Many factors go into buying your first vehicle. While this is an incredibly exciting venture, it’s also challenging to find a car that works for all your needs and within your budget too. So, if you’re in the market for your first car, then make sure to think before you buy. As you consider your options, keep these five tips in mind to help direct
1. Your Budget
The first thing to consider before looking at cars is to make sure to determine a budget. When budgeting, always be sure to stay within your financial means so that you don’t experience excessive stress. Determine exactly how much money is reasonable to send to a car payment each month. Then, look for cars within these means. By following this budget, you set boundaries that will protect your mental health from financial worries all while having a nice vehicle.
2. Used vs. New
When it comes to following a budget, there’s one simple and smart car buying solution out there. That solution is to opt for a used car over a new car. There are numerous reasons why you should choose a used car over a brand-new one. Check out these critical tips for buying a used car to fully weigh out if a used car is a good deal for you. One tip is to remember to stick to your original plan. Go in with a price in mind, and don’t be swayed by the car salesman at the dealership.
If you’re looking for more reasons to choose a used car, then an obvious reason is that the vehicle will cost less. Another consideration is that, as a buyer, you can get the same car you love in an older model for this cheaper rate. Your first car won’t depreciate as quickly either. Let’s face it, if you love a specific brand and model vehicle, a new design or model comes out every year. By opting for last year’s model with a bit more mileage, you might be able to save some big bucks while still sporting the car of your dreams.
3. Insurance Costs
Insurance costs are affected by many different factors. It should be noted that car insurance is a necessity for all drivers. As a future policyholder, you need to compare car insurance costs between different insurance companies. This way, by comparing different car insurance quotes and insurance policies, you’ll be able to find the one that’s the best for your needs and budget. As a general rule of thumb, key factors like your age, driving record, credit score, car loan amount, and vehicle type all alter the cost of your insurance. At the end of the day, it’s always a good idea to sit down and compare auto insurers to ensure you’re getting the best rates for your newly insured vehicle.
4. Loan Rates
Most first-time car owners can’t afford to pay all cash for their vehicle. This is why most buyers become applicants for a car loan. However, much like car insurance, auto loans differ between lenders too. Plus, these loans are also dependent on the applicant’s financial history. Specific components that contribute to the cost of your car loan’s monthly payment include your credit history, credit score, down payment, loan term, and overall loan amount.
In fact, the average auto loan interest rate is around 5.61%, but many have interest rates above this marker. To get a lower interest rate from your lender that will save you tons of money in the long run, you must make sure to have an excellent credit score, a decent down payment on your vehicle, and a fairly good credit report. Without these factors on your side, you’ll likely be paying a higher interest rate, which adds up over your loan term.
5. Your Needs
You’ll surely get peace of mind when you consider all of these factors like budgeting, opting for a used car, comparing auto insurance policies, and ensuring you get a good loan rate. In combination with these ideas, remember to think about what you need from your first car.
For example, consider if you need a larger vehicle like a truck or SUV for winter weather or lots of kids. On the other hand, maybe your car is just a tool to get you where you need to go within your town. By thinking about what you need from your new vehicle, you’re able to pinpoint what sort of cars to look for when you’re finally at the dealership. Once you make your decision, you’ll rest easy knowing that you made smart decisions for your new ride.