You have your driver’s license, and now it’s time to think about buying your first car. Maybe you’ve been saving for a few years or planning on taking out a loan.
Getting your first car can seem intimidating, but we’ve got a few tips on minimizing the stress and making it more enjoyable.
Set Your Budget
First and foremost, you want to make sure you know how much you can comfortably afford. If your budget is $5,000, you want to look at vehicles at or below your maximum amount. When you set a price range you can afford, it makes your goal much more reachable.
When thinking about your budget, keep these things at the front of your mind:
- Are you able to afford the full cost upfront? If you can, you may be able to negotiate a final lower price.
- If you cannot afford to pay the full cost upfront, put as much down payment as you can so you can have a lower monthly payment.
- You will most likely need a parent to co-sign if you plan on taking out a loan. First-time buyers often don’t have the length of credit history or employment to qualify on their own, so banks or credit unions will need someone with that stability.
- Don’t forget to plan for gas, maintenance, and insurance.
- You’ll need to add tax, title, and license fees to the total purchase price.
Know Your Alternatives:
After you figure out your budget, you’ll need to think about whether or not you want to purchase a new or used car. There are several pro’s and con’s for each type of car. Here a few pro’s for each.
New Car Pros
- Low maintenance costs
- Efficient or high fuel economy
- A manufacturer’s warranty may cover not most repairs
- Latest technology features
New Car Cons:
- High purchase price
- High depreciation rate
Used Car Pros
- The purchase price is less than a new car
- Insurance rates may be lower
- Not limited by choices (there are a lot of excellent used cars out there)
Used Car Cons
- You’ll need to do your research to make sure you don’t end up with a vehicle with underlying problems.
- Initial maintenance may be higher if certain parts are nearing replacement (brakes, etc.)
Whether buying new or use, you have to decide what works best for you and your wallet ultimately! When picking out the right car for you, make sure you do your research.
Do the Homework
Now that you figured out a budget and know your alternatives, it’s time to do some research about the car you want to purchase.
Think about how you are going to use the car and ask yourself:
- Will I be driving to school, work, and other activities?
- How much will I be driving, and how long the distance?
- What special features do I want (blue tooth hook-up, automatic windows, etc.)?
Answering the above questions will help you figure out what body style will fit your needs when buying your first car. If you are the only one who will regularly be in the car, you likely won’t need a giant SUV and could get more bang for your buck with a smaller sedan.
The main goal that should be in the back of your mind is how to minimize your expenses and what car will fit your lifestyle.
After you picked out the perfect car for you, take it for a test drive and get a Carfax report. A Carfax report will tell you if the car has been in an accident and what maintenance has been performed to date. This is especially important when purchasing a used car.
We hope these tips have you feeling less overwhelmed when buying your first car!
Not sure how to create a budget? That’s easy; click here.
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