11 Tips for Buying Your First Car
- Get Comfortable With the Numbers
- Figure Out Your Needs
- Consider A Used Car
- Start Researching Loans
- Come Up With a Shopping List
- Start Shopping For Insurance
- Read The Carfax Reports
- Take a Test Drive
- Get The Car Inspected
- When You’re Ready To Buy
- Take Your Time
If you’re shopping for your first car, you’re likely to find that a lot of car-buying advice out there assumes that most readers are familiar with the process. Or, if you’ve bought a car in the distant past and are now jumping back into the market, you’ll find the experience has changed a lot over the years. The good news is, a lot of that work can now be done from the comfort of your own home, including research and financing. If you fit into one of these groups, the following tips will help you find the right car at the right price.
1. Get Comfortable With the Numbers
The first important step is figuring out what you can afford. This might be concurrent with the next step in our list — what you need in your car — but ultimately, your finances will determine your limits. It’s easy to forget about some of the expenses associated with car ownership if you haven’t had to pay them before, but it’s better to think about them up front instead of being caught off-guard later.
So now, before you start daydreaming about specific cars, determine how much you’re comfortable spending. A common rule of thumb is that your car shouldn’t cost more than 20 percent or so of your annual pre-tax income.
From there, you can think about your down payment and the monthly payments (including interest rate, if you take out a loan, as most Americans do), but don’t forget about additional expenses such as gas, insurance, and maintenance. Will you have to pay fees to park where you live, work, or go to school? What does your state charge for license and registration? Will an unexpected repair bill cause you financial hardship?
These are hard questions, but the answers will help you figure out what a car will really cost, and may help shape your expectations and priorities for some of the next tips on this list.
2. Figure Out Your Needs
The numbers you came up with in the previous step may have altered your perception of what you’ll be driving, for better or for worse. Next, you’ll have to figure out your needs first – and put your desires behind those. Do you need a reliable small car or crossover to haul your stuff to and from your college dorm? You might have to compromise on considerations such as the brand or color of your car. Are you an empty-nester looking for an inexpensive yet fun car for Sunday drives? A well-maintained used car will likely suit this purpose just as well as a new one. Keeping your primary goal or goals in mind will help keep your expectations realistic. That means you’ll be under less pressure, and you’re less likely to be disappointed with your purchase.
3. Consider A Used Car
The allure of a new car is hard to ignore, but frankly, for most first-time car buyers, a used car will work just fine. Buyers can save a ton of money; on average, a three-year-old used car is being sold for about half of what it cost when it was new. And considering how well-built cars are today, three-year-old used ars should still be able to run well for years to come.
That said, if you haven’t shopped for a car before, or in a long time, it can be overwhelming to get up to speed with the long lists of features and options on modern cars. Rest assured, going with a used car doesn’t mean going back to the Dark Ages. If it’s important to you to have modern safety technology, or features like smartphone integration, focus your search on cars that are within a few model years old.
4. Start Researching Loans
With your working budget in mind, start shopping around for loans. Getting the wrong loan can add a ton of money to the total you’ll pay for your car, so this isn’t a step you want to leave until the car dealership. That’s not to say you should automatically rule out dealer financing; if you qualify for a manufacturer-backed promotional loan on a new car, it can be a good deal. However, if you’re buying used, you’re typically much better off with a bank or a credit union. If you go with a bank or credit union, get the details finalized before selecting a car. That way, you’re certain about how much money you’ll have to spend.
Take some time to read more about this complex topic with Carfax’s guide to How to Finance a Car.
5. Come Up With a Shopping List
If you’re shopping for a used car, you can use Carfax’s car listings to see what’s available near you in your price range, and from there, you can look for models that meet your needs. Make note of the models that pop up often; these may be good candidates because you’ll have a range to choose from in terms of price, condition, mileage, and features. Get familiar with the brands and models that catch your eye, and check out their reviews so you know what to expect. Now, start making a list of vehicles that you want to check out in person.
6. Start Shopping For Insurance
When you have some idea of the models you’re going to test drive, get some insurance quotes. Insurance costs vary based on a lot of factors, including make, model, and vehicle type, and if you find that quotes for a specific vehicle are consistently higher than the others on your list, that might be reason enough to strike that model off your list.
Car insurance is one of the biggest expenses associated with car ownership, and it’s complex enough to be worthy of its own guide.
7. Read The Carfax Vehicle History Reports
Once you’ve reduced your list of possible cars to just a handful, start reviewing the Carfax Vehicle History Report for each one. This vehicle history report will alert you first to its maintenance history: Did the car get regular oil changes and tire rotations? Details like that can give you a good sense of how well the car was maintained by the previous owner.
In addition, it can detail potential problems with a car, such as accidents, flood damage, or possible odometer tampering. First-time buyers, in particular, should steer clear of cars with these kinds of problems. Even if they’re cheaper to buy, the extra hassle isn’t worth it, and incidents like crashes and floods may even pose a safety hazard.
Some sellers, especially dealerships, may provide a link to a vehicle’s Carfax report right in the online listing, but if you’re really interested in a car that doesn’t have a Carfax report provided by the seller, it’s worth the investment.
8. Take a Test Drive
The test drive might be a little overwhelming for the uninitiated, particularly for those who don’t drive much and especially if they’re comparing several cars on the same day. Make appointments to see the specific cars you want to drive. Get comfortable with the seat adjustments, the mirrors, the technology features — will these feel right for you on a daily basis? Make sure everything works. Take notes to help you remember what you liked or didn’t like about them.
Turn the radio off while out on a test drive, so you can listen for any odd or unexpected sounds. Test every feature to make sure that they work as you expect them to. Take your time with the process to make sure you’ve got the full lay of the land; don’t let any seller rush you through the process.
If you have child seats, bring them along to see how easy or hard they are to install. Make sure you try backing out of a parking space to see how the sight lines work for you. Make sure you get the car up to highway speeds to ensure that it works well not just at low speeds. And, if you can, drive it over rough roads so you have a sense of how well the suspension works, and what you can expect the noise levels to be in real-life travel.
9. Get The Car Inspected
This is good advice for any used car buyer, but it’s especially important for a first-time car buyer. That’s because someone familiar with car ownership might be able to spot some problems, but if you’re not used to driving or maintaining a car, well, that’s a lot to ask of yourself. When you find a used car you want to buy, tell the seller you’d like a pre-purchase inspection conducted by an independent mechanic. Get recommendations from friends and family before you go, so you have a mechanic in mind. Because they have so much knowledge about cars, and because they can see parts of the car you’ll never be able to see, the mechanic can give you an honest read of the car’s condition and alert you of potential problems. Expect to pay about a hundred dollars for this service. If the seller isn’t okay with this, consider it a red flag.
10. When You’re Ready To Buy
Be prepared with all the paperwork you’ll need, including your driver’s license or ID, financing information, insurance information, and copies of your state’s sales and registration documents. Signing over a lot of money in exchange for a set of keys can be overwhelming, but it helps to have everything together and ready to go.
Arranging to pay for a car, particularly from a private seller, can also be a nerve-wracking affair. Plan to meet to check out the car, and potentially close the deal, in a public place. For the actual payment, most private sellers will expect cash or a cashier’s check, both of which make the parking lot of your bank an ideal place to meet up, since you can get payment and close the deal right there. Avoid wire transfers in general, simply because they’re complicated to initiate, they involve sharing banking information amongst strangers, and the potential for fraud or a scam is high. Be wary of a seller who insists on a wire transfer. Always be sure to get a bill of sale, which will serve as the receipt for your payment, and double-check its accuracy.
Whether you’re buying from a private party or from a dealer, you should always consider your new or used car purchase final. Some dealers do have generous return or exchange policies, and limited returns may be required by law in some areas, but these are the exception rather than the rule. In general, if you have buyer’s remorse, you’re out of luck.
11. Take Your Time
Finally, whether you’re buying a car for the first time ever or the first time in a while, you should move at a pace that’s comfortable for you, for each step of the process. The amount of time it takes to buy a car is different for everyone, so don’t get hung up on how long it takes for you. An experienced car buyer may be able to zip through the process pretty quickly, sometimes in a couple of days or less, particularly if there’s an urgent need to replace a vehicle. If you aren’t under any pressure to get a new car in a specific timeframe, then don’t let anyone — especially the seller — push you to buy faster than you’re ready.
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