7 Tips for the First Time Car Buyer
Buying a car is an important financial decision. However, there are many things that you should take into consideration when purchasing a car. Here are seven tips to consider before buying your first set of wheels.
Set An Appropriate Budget
You do not just purchase a car when you sign. You are also purchasing the cost that it takes to maintain the vehicle. Dealerships will not tell you about the extra costs that will fall upon you when you buy the vehicle and will only tell you the cost of the car itself.
This is why it is vital that you set a budget so you know what you can afford and what you cannot.
Understand Your Credit Score
Having good credit is your key to getting approved for loans. If you happen to have a credit card, you may be able to get your credit score free of charge. If you have bad credit, the cost of car ownership increases.
Ensure that your credit score will be desirable to lenders. It will save you a lot of hassle later on.
Get The Data
A prepared customer is a scary thing for dealerships. If you are looking at new cars, you should ask multiple dealers to quote you prices to see what you can afford. If you are looking at cars that are new, you should ask for a Carfax report.
This will give you a detailed report on your vehicle’s history, including any accidents it may have been involved in.
Make A Down Payment
Making a down payment is not a requirement, but it is usually a good rule of thumb. You can use online loan calculators to see how a down payment can potentially affect your monthly loan payments.
Test Drive It
Once you have been able to identify a few cars that look good on paper and pass the eye test, request to take it out for a test spin. See how you feel in it and use your judgment to see how it performs.
It may also be wise for you to test drive all the cars you consider on the same day so that you can compare them easily.
Apply For A Loan
Shopping for car loans seems counterintuitive. However, it is useful because it can give you an idea of what you can borrow and what your interest rate would be.
This means that you will not need to make financing decisions on the fly. It’s wise to start at your bank and get quotes from other lenders.
Ask If You Need It
A car is nice to have, but a car is considered a luxury. If you can get to where you need to go by foot, train or any other form of public transportation, you could be saving thousands of dollars a year. Take an honest look at your finances and determine if a car is needed.