6 Essential Tips for Buying Your First Car
Whether you’re a young graduate with a hot-off-the-presses new driver’s license or you’re a parent of a soon-to-be first-time car-owner, buying your first car can be a complex and confusing process.
Car salesmen are literally trained to smooth-talk you into buying the first heap of junk you look twice at on the lot, so make sure to keep your wits about you and arrive at the dealership armed with a plan.
Our fool-proof guide to purchasing your first vehicle will help prepare you for your car-buying journey. Plus it will get you safely and soundly to the desired end goal: your first ever car! Hop in; it’s going to be an exciting ride.
1. Do your research
The internet is a great tool when it comes to researching new or used cars. You can search through lists of cars under the category you’re interested in (perhaps you’d like a hybrid) or you can use an old standby like Kelley Blue Book to find the value of a specific car, make, and model.
You can compare safety and luxury features, as well as other characteristics that are important to you, such as gas mileage on the highway or level of cabin noise.
We recommend printing out or writing down some of the most essential information you find, like the estimated value of a specific car you like, especially if you’re buying used. You can bring this information to the dealership with you. It communicates that you’ve planned, you’re prepared, and you’re not going to be taken advantage of.
2. Separate your needs from your wants
Sure, we all want a Jaguar I-Pace, but as a first-time car owner, is that what you really need? The answer is probably not. And after checking the price tag, your dad says the answer is definitely not.
If you’re buying your first car, keep in mind that cars depreciate very quickly — meaning, it loses value as soon as you drive it off the lot. According to Edmunds, a new car will lose 11% of its cash value once sold and after five years, the resale value is 37% of its initial cost.
Once you’ve prioritized your needs and your wants, it’ll be a lot easier to find cars that match what you’re looking for.
3. Set your budget
This is a particularly important step, especially if you’re financing your own first vehicle. Even if your parents are supplying the down payment, a realistic budget must include things like monthly car payments, car insurance, and the cost of any repairs you have to do, along with annual check-ups, and routine replacement of items like tires or air cabin filters.
Money experts like Experian recommend researching your financing options before you even settle on a car to buy. Why? “Most grads take out an auto loan on their car, with many choosing to use the dealer’s lender. In fact, some don’t even realize you can find your own car loan. That’s a shame, because third-party financing is almost always cheaper.”
Don’t wait until you get to the dealership to navigate the process of securing a lender. Call your bank or local credit union and see if you qualify for a personal loan; interest rates are almost always less than what you’ll be offered at the dealership. And there won’t be any surprises, like forgetting how low your credit score is, right before you’re going to sign the papers to a new (or new-to-you) vehicle.
4. Narrow down your options
Again, utilize the power of technology and use the internet to find at least two dealerships that have the car(s) you want to test drive in stock. Or even shop around to find the best price on the exact car you’re looking for.
Make sure you find at least one or two backup cars in case someone has already purchased the one you like or if, for whatever reason, you don’t like it as much after feeling it out on the road.
5. Take a test drive
The test drive is a highly underutilized tool when choosing your first vehicle. No matter how much outside research you do or how prepared you are, you just aren’t going to know until you step into the car and take it for a spin.
Small details like headroom on the driver’s side, the way you feel sitting in the seat, and your visibility on all sides are enough to make you realize this is not, after all, the car for you.
Try driving similar cars at a similar price point and see if it feel any different. Remember, this is something you’ll own for at least a few years. In the end, those little details really matter.
6. Close the deal
This critical final step involves many moving parts, but after all, this is what you’ve prepared for. Closing the deal involves negotiating for the best price possible (which you — or your parent — should always do), reading the fine print of the contract twice (and then once more), settling the amount that you’re putting down on the car (if you have a down payment), agreeing upon the lender you’ll use, and signing the papers.
It may not have been the fastest, easiest, or most stress-free journey, but you did it, and now you’re here: a first-time car owner. How does it feel? You should feel excited, happy, nervous, and free — all at once. Ride on!