Buying your first car can seem like a daunting prospect. There are so many different things to consider, from price to mileage to insurance, and it can seem impossible to know where to start. In this guide, we find five top tips to help you when you’re buying your first car.
1) Set a budget first
Knowing what your budget is before you start searching for a car will massively narrow down the search and enable you to make sensible choices. Coming up with a budget involves working out how much you want to spend on the vehicle upfront, and how much you want to spend on insurance, gas, maintenance, road tax, and other regular costs.
Generally speaking, insurance will set you back by around $100 a month depending on the vehicle, your age, and other factors. Gas could cost you a similar amount if you drive the car a lot.
2) Consider buying used
While buying a brand-new vehicle can seem a much more exciting prospect than getting something second hand, it is usually not the wisest financial decision, especially when buying your first car. Vehicles are some of the fastest-depreciating assets out there, losing an average of over 10% of their value as soon as they leave the dealership. After five years, your car is usually worth less than 40% of what you originally paid for it!
When buying a used car, most of its depreciation has already happened, so it will usually be a lot less expensive.
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3) Make a list of your vehicle requirements
Different vehicles are ideal for different needs. Working out your personal needs by making a list before you choose your vehicle can make the choice easier. For example, if you are on a tight monthly budget, a car with better gas mileage is a good choice. If you are safety-conscious, a high safety rating is something to look for. If you are going to be carrying groceries, or other passengers, consider how much space you will need in a car.
Keeping this list handy while you shop around is a good way to stay focused and help you eliminate options that aren’t ideal for you.
4) Decide on a financing option
There are various financing options when buying a car. Consulting a bank or credit union before you go shopping is a good way to get some helpful advice. Knowing the different options available can help you to make the best choice. Once you have bought a vehicle, an extra financing option becomes available for your next car (or for any other expense). Auto loans allow you to use your existing vehicle as collateral for a loan. How does an auto loan work? – Premium Car Title Loans can explain further.
5) Get insured
Choosing insurance cover before you buy a car is essential! Unfortunately, insurance premiums are usually higher for first-time buyers and inexperienced drivers. However, you may still be able to find a good deal if you shop around and explore the different options available. If you are younger, getting added to your parents’ insurance policy may be the best choice.
We hope that these tips come in handy when choosing your first car.