Everything You Need to Know Before Buying Your First Car
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Car ownership continues to climb in the U.S. Even city dwellers who have never owned a car before are planning to purchase a vehicle, with safety and freedom being the top motivators. You may be someone who’s looking to buy your first car, and this can be both an exciting and daunting time.
You’ve probably heard about a car sales experience from friends and family who encountered a greasy salesman with a slick moustache and a tweed jacket, looking to get rich off of every unsuspecting car buyer. This could be feeding the fear that you’re going to make a bad choice and bleed money. You may be wondering what to know when buying your first car.
But fear not! While it’s easy to get swallowed up in the car buying process at a lot or dealership, you can save yourself some headaches by following six handy tips for buying your first car.
Establish Revolving Credit First
In the U.S., about 84 percent of new car purchases are financed. The stats are similar with used cars, too. Unless you’re one of the select few that has saved up to pay for your car in cash, you’ll need to finance your car.
Whether you’re buying your first used car or your first new car, financing is often an issue if you haven’t built up your credit score. If you’re buying your first car with no credit, lenders have no idea if you pose a risk of non-repayment and you could be denied.
It’s a good idea to establish credit months or years in advance. An easy way to start is to get a credit card, charge small amounts to it, and make monthly payments like clockwork so you won’t get dinged by the high interest rate. When you’ve begun to establish a credit rating, lenders are less hesitant to give you a shot.
Don’t Rush into Buying Your First Car
Buyer’s remorse is real, and it’s a common occurrence when you rush into buying your first car. What tends to happen is that you get excited and neglect to think through the details. You could end up spending more than you budgeted for; the car you choose may have a sketchy past; or the car may not really serve your needs.
If you don’t have to buy a car in the next couple of days, then pace yourself. For example, you can decide that on your first shopping day, you’ll simply browse through your options and do some further research. On the second shopping day, you’ll take a car or two for a test drive. And then you’ll only make an offer after you’ve gone home and slept on it.
Slow, methodical shopping will help you make smart choices. This way, you won’t end up with a sports car when you really need a minivan.
Buy Something Reliable, Not Necessarily Cheap
One mistake plenty of first-time car buyers make is to prioritize price and buy the cheapest car they can find. Cheap doesn’t always mean inexpensive. Cheap cars are often older and have higher mileage, meaning they can break down more often and likely aren’t very fuel efficient.
A newer car in a slightly higher price range with a warranty is likely more reliable, and you won’t have to deal with unexpected repair costs.
Get a Vehicle History Report
You wouldn’t get married without knowing your partner’s past, would you? Likewise, you shouldn’t jump into car ownership without first getting to know your potential car’s history. A vehicle history report, or VHR, like those provided by Carfax, can be helpful in this regard.
In the VHR, you’ll find details like previous accident claims, the title status, open recall campaigns, and warranty visits to the dealership. Red flags to look out for are a branded or salvage title, massive accident repair costs, and unexplained gaps in the report.
Expect Car Costs to be About Twice as Much as You Expect
When buying your first car, you may think you only need to budget for the car payment. But there’s more to it, and many first-time buyers neglect to factor in additional costs. These expenses include car insurance, fuel, car washes, parking permits, and maintenance and repairs. It’s usually safe to assume that your total costs will be twice the amount you expect.
Get the Right Level of Insurance Coverage
One of the most important tips for buying your first car is to not skimp on your car insurance. It’s tempting to go for cheapest option so you can keep a little extra cash on hand. But if something goes wrong, you’ll wish you had the best comprehensive insurance coverage available. It’s good to have rental car coverage, high coverage limits, and a lower deductible.