Getting behind the wheel of your first car can be a feeling like no other. However, when you first start thinking about the car you want to buy, the options can get overwhelming very quickly. Fortunately, by following the tips we’re going to go over below, you’ll be well on your way to securing a great first car that you’ll be sure to love.
1- Know Your Budget
If you’re planning on purchasing a new car from the dealership, you’re going to want to start by understanding where your budget lies. You never want to wait and see what loan amount you can get approved for to determine your budget. Rather, sit down and figure out what amount of money you can reasonably spend each month on a car payment. Be sure to remember that you’ll have other car-related expenses like insurance, fuel, and registration fees.
2- Get a Loan Pre-Approval
Far too often, people will go to a dealership to get approved for a car loan. The reality is that a dealership can only connect you with the select lenders they use. This leaves you stuck with whatever rates and terms these select lenders offer. Instead, you can check with local banks in your area to determine prospective interest rates, terms, and so forth. When you find a bank that has good terms, go get a pre-approval before heading to the dealership.
3- Make a List of Must-Haves
Before you walk onto the dealership lot, it’s best to make a list of what you’re looking for. What seating capacity does your new vehicle need to have? Do you need a four-wheel drive? Is fuel efficiency more important than towing capacity? Physically make a list of the attributes your new car must have to fit your lifestyle.
4- Test Drive Before You Buy
When you finally make it to the dealership lot, there’s going to be a lot of options for you to choose from. While you may feel strongly about how a car looks, you always want to test drive it before you buy it. That test drive could reveal if the vehicle just doesn’t feel right, has less cabin space than you thought, and so forth. Test driving allows you to ensure that you’re picking a vehicle that you’re going to enjoy driving every day.
5- Assess Your Credit History
Another step you may want to take before purchasing a new vehicle is to assess the current state of your credit. In general, the higher the credit score you have, the lower the interest rate you’ll be able to get on your loan. If your credit report shows that your credit cards are maxed out, consider paying them down before applying for a loan. This can easily help to boost your credit score and make you look more desirable to lenders.
6- Decide on a Down Payment
When you get an auto loan, you’ll have the option of using a down payment. This is a set amount of money you give the lender upfront to pay for your loan. They’ll subtract that amount from the total loan amount to determine your monthly payment amount. The more you put down, the lower your monthly payments will be.
7- Don’t Be Afraid to Negotiate
Car dealerships love putting sale amounts on their vehicles to convince buyers that there’s a set price on the item. The reality is that car dealers will put an extravagant markup on the price of a vehicle to pad their bottom line. As a prospective buyer, you can negotiate with the dealership to bring the price down to a more desirable range.
