable and in good condition. If you don’t know a lot about vehicles, bring someone with you that’s auto savvy. It’s a decision you won’t regret. Knowing that you have someone with you that knows their way around a car can also make the dealer more honest and forthright.
By following the above steps, you’re taking a lot of the stress out of buying your first car and are more assured of getting a good car as well as a good deal.