Buying a car for the first time is exciting. Whether you’re a college grad, a high school student, a father raising a family or a professional, the first car purchase experience is thrilling. However, it might just turn disappointing if you’re not careful with your decisions—both small and great. Here are ten simple things you need to do as a first-time car buyer. Take these to heart.
Figure the real figure.
Be realistic when you do the budget. The best way to purchase a car is through cash. But in most cases, especially in the case of first-time car buyers like you, the most viable way is to take out a loan. In that case, you would need to set aside enough money for the monthly payment.
How do you know how much you can afford every month? Total all your expenses like food, health allowance and leisure then subtract the sum from your monthly net income. The remaining amount is your ideal monthly car payment. But don’t forget to figure the ownership costs like gas, repairs, maintenance and car insurance, too.
Estimate the monthly payment.
This is not a reiteration of the previous tip. This is about settling for a car financing deal that you can afford and avoiding one that’s beyond your financial capacity. Know that your monthly car loan payment is affected by the interest rate and the loan term. The idea is to choose a car loan that has the lowest possible rate and keeping the length of the loan short.
Choosing a longer loan term reduces the monthly payment which makes the deal look affordable. But the interest could be higher. On the other hand, the monthly payment in a shorter car loan may be bigger but you will surely end up paying just right for your car.
Weigh your wants against your transportation needs.
This is your first time to buy a car. And if you’re a typical first-time car buyer, you might be enthusiastic for a convertible or a luxury car. But think carefully about it before you shake hands with a dealer. Is buying an expensive and stylish car the best way to go with your needs? Maybe you need a pickup if you have a lot of stuff or an SUV if your family is growing. Prioritize your needs when choosing your first car.
Don’t skip research.
A lot of car buyers are too lazy to shop well for their next car. But opting not to research for your first car is a huge mistake. This is your first time and you probably do not know much about the car purchase experience. So better read a lot about cars, car financing options and dealership experience. It’s a great way to make the best decision and avoid being a victim of unscrupulous entities in the industry.
Be wise in choosing a dealer.
There are a lot of online sources discussing how you should choose a dealer. But to sum it all up, the right dealer is conveniently located near your residence, legitimate and experienced. As much as possible, choose a dealer operating within your city. This will make it easier for you to transact and fix disputes, if any, with the dealer. Always investigate a dealership’s legitimacy. Look them up in BBB or check if they are registered to operate in your city. It’s also good to deal with a reliable and experienced dealer.
Don’t forget the test drive.
Whether you’re buying new or used, a test drive is always necessary in the car-purchase process. Online sources may have already given you enough information about a car you’re looking to buy. But getting behind its wheel and taking it for at least a short, real drive is still different. When the reviews tell you it’s a good car, the test drive might tell you otherwise. It might not be as comfortable or well-performing as it appears in the reviews. Take a test drive before purchasing a car.
Find out the right purchase price.
With helpful online sources like KBB.com, arriving at a purchase price is easy. They give you a good estimate on how much people in your area paid for the car you’re about to buy. However, keep in mind not to mention to the dealer or sales rep what you can afford per month. This gives them the leverage for their markups. Tell them instead a price lower than the advertised price of the car you want to buy.
Know your financing options.
There are more than a couple of ways to finance a car. One is paying with cash which was mentioned earlier. If you can’t afford to make a one-time-big-time payment, you can opt for a car loan or lease. You can end up purchasing the car in the latter.
Arrange financing in advance.
If you have decided to take out a car loan, be sure to work on it before approaching a dealer. Approach your local bank or credit union first before turning to online lenders and dealers. If you’re like most first-time car buyers, you are most probably yet to establish a credit. If this is the case, know that you can still try applying in banks and credit unions. A lot of them today are willing to help people with no credit and even those with bad credit. The idea is to aim for a lender that charges the least interest rate and doing so before walking into a dealership.
One secret to a successful car purchase is taking it slow. Never rush into a deal. Do not be in haste. Otherwise, you could make a huge mistake, putting your money and credit on the line.
With the tips given above, you might be thinking that buying a car seems complicated. It’s not, as long as you keep your guard up by taking pieces of advice like these into heart. You’d realize too that purchasing a car of your own is a rewarding experience.