10 Tips for First Time Car Buyers
It doesn’t matter whether you’re a recent grad with your first real job, a recent import or foreign worker, or someone other than the prototypical first time car buyer, the car-buying process is never filled with as much uncertainty as it is the first time. But no matter how much affection we develop for our high school hand-me-down or skateboard, at some point it’s time to move on. Being a good first time car buyer isn’t easy, but if it’s worth doing — and it is — it’s worth doing well. To that end, we’ve come up with some tips to help with the process.
We’ve compiled this list as a Top Ten, a few tips on what to buy, how to buy it and where to buy it.
10. Establish a realistic budget
This figure is generally based on what you can afford per month. The ideal is to pay cash, but in most instances when considering a new (or just newer) car, the nature of the transaction price often requires the leverage of financing. So, look at your cost of living in all the more important areas, like shelter, food, health insurance and Happy Hour. Once those are calculated, the remainder could be spent on a car payment, fuel, car insurance and — for cars without a warranty — mechanical maintenance.
9. Know what you can spend monthly
While this may look similar to #10, your level of indebtedness is different from your monthly commitment. Neither one — for a first time buyer — should be out of balance in comparison to your other assets. If you’re financing, figure $25/month for every thousand dollars that you borrow for 48 months, and $20/month on 60-month financing. It follows that every $10K borrowed is $250/month for four years, and $200/month for five. Again, this is the base obligation; insurance, fuel and periodic maintenance are above and beyond this.
8. Establish your transportation needs
You may think you need a minivan or pickup for ALL OF YOUR STUFF, but on those occasions when you’re moving to a new apartment or, uh, moving home, you can rent a pickup. Given the cost of fuel, insurance and — in many cities — monthly parking, don’t buy what you don’t need. And perhaps consider renting what you need, only when you need it.
7. Identify and prioritize your wants
This runs a bit counter to the previous tip. The first-time purchase doesn’t need to be your be-all/end-all acquisition, but you should still pay attention to your want list, as this isn’t a process you need to repeat every 18 months. Better to stretch a bit for those things in a car that satisfy you, than to be hit over the head — and pocketbook — with buyer’s remorse before you’ve emptied the first tank of gas. If getting what you want costs $40/month more, spend it — and skip a couple Happy Hours.
6. Do your research (it’s never been easier)
In that you’re reading this at one of the foremost websites for car purchasers, online research is also intuitive. There is, at this point, an amazing amount of both information and perspective on new cars and their late-model alternatives. There are listings devoted to cars for teenagers, cars for students and cars for first-time buyers. Expert reviews, owner reviews and consumer guides should all be referenced. Once you’ve digested those, balance it with your gut instincts — or those instincts of someone whose gut you trust.
5. Locate a convenient dealer
Despite our almost inherent misgivings, the salesman on the showroom is closer to a normal person than you might think. Most of the abnormal ones — we’ve heard from reliable sources — end up selling something less precious; let your parents worry about them. And while new and late-model cars have never been more reliable, they still need attention and that attention should be easy to access. When weighing a couple of choices — let’s say Fiat 500, Nissan Sentra and Hyundai Accent — compare dealer locations and, if all other things are equal, showroom environments.
4. Take a test drive
With all of the online sources available for your basic research, we believe the importance of the test drive has been marginalized. Virtually nothing is more important in your decision process than how you feel behind the wheel. And so many variables come into play — seat height, wheel adjustment, steering feel, throttle tip-in, outward visibility, control layout, etc. — that you simply must spend a reasonable amount of time driving the car. And that time should be more than five minutes on someone’s idea of a stop-and-go test route. Take at least half an hour, while trying stop-and-go, freeway merging and freeway speeds.
3. Determine the proper purchase price
Once you’ve decided what you like — and have already established what you can afford — it’s time to arrive at a purchase price. This, too, has been made easier by online sites such as this one. The First Time Car Buyer has its Fair Purchase Price, which gives you an accurate idea of what people have paid in your area for the car you have an interest in.
2. Secure financing, or know your options
Financing issues are somewhat like the purchase price; there has been an exponential growth in the number of resources. That, however, is mitigated by your lack of credit history or, in an increasing number of instances, marginal credit history. We are highly specialized and offer a complete first time car buyer credit program. Apply now
1. Enjoy the process
We know, the above advice makes buying a car seem like an ordeal, but even those with no interest or passion in a car or truck can — if the process is given half a chance — be stimulated by the sheer variety of options available, and the genuine creativity that goes in to today’s automotive menu. With financing rates low, the Canadian industry on firm financial footing, Japanese plants up and running and the Koreans going like gangbusters, your options have never been better (especially in the “entry-level” category) — and car ownership never more rewarding. Take your time in the process, and you’ll be delighted with the outcome for at least the first 48 (or 60) monthly payments.