5 Tips for Financing Your First Car
Buying one’s first car can be a tricky process and sometimes even difficult for those who are jumping in and doing it. Financing your first car is quite the plunge, and is indicative of coming of age and entering into adulthood. Studies show that most Americans buy their first car between the ages of 18 and 25. For young adults who are getting ready to make this big purchase and big commitment, there are a few things to know before you buy:
Tips for Financing Your First Car
- Put twenty percent or more down, if you can. Just as is the case with buying a house, doing a conventional loan where you put down twenty percent of the total cost in your down payment is really the best way to go. This allows you to throw in a hefty chunk of the car’s cost right off the bat. This allows your term to be shorter too, because you’ve already paid so much up front. This also allows for you to get a lower interest rate as well.
- Shop around and don’t get stuck on one dealership. There is so much competition within the automotive industry that it’s very likely that you will be able to find an even better deal, if you just shop around and try to find that great deal. Shop around as much as you want until you are sure that you have explored all your options and that the deal you found is the best deal out there.
- Get a co-signer! Want to get an even lower interest rate and an even better deal on financing your first car? Get a parent, relative, or close friend to jump on the loan with you. You can make the actual financial payments themselves, but you can essentially borrow your parent’s or relative’s or friend’s credit score to get the best rate possible.
- Look for special offers and buyer incentives. Sometimes, if you wait, you can get a phenomenal deal on a car just because you bought it at the right time. Dealerships will have special sales, and these are the best times to go in and buy a car, after you have done your research and shopped around.
- Don’t go crazy on luxury or options. Keep in mind that this is your first car, and you should be paying more attention to longevity, practicality, and budget than on flairs, bells, whistles, options, and luxury. Most experts advise first time car buyers to not overextend themselves to buy something really fancy. Think of it this way, if you overextend yourself financially and buy a car that you can’t really afford, then you will be unhappy in the long run and you will be worrying about the debt so much that you’ll never be able to really enjoy the car. Best to save that for later on in life when you can truly afford such a big purchase.
Be Careful, but Take the Plunge!
By all means, be careful when you are setting out financing your first car. However, don’t let that take advantage of you and fully take you over. Take your time and make sure you are making the right choice when it comes to buying the car, but then do actually go buy it! Commit to your decision and you will be proud of it in the end.
As a final tip, consider bringing a family member or experienced car buyer along with you. It’s great to have some help, and to have someone who knows what they are doing when it comes to financing a car for the first time. When you’re ready, give us a call and we will help you!