Buying your first car is a major step. As a first-time car buyer, choosing your very own car for the very first time is a big decision, and it can be just as daunting as it is exciting. After all, a car is one of the biggest purchases most people make in their entire lifetime—for most people, it’s second only to buying a house.
Buying a car for the very first time doesn’t have to be stressful, though—as long as you go about it the right, smart way. If you’re in the market for your very first car, check out these 5 tips for first-time car buyers before you make your purchase.
Create a Smart Budget
The first step to making any big purchase-including buying a car—is creating a budget for yourself. When creating a budget for buying a car, keep in mind that you should put at least a 20% down payment on any car you buy at the time of purchase to avoid defaulting on your car loan in the future.
It’s okay to finance your car. In fact, very few first-time car buyers—and car buyers in general—are able to pay the full price of their car upfront. However, you should ensure that your car payments plus any expenses that come with owning a car—such as the cost of gas, registration, and car insurance payments—will not be higher than 20% of your monthly income.
Buying a car for the first time is very exciting, and it can be tempting to want to buy the prettiest or the most high-tech car that fits into your budget. While there’s nothing wrong with creating a list of features you can’t live without in your new car, prioritizing practicality is key to purchasing a car that will serve you well for many years.
If you commute daily to work or school, check out a hybrid or all-electric vehicles that offer unbeatable gas mileage. If you often carry cargo or several passengers with you when you drive, go with an SUV rather than a cute and tiny sedan model. In the long run, you’ll thank yourself for prioritizing practicality over flashy features when you buy your first car.
For first-time car buyers, choosing a used car instead of a brand-new model can save you a ton of money and help you avoid losing money through the steep value depreciation that is inevitable with new cars. When it comes to cars, more drivers than ever are choosing to buy used rather than new—and for good reason.
If you do decide to buy a used car, avoid private sellers at all costs and opt for a used model from an official auto dealership instead. Official auto dealerships provide full vehicle history reports on the used cars they sell and often offer special warranties on their used models that guarantee their safe, drivable condition before you buy—whereas with a private seller, nothing is guaranteed and you’re on your own once you make your purchase.
Keep Your Eye Out for Deals
Many auto dealerships offer special deals on the vehicle models they sell. Taking advantage of these deals can save you hundreds or even thousands of dollars on your car purchase.
Before you buy your first car, do some research on the auto dealerships in your area and take note of any special deals they are currently offering. If no auto dealerships in your area are advertising any special deals, it doesn’t hurt to ask. Many car salesmen will offer you special deals and more flexible financing options if you are forthcoming and ask about your options upfront.
Get a Cosigner
Many first-time car buyers are young and have somewhat low credit scores simply because they haven’t yet had the opportunity to establish good credit over time. If you use your own credit to finance your car, you might end up with a high-interest rate and get stuck with a car loan that is difficult for you to pay off.
It is often a smart idea for first-time car buyers to get a co-signer—someone more experienced with a better credit score that co-signs your car purchase for you. Your car will still be yours and it will be in your name. Having a willing co-signer just helps you secure more flexible financing options and better auto loans with lower interest rates—which can help you pay off your car more quickly and easily.
Buying a car for the first time doesn’t have to be so stressful. These 5 tips for first-time car buyers are designed to help guide your first car-buying process to help ensure that you end up with the car of your dreams on your very first try. Contact us if you have any questions. We’d love to help!