Have you recently passed your test and itching to gain the freedom of having your own wheels?
Owning a car gives a level of independence that is hard to beat, a major turning point in life.
Maybe, you passed your test a while ago, but put off getting your own vehicle. Borrowing a car from family and friends works for a while, but it isn’t convenient when the car isn’t there just as you need to use it.
Whatever your reason of situation, buying your first car is a major step. Unless you have a nice lump sum in the bank, it also means committing to repayments.
Often the ‘dream’ first car is a little out of all of our budgets. However, we can normally find something pretty cool with a little help and some time hunting.
Building your credit rating and learning to budget repayments are both great things to develop and buying a car can help with both of these.
Here we will try to make your first car purchase a little easier, providing you with the key things to consider and some easy options for getting the nicest car you possibly can (within your budget).
Things to consider before buying your first car
You are finally ready to make the commitment and go to get that new or ‘new to you’ car. Now, there are some things to consider before you go jumping in with both feet:
- Set your price before looking – what is the ideal price and what is the most you can afford to spend?
- Do you need to buy a new car, or would a second hand car be OK?
- Do you know about cars? If not, take a friend or mechanic with you to view any vehicle you are seriously considering
- If the car is secondhand, check the service and owner history
- What kind of vehicle is realistic? We all dream of that two seater sports car or owning a muscle car, but will that actually work with your plans for the next few years? Is the insurance affordable?
- If you use a dealer, check they have a good reputation
- If you buy privately, have the car go through a full inspection. Some extra money spent at this point can save a lot of expense later
- Test drive the car before buying. You want a car that fits you and your driving style
- Negotiate, as even new cars can get free extras thrown in, or discounts given
- Don’t jump into dealership loans or leases – there are normally hidden expenses
The above list isn’t absolutely everything that should be considered when buying a car, but it does cover some major points.
Simple things, like getting the car checked by an expert, can save you a lot of time, headaches, and money long-term.
You also need to be prepared to walk away if there are major issues or the ‘deal’ just seems too good and isn’t feeling right.
Finance options for your first car
When getting a new car, money talks. The more you have available, the nicer the car you can get and the better the price you can negotiate.
Lease to purchase is a popular approach, but it is important to check the small print. Locked and sometimes expensive dealer services and other things can drive up the amount you actually end up paying.
A title loan can be a good option, as you are actually borrowing money against your car as an asset. This allows for good interest rates and a high chance of acceptance.
If you have been employed for a while, you could apply to your bank for credit. However, be careful to read clauses, particularly ‘repayment protection’ that can drive up the price but might not actually cover your situation/job.
Credit cards are an option, but only for smaller purchases or if you will repay within a promotional period, as after that the interest is just too high to consider for car finance.
The perfect solution is cash of course, but that often isn’t realistic for most of us.
Whatever you choose, be sure to do your research and find a balance between what you dream of owning and what is realistic – but a little fun or quirkiness is never a bad thing.
