Buying a first car is an exciting time. A car means freedom to work, travel, and shop wherever. A car vastly improves a person’s earning potential and even improves educational opportunities. However, it is not a small decision. There are so many options available, and choosing the right one is confusing, especially to first time buyers.
There is more to consider than what is listed here, but these five tips will make the process easier.
- 1. Grasp the situation about why the car is needed:
s How will the car be used? For example, will the car be the primary transportation between home and work or home and school? If so, calculate how much time it will save vs. what it will cost in gas, payments, and insurance.
s Determine how often the car will be driven. If only occasionally, reconsider and look at car-sharing or car rental instead.
s Is the car needed to impress friends or co-workers? If so, this is a poor reason to purchase a car, reconsider at once.
- 2. Determine whether new or used is most appropriate:
s New cars are ideal for people that have a reliable income and a good credit rating. New car owners do not have to worry about maintenance records and can count on the car to be reliable.
The downside to new cars is that there is no such thing as cheap car insurance. When a vehicle is financed lending institutions require comprehensive and collision coverage, which costs a pretty penny each month, on top of loan payments.
s Used cars are usually a good option for everybody. They are cheaper than new cars and widely available. This challenge is that the buyer does not know if maintenance was kept up, which repairs were done, what quality they are, etc.
Used cars can be financed, much like new cars, but requirements are stringent. Used cars can also be purchased from private parties, which is often a great option because there is no complicated financing involved.
- 3. Determine the budget:
s If opting for financing, calculate the payment that can be afforded. Also acquire quotes from car insurance companies and factor it into the budget.
If buying from a private party, be prepared to pony up a chunk of cash. Most private purchases are on an as-is basis with a one-time payment. Some private parties will enter a financing agreement; it just depends on the buyer and seller.
- 4. Figure out what type of car:
s For first time buyers, this is usually a decision based on emotion or necessity. For example, if the buyer requires a truck to do construction, then he or she will buy a truck. If the buyer just needs transportation, choose a car with high fuel mileage and curb appeal. The buyer with a limited budget will buy the nicest working vehicle he or she can afford.
5. Start combing the car lots and classifieds:
s The best way to understand cars is to see them in person. It is okay if it takes weeks or months to choose. Test drive as many as possible and research makes and models.
After a while, deals and lemons will be obvious. Also, be sure to have a friend or family member who has purchased a car help. They can point out things that the first time buyer misses.