Buying a car is a huge investment (some would argue the worst) and requires a process that should be carefully thought out and planned. The last thing you want to do is jump into vehicle ownership completely unprepared.
Before buying your first car, you should always consider your budget, whether you want new or used and how you are going to research and choose the perfect vehicle.
Here are some tips to help you with your first car purchase experience:
The first thing you should do when gearing up to buy your first car is to work out a budget. This doesn’t have to be a complicated endeavor – simply calculate your income, your fixed expenses (the expenses that don’t change month to month) and track your variable expenses (the stuff you spend money on).
Compare your income to how much money you pay out each month. See if there is any variable spending you can cut down on, such as eating out or going to the movies. This is where you are going to find the extra money to afford a new vehicle.
Don’t forget that when you purchase a vehicle, you are looking not only at the cost of the vehicle (or loan payments) but also monthly insurance payments and the cost of gas.
New Versus Used Vehicles
When it comes to choosing a vehicle, you have the choice of buying brand new or buying used. Both have their perks and their downfalls.
Buying a new car means more money upfront – a basic 4-door car can cost around $35 000 – and the vehicle depreciates as soon as you drive it off the lot.
However, newer cars require less maintenance and repairs (aside from regular upkeep such as oil changes) and are backed with warranties, which cover most major repairs. The rising cost of vehicle maintenance is something you will certainly want to consider.
You may also be eligible for a better interest rate on a loan through the dealership. Most dealerships have access to special rates when it comes to financing a vehicle.
Yet, there are benefits to buying a used vehicle. The upfront car is far, far less than that of a new car – making it much easier to save the money and pay cash in order to avoid a loan altogether. You can purchase a reliable used car for around $2500.
But when it comes to maintenance, you are likely looking at higher costs and there may not be any valid warranties on the vehicle (although some used car lots will warranty their vehicles).
Before you purchase a vehicle, you need to know what you are looking for. Your first stop should be an online search of different types of vehicles in order to get an idea of what will suit your needs and your budget.
Once you have narrowed down your search a few potential vehicles, go out and visit some dealerships. Make sure you stop in to more than one and that you test drive the cars. A good rules of thumb is to visit no less than 3 dealerships and to test drive potential purchases at least twice.
When you do discuss vehicles with the dealership, be sure to investigate the warranties they offer and extra deals they can swing when you make a purchase from them (such as free winter tires, etc.).