Passing your driving test and being granted the independence of being able to go where you want on your own is a big milestone in your life. There is just the small matter of negotiating the buying process involved in getting your first set of wheels.
Your search for a first car could be even more challenging if your credit score is not as good as you would like. That is a problem that can be solved if you search bad credit car loans Salt Lake City, for instance, you should be able to find a deal that works for you.
That’s just one aspect of the whole process of navigating the difficult waters of buying your first car. Here’s some tips to help you achieve your aim of hitting the highway in your own car.
Start by setting a realistic budget
The first important step in buying your first car is working out how much you can realistically afford to pay upfront, and monthly. Don’t just take the sticker price of the vehicle as the final amount. You also need to account for things like taxes, insurance, registration fees, and long-term running costs, like maintenance and fuel.
It’s best to be honest with yourself about what you can handle financially. As a guide, it is generally recommended that your total car expenses should not exceed 15-20% of your monthly income.
Don’t forget to factor in down payments and loan payments if you plan to finance the car.
Which is best, new or used?
Your budget will usually dictate that decision, as a new car is much more expensive to buy. It also makes sense to get a cheaper car when you first start driving, as you could add a few dents and scratches in your first few years of driving, no matter how good you think your driving is.
Although new cars come with the latest features, warranties, and maybe better financing options, they depreciate quickly, sometimes losing as much as 20-30% of their value in the first year.
Used cars, on the other hand, are more affordable and depreciate at a slower rate, but they may come with higher maintenance costs and fewer warranty protections. When choosing between new or used, think about how long you plan to keep the vehicle and what you prioritize more, upfront costs or long-term value.
Always research your financing options
Unless you’re paying in full, you’ll likely need to finance your first car, which means taking out a loan. Shopping around for the best loan rates is just as important as finding the right vehicle. Start by checking your credit score, as this can significantly impact the interest rate you qualify for.
Try to keep loan terms as short as possible, ideally 48 to 60 months. This helps to avoid paying too much interest over time.
Decide on your must-have features
With so many vehicles to choose from, it’s important to create a list of must-have features to narrow down your search. Think about the type of car you need for your lifestyle. Do you need a compact car for city driving, a fuel-efficient hybrid, or a roomy SUV for family road trips?
It’s also important to consider practical features like safety ratings, fuel efficiency, cargo space, and technology integrations like Bluetooth or backup cameras.
Avoid getting swayed by flashy extras that can inflate the price of the car without adding much to your day-to-day driving experience. Stick to your list of must-haves and focus on value rather than luxury.
Get pre-approved for a loan
It’s always a good strategy to get pre-approved for a loan before stepping into a dealership. This often gives you a big advantage. Pre-approval lets you know exactly how much you can borrow and at what interest rate, making it easier to stick to your budget. It also shows dealerships that you’re a serious buyer, which can give you more leverage during price negotiations.
Test drive a few cars before you decide
It’s tempting to settle on the first car you fall in love with, but test-driving multiple cars is a critical step in the buying process. Testing different models and makes will give you a better sense of what you like and what feels comfortable to drive. Pay attention to factors such as seat comfort, visibility, handling, and noise levels.
After the test drive, ask the dealer about any known mechanical issues, vehicle history, and the maintenance costs associated with the vehicle. This helps you get an overall impression of whether you have found the right car for your needs and budget.
Negotiate the price
Once you’ve settled on a car you like, it’s time to try and negotiate the best possible price. This is where doing your homework pays off. Use resources like Kelley Blue Book or Edmunds to determine the typical value of a car based on its make, model, year, and condition. Remember, dealerships often mark up prices, as they expect buyers to negotiate the price down a bit.
Don’t be afraid to make a lower offer, salespeople expect this. However, it never works to be too aggressive or confrontational in your approach. If the dealership won’t budge on the price, consider asking for other perks like free oil changes, extended warranties, or additional features at no extra cost.
Always be willing to walk away if the dealer isn’t offering a fair price. There are plenty of cars out there, and sometimes showing that you’re ready to leave can prompt a better deal.
Think about the total cost of ownership
It’s wise to remember that when buying your first car, the price tag isn’t the only number you should focus on. The total cost of ownership is a key factor. This involves thinking about ongoing expenses like fuel, insurance, maintenance, and depreciation.
Some cars may have a lower purchase price but could end up costing more over time due to poor fuel efficiency or high maintenance costs. You should also check how much your insurance is going to cost, as this can vary greatly between models.
Make no mistake, buying your first car is an exciting thing to do, but it is also a major financial decision. However, with the right approach, you can make an informed choice that meets both your needs and budget. By following these proven tips, you’ll be well on your way to navigating the difficult waters of car buying and finding the perfect vehicle for your lifestyle.