Tips for First-Time Car Buyers
Top 5 Tips for First-Time Car Buyers
- Create a Budget and Stick to It.
- Raise Your Credit Score.
- Determine Your Transportation Needs.
- Do Your Research.
Schedule a Test Drive.
1. Create a Budget and Stick to It
If you want to drive home in a car that's affordable for you, you need to create a budget. To do that, you'll need to consider how much you want to pay for your first car. It’s important to remember that this number should include more than just the initial price of the vehicle; it should also include regular automotive expenses, like gas, maintenance, insurance, and potential loan payments.
The best strategy for creating a realistic budget is to follow the 20% Rule, in which you’ll spend 20% of your income on transportation. If you really want to save money, you could also make it 10%. The best thing about working with a percentage is that you can then work in other expenses, like paying off other debt or entertainment.
Once you have a budget outlined, you’ll have a better idea of how much you can spend on your first car. From there, you'll want to choose a vehicle that fits each aspect of your budget to ensure you drive home in the right option.
2. Raise Your Credit Score
Your credit is a big factor when shopping for your first car, especially if you're financing. So, you want to make sure it's at a good number. Typically, good credit scores are about 700 and above depending on the credit bureau. All in all, the higher your score, the more likely you are to be approved for auto loans and receive favorable terms.
If you have low credit or no credit, here are a few tips to help you improve it:
- Pay all credit bills in full and on time.
- Keep balances on credit accounts low.
- Avoid opening too many new credit accounts.
If you need a car right away and you’re still working on your credit, there are still options for you. One of them is getting a cosigner. This is typically a close friend or family member who has good credit. They will vouch for you and accept responsibility for the loan should you be unable to pay it.
3. Determine Your Transportation Needs
What does your daily drive look like? Is it a long ride to work or school? You might want to look into an efficient used sedan or a hybrid. How often are you in charge of the carpool? If you’re always bringing a lot of friends along, maybe an SUV would be better suited to your needs.
It’s important to be realistic at this stage. If you’re planning a move in the near future, you may be leaning towards a truck. If this is a one-time thing, however, remember that renting is always an option. On the other hand, if you’re starting your own landscaping outfit, buying a pickup truck might be the best move to make.
You should also consider all your wants. A reliable car can last for many years, so it’s important to enjoy it every time you get behind the wheel. Is a moonroof or premium sound system at the top of your list? Make sure the vehicle you choose has at least a few items on your wish list.
4. Do Your Research
Whether you're in the market for a new vehicle or an affordable used car, it's always a good idea to do a bit of research before heading to the dealership. That way, you'll have an idea of which type of vehicle is right for you. What’s the best part? This step is easier than ever with lots of great resources online!
When you're doing research for your first car, think about your specific driving style. You’ll need to find the answer to those questions that matter most. Some of the best questions to ask could include:
- What’s this car’s MPG rating?
- How much cargo space is there?
- What trim level options are there?
- How many passengers does this car seat?
If you’re thinking about buying used, examining a CARFAX® Vehicle History Report™ is a very important part of the research process. It will give you more information on service records, reported accidents, and title history, so you can ensure you’re getting an experienced and well-cared-for car.
5. Schedule a Test Drive
When you're buying your first car, you want to make sure the one you choose is truly the best for you. The easiest way to ensure that is to schedule a test drive. A test drive allows you to get behind the wheel, so you can see exactly how it performs and how all the features work.
When you're taking it out for a spin, you'll want to pay close attention to just about everything. How do you feel when you're behind the wheel? Are the seats comfortable? Do you like how the car performs overall? How are the interior and exterior features and technologies working? Make sure you give all the knobs and buttons a try.
Before or after your test drive, there are a few things you’ll want to check on the exterior of the vehicle. Always check the tire treads, using the penny test if you have to. You should also check the exterior panels for rust, scratches, or dings. Finally, make sure every door opens and closes smoothly, and remember to try the trunk, too.