Buying your first car can be exciting and daunting, fraught with many financial considerations. While the prospect of having a reliable mode of transportation is tempting, there are common mistakes young adults make when purchasing a vehicle that could cost them more than they bargained for.
1. Not Doing Enough Research
Young adults often feel rushed to decide and just go with the first car they find that meets their needs. However, it’s important to research to know what deals are available and have all the facts before purchasing.
Make sure to compare the prices of different models, read reviews from other buyers, and look for any hidden costs associated with the vehicle. Lastly, consider additional costs of maintaining the car, such as gas and insurance. This way, you can make a more informed decision and avoid buying the wrong car.
2. Neglecting to Get a Pre-Purchase Inspection
It may be tempting to skip this step, particularly when buying a used car from a private seller, but having an independent mechanic inspect the vehicle beforehand is important. This will ensure there are no major problems with the car and that it is safe to drive.
Plus, many mechanics offer pre-purchase inspections for a reasonable price. This can save you from buying a lemon of a car and potentially paying thousands in repair costs.
3. Taking on Too Much Debt
When financing a vehicle, it’s important to be mindful of how much debt you take on. The total cost of the car — including interest payments — should not exceed 10% of your gross income; otherwise, you may end up facing an unmanageable payment each month.
It’s also important to note that long loan terms (more than four or five years) could result in more money spent on interest over the life of the loan. So, if your budget allows it, try to get a shorter-term loan and pay off your car as quickly as possible.
4. Not Shopping Around for Insurance
Young drivers often assume they will pay sky-high auto insurance premiums and settle for the first quote they receive. However, shopping around can save you money on coverage without compromising quality.
Insurers use different methods to calculate rates and may offer discounts for factors such as good grades or being a safe driver. Do some comparison shopping online or talk to your parents’ insurer to see what kind of deal you could get.
5. Failing to Account for Maintenance Costs
Factoring in the cost of regular maintenance when budgeting for a car, such as oil changes and tire rotations, is important. Plus, you should set aside an emergency fund in case something unexpected happens, like your car breaking down or needing repairs. You can avoid financial hardship if your car needs repair by planning and setting money aside each month for these costs.
6. Purchasing More Car Than You Need
Sometimes young adults need to purchase a more expensive car than necessary. While it may be tempting to get that flashy ride you’ve been eyeing, this could mean ending up with more debt than you can handle and sacrificing quality for style.
It’s important to consider practicality when buying your first vehicle. Think about how often you will use it and what features are important for your lifestyle rather than just choosing the most attractive or expensive option.
Buying a car is an important decision, and it’s essential to research before purchasing. By avoiding the abovementioned mistakes, young adults can ensure they get the best deal and make the right choice for their needs. With careful planning and research, you can avoid buyer’s remorse and have a vehicle you can be proud of.