How to buy your first car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make better financial choices by offering financial calculators and interactive tools as well as publishing objective and original content, by enabling you to conduct your own research and compare data for free to help you make informed financial decisions. Bankrate has partnerships with issuers such as, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this website are provided by companies that compensate us. This compensation may impact how and when products appear on this website, for example such things as the sequence in which they be listed within the categories of listing in the event that they are not permitted by law for our mortgage, home equity and other home loan products. However, this compensation will affect the information we provide, or the reviews that appear on this website. We do not cover the vast array of companies or financial offerings that might be available to you. FG Trade/Getty Images
4 min read The publication was published on March 02, 2023.
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers in navigating the ins and outs of securely borrowing money to purchase a car. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex subjects into bite-sized pieces. The Bankrate guarantee
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There are money-related questions. Bankrate can help. Our experts have been helping you master your finances for more than four decades. We strive to continuously give our customers the right guidance and the tools necessary to make it through life’s financial journey. Bankrate adheres to strict standards , so you can trust that our content is truthful and precise. Our award-winning editors and reporters produce honest and reliable content that will help you make the right financial decisions. The content we create by our editorial team is factual, accurate and is not influenced by our advertisers. We’re honest about how we are capable of bringing high-quality content, competitive rates and useful tools to you , by describing how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for the placement of sponsored products and services, or when you click on certain links posted on our site. Therefore, this compensation may impact how, where and when the products are listed within categories, with the exception of those it is prohibited by law for our mortgage home equity, mortgage and other home lending products. Other factors, like our own website rules and whether the product is available in the area you reside in or is within your own personal credit score may also influence the way and place products are listed on this site. We strive to offer a wide range offers, Bankrate does not include information about every financial or credit item or product. The average monthly amount for a used car is $526 for the 4th quarter in 2022, and the newer cars were higher at $716, according to . As a first-time buyer, these numbers can be daunting and more daunting when you’re not experienced with the process. However, confidence is about preparation, so take time prior to going online or to a dealership to learn the most important actions to follow when purchasing your first automobile. 1. Determine how much you can pay for buying a car that is successful is to determine first . your credit scores, monthly income, and the kind of car you’d like to purchase will all be considered in this decision. The key is to strike a balance between fitting your budget and choosing a car right for your needs. When budgeting, look at the , not just the sticker price that is advertised. The real price you pay out the door is the total amount you’ll be required to pay, including tax and dealer charges. Once you have that number or a reasonable estimate, take into account your average salary and use a , which will help you determine what the monthly cost of financing the vehicle will be. Tips from Bankrate
Car ownership is a major expense, an expense, so ensure that you’ve got enough money in your budget for any additional expenses.
2. Save for a down payment The for your future vehicle is the initial lump sum that you’ll pay. Aim to cover at 20 percent of the purchase price, which might take some time. Being patient and saving up for a is likely worthwhile if you can put off purchasing the car until you have the funds. This will help you save more money in the long run and reduce your monthly costs. If you are unable to wait, you can make an easier down payment. However, you may not receive a fair rate with your lender. If this is the case, you should consider a less pricey vehicle instead. The lower your overall cost it is the less you need to save for a downpayment. 3. Examine your credit report If this is your first major investment in a financial institution, it’s possible that you don’t have a lengthy credit history. If that’s the case, check your credit score to see what loan options are available. Your credit score is the main factor lenders consider to determine the interest rates you can expect to receive. The higher your credit score is, the better your interest rate will be. Verify your credit score prior to meeting with a dealer. You can do it online through or for free at . It’s worth it to make sure your credit is in good condition before applying for vehicle financing If you are able to. 4. Find the best car for you. Deciding which car is best for you takes a lot more consideration than just color or style. Consider other factors, like the car’s durability as well as its size and capacity for your requirements, technological features and safety features, as well as fuel efficiency and the climate where you reside. Check out and for these stats — and extra information about how much the car you’re looking at sells for. This is also a good time to determine if you’d like to purchase an . Although a brand-new car is exciting, certified pre-owned (CPO) can give you a lower price tag while still boasting new features and a manufacturer-backed warranty. If you’re not forced to take the car out whenever you can You can get a better deal by waiting . 5. Get prequalified for financing after you gather some information on the kind of car you’d like to purchase as well as your financial situation, you can look for lenders that provide prequalification. This step is vital in saving money and puts you in charge in deciding the best financing option available. Prequalification differs from full approval. Therefore, even after the prequalification process is completed, it’s not a final deal. Rather, preapproval will give you an idea of possible rates and conditions. You’ll still need to fill out an application form the preapproval, but you’ll have an idea if you can afford it before the deadline. The following are required in order to be prequalified the program: Average income and financial information. Personal information. Information about employment. Any current debt. 6. Go to the dealership- in person or online After obtaining prequalification for an loan and setting your sights on your dream car, it is time to start the purchasing process. Ideally, you should check out the available vehicles available in your local area. Most dealers have their inventory listed on their websites. They also let you schedule appointments. It is essential to take the wheel of your potential car and take it on an initial test drive prior to making a purchase. Be sure to adjust the seat, measure the space into your garage and is able to manage your daily routine. But you are not limited to dealers that are local to you. Online dealers such as Carvana, TrueCar and Vroom give you access to a national inventory of pre-owned cars. You can search and apply for financing from the comfort of your home If you decide to purchase one, you are given up to a week to test drive your car and have it . 7. Negotiate Negotiation may be intimidating However, finding the most favorable deal boils from taking a stand for yourself. Bring any documents needed, a thorough knowledge of your credit score and ask. The bottom line is: be ready to walk away if you can’t obtain the credit you are due. When the time has come to close the deal stay steadfast in your commitment to the number you agreed to. You can expect the dealer to insist on . Do not accept alternatives like paint protection or fabric, when an add-on like gap insurance might be more useful. Next steps in negotiation can be intimidating But getting the best deal boils down to being a strong advocate for yourself. Come prepared with any paperwork required, a clear knowledge of your credit history and be prepared to inquire. Concentrate on the price of the purchase and not on the monthly installment. And be prepared to walk away if you don’t get the deal that you deserve. If it’s time to conclude the deal, be firm on the agreed-upon number. The dealer is likely to insist on . Say no to options like paint protection or fabric when an add-on like gap insurance might be more beneficial. Find out more
The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ways and pitfalls of borrowing money to buy an automobile. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to control their finances through providing clear, well-researched details that cut otherwise complex subjects into bite-sized pieces.
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