Buying your first car is a thrilling experience! On one hand, it’s a milestone that declares maturity and status. On the other, car ownership is a big responsibility, and the process can seem daunting. If you’re in the market, here are some foolproof tips on how to buy your first car.
Set a realistic budget
You don’t have to spend a fortune to own a good car. Knowing what you can afford is the first thing you need to explore when learning how to buy your first car. It will help you avoid surprises later in the process and keep your finances in check. Use Cobalt Credit Union’s free, online calculators, including the “How much car can I afford calculator”, to help estimate what you can afford and what your monthly payments will be.
Also, understanding your credit history before initiating the sales process will clarify your financial standing. Check your credit report for free to get an idea of where you stand. Then download our free e-book, The Building Blocks of Credit, for an in-depth explanation of credit.
Understand ownership costs
To grasp the real cost of car ownership, you need to factor in expenses like:
Car ownership comes with ongoing expenses that can throw a wrench in your finances if you’re not careful. Factor these expenses into your budget (our worksheet can help) to see how a car fits into your financial plan.
Focus on needs, not wants
With so many car options available, it’s easy to lose focus of what makes financial sense. Assess your driving habits, lifestyle, and budget and narrow it down from there. Buy only what you need, no more and no less.
Do your research
Whether you buy from a dealership or through a private sale, don’t leave it to the seller to educate you on the car. Before you start perusing car lots do your own research on key purchasing factors like gas mileage and reliability.
Information gathering is easier than you might think. Trade magazines, newspaper reviews, manufacturers’ and dealerships’ websites, and social media sites are easy ways to start looking, reviewing, and pinpointing your likes and dislikes. You’ll discover things about the process and about yourself. There’s a lot of information available, which means you can be well-armed when you do stop in at the lot. Once you get started, always test-drive vehicles of interest to assess:
- Whether everything works: test windows, radio, doors, wipers, etc.
- How the vehicle handles and whether it seems to be running as it should
- Interior and exterior conditions
- Comfort level, including seating and legroom
- How well it meets any specific needs, like extra cargo space
If you’re not confident in your assessing abilities, ask someone you trust to come along.
Making a final decision
With so many choices available, you’re in the driver’s seat. Keep these tips in mind once you’ve narrowed it down to a few models:
- Assess the car’s value through a third party.
- Shop around to do some comparisons.
- Don’t buy a car on your first visit. Take some time to think about your purchase.
A lot of checks and balances go into buying a first car, so make time to cover all the basics to secure the right car for you.
To prep for your own financial first steps, download our free Financial Basics Made Easy e-book today!