Once you earn your driver’s license, chances are you’ll have your eyes set on purchasing your first car. But there’s a lot more to this than just knowing your dream car’s make and model. You’ll need to know your budget, explore insurance options, and decide whether to buy a new or used car.
The tips below provide a great starting point for feeling ready and confident to purchase your first car.
You’ll want to start out by setting a budget to purchase your first car. To determine this, consider how much you are willing to spend on a car. This cost will vary depending on the make and model and whether you decide to purchase a new or used vehicle.
Once you have this number established, look at your overall monthly expenses. Will you be able to easily put aside money each month to meet your goal? Are there any areas you can cut costs to potentially put additional money aside? It’s crucial to check your finances regularly to evaluate how you are keeping up with your budget.
As budgets are typically developed with a timeframe in mind, consider some of the best times of year to purchase a car. See how you can incorporate these times with your budget, alongside how soon you may need your car.
Once the budget for your car is set, you’ll want to complete thorough research on cars and the current vehicle market. While it may be tempting to aim for the newest or flashiest model, be sure to stick with a vehicle that falls in the sweet spot of your budget.
When researching cars, be on the lookout for a few specific items. If you’re planning on purchasing a used car, look for models that are between 75,000 and 100,000 miles. Consider any commutes you have to school or work, and factor that accordingly with the mileage.
Some other factors to consider include the car’s safety ratings, fuel efficiency, maintenance costs, and any additional features relevant to your needs. For instance, if you’re expecting a child, how does this car function as a family vehicle?
The research may seem like a lot, especially after nailing down your budget. However, if done properly, you’ll save yourself from potential headaches in the future regarding your car.
While researching current cars, one of the first questions you’ll encounter is whether to purchase a new or used car. Used cars are typically less expensive than a new car, but a few other items should factor into your decision before going with a cheaper option.
Even though a used car may be less expensive, you may have to pay more in maintenance and financing. Additionally, you’ll want to have an inspection completed to reveal any potential damage, accident history, or issues overall with the vehicle. On the other hand, used cars may present a better long-term investment given they have already lost some depreciation value. Your insurance cost may also be lower with a used car.
New cars are also not without their challenges and benefits. While a new car may cost more overall, including insurance, it’s guaranteed to never have been in an accident or experienced mechanical issues. That being said, a new car depreciates in value the moment you drive it off the lot. New cars also may cost more, but this could be due to improved safety features or other innovations.
Ultimately, the decision to purchase a new or used car is entirely up to you. So long as you consider your budget and lifestyle and forecast slightly ahead into the future, you will make an informed decision.
When you know the make and model of car you’ll be purchasing, you will want to gather several car insurance quotes to get an idea of your premium and monthly payment. Car insurance rates are determined by several factors, including your driving record, location, the make and model of your car, and your age.
If you’re a new driver, expect to pay a bit more early on in your driving career. This is simply due to your lack of experience with driving. As you become older, more experienced, and maintain a clean driving record, this insurance cost is likely to go down.
Also, don’t settle for the first insurance quote you’re given. Speak to a few different providers to consider all the rates, and which coverage and price will work best for you.
By this point, you should know the car you intend to purchase and how much you’ll need to save. Next, you’ll want to have a car inspection, especially if it’s a used model. An inspection will uncover potential damage or issues you’ll come across if you purchase the car.
If you’re buying a used car, you will want to have a mechanic not affiliated with the dealership or private seller complete the inspection. This way, the mechanic will have no bias when it comes to inspecting the car and will form his/her own opinion.
New cars require inspections also. The dealership itself is responsible for having new cars inspected within a month of being on their lot. The dealership is also responsible for disclosing any issues or unsafe conditions that pertain to the vehicle itself.
While you’ll still want to have an inspection completed, it’s also a good idea to ask for a history of the car, whether it’s new or used. Services like Carfax and TrueCar will provide a comprehensive history of the vehicle, including details like title information, service and repair history, and accidents. With a report and an inspection, you’ll become even more confident in the car purchase you’re making.
No matter your stage in life, a car is always a major purchase. Even with a firm budget in place, it may be difficult to stick to your initial plan amidst other bills and expenses. This is where financing and auto loans can come in.
When you’re ready to buy your car, you’ll either need to pay for it in full, or finance the vehicle with a loan. With an auto loan, you’ll borrow the amount of money needed to purchase your car from a lender and pay back that amount (plus interest) over the length of your loan. Once your car loan is paid off, it’s entirely yours!
Loans can only be offered to individuals 18 years and older. If you’re younger than 18 and hoping to use an auto loan to fund your first car, you’ll need to have a co-signer. Typically, this would be a parent or guardian who will take on the loan responsibility with you.
If you do decide to move forward with an auto loan, consider completing a preapproval. A loan preapproval is an evaluation by a lender of a potential borrower prior to approving a loan. Essentially, it’s an estimation of the risk of approving a borrower for a form of lending, determined by factors such as credit score and financial history.