How Do I Buy My First Car?

Buying your first car does not have to be complicated. With adequate research and planning, you can get the vehicle of your dreams without the stress. To aid your first-car-buying experience, we have created a buying guide to help you out. You will learn what to look for in a car and how to save money on your purchase.

Let’s dive into it!

Understand your needs

While trying to pick your first car, almost everything will appeal to you—sports cars with insane speeds, trucks with off-road prowess, and many other vehicles. You could be sidetracked and spend on something you do not need. Before you know it, you are stuck with a car you do not want. To avoid this, you must separate your needs and your wants.

You want a sports car, but do you need all that performance? You like buying a truck, but will you be able to navigate crowded city streets with a half-ton vehicle? Taking the time to understand your needs will help you pick a car that genuinely suits your lifestyle.

Understand your budget

Do you have enough money to pay cash, or do you have to finance your purchase? If you are financing, how much in monthly payments can you afford? Typically, around one-third of your monthly income will go to paying out the loan.

After subtracting money for loan payments, you must make sure that there’s money left to take care of other needs, e.g., rent, food, etc. Also, consider running costs that come with car ownership - gas, servicing, replacement of worn parts, etc.

Do your research

At this point, you should have a good idea of the car you need. If you do not, carry out step #1 as it allows you to whittle down your options to a manageable number. Car research involves finding the model that best suits your needs and provides value for money. The process is easier than you think. All you have to do is go online, and you will find reviews for different models.

In particular, sites like Kelley Blue Book, Caranddriver, iSeeCars, J.D. Power, etc. provide useful reviews on various cars. You can check for things like price, resale value (vital if you plan to resell), reliability, gas mileage, cargo capacity, performance, etc. You could even compare a particular model to competitors to see which is better.

If you plan on buying used, sites like Autotrader, CarGurus, CarMax, etc. have thousands of cars listed for sale. You can compare prices and negotiate with sellers to find the best deal.

Fix your credit

Generally, this applies if you are financing. However, since most Americans resort to financing, we might as well put it here. First, a word on credit: Your ‘credit rating’ or ‘credit score’ determines the interest rate charged on your car loan. Thus, a good credit score will likely reduce your monthly payments and vice versa.

To know your credit rating, visit Annualcreditreport.com to get a copy of your credit rating report. If your credit report is good, then you have no problem. However, if your credit rating is low, you need to improve on it before you apply for financing. Here are some things that can help you better your credit score:

a. Fixing errors on your credit report

b. Making your payments promptly

c. Clearing up existing credit card debt

Shop around for loans/financing

A quick tip: never go to the dealership and accept whatever financing arrangement they offer. Dealership financing is seldom favorable. You would be better off taking a loan from your bank, credit union, or any other lender. The rates are often better, compared to what a dealership would offer.

With adequate research, you can compare loan terms from different lenders and take the best deal. You should look for a loan with little or no fees attached and a low interest rate.

Start shopping

Now that you have the financial part figured out, it is time to get that car! Thanks to the good old Internet, car shopping is easier than you think. You can order a car online and have it delivered to you, all without stepping in a dealership.

Should you prefer a real shopping experience, the Internet is still your best friend. Say you are planning to buy a Toyota, you can Google “Toyota dealerships near me” and see the dealers available in your community. Nowadays, dealerships have websites listed in their Google profiles. You can contact your preferred dealer and schedule an appointment all over the Internet.

Visit the seller

Depending on whom you are buying from, the ‘seller’ could be a private individual or a dealership. Buying from a dealership is straightforward: test-drive the car, and if you are satisfied, case closed. Buying from a private seller is a different kettle of fish. You will need to conduct various checks to ensure the car a) is not a stolen vehicle b) is functioning well c) doesn’t have hidden problems. Here are some tips for inspecting a pre-owned vehicle:

a. Examine the paperwork–Check the vehicle’s service history to see if it received regular servicing. Also, look for any inconsistencies in the vehicle’s documentation (such as wrong color or engine number).

b. Check tire tread wear–If the tires show signs of excess wear, you may have to replace them sooner than expected.

c. Check for fault lights on the dashboard–If you see any warning lights, check the manual to find out what they mean.

d. Ensure all components are working correctly–Seatbelts, wipers, door locks, lights, windows, internal controls, A/c unit, radio, CD player, etc. Check all these to see if they are working, as they should.

e. Check for signs of rust, scratches, and dents–These are often signs that the car has seen some rough use. While this is not a bad thing itself, it could mean that internal components are more prone to excess wear.

Now that you have inspected the car, it is time to drive it. Driving a car (used or new) lets you test its performance and detect any problems. Here are some tips for test-driving a car:

a. Test the clutch–If the clutch delays before engaging, it is likely worn out and needs replacement.

b. Evaluate its performance–Note how the car behaves under acceleration. Some problems only surface at high speeds, so be sure to step on the gas while driving. Also, notice any excessive vibrations and noise in the cabin.

c. Test the brakes–Spongy brakes are a sign that something’s wrong; stiff brakes, too.

d. Examine the steering wheel–Ensure it does not vibrate while driving. Also, check for any stiffness when turning the steering wheel.

Close the deal

Once you are satisfied after inspecting and driving the car, the next thing is to complete the purchase. If you followed the previous suggestions, you should have secured financing ahead of your visit to the dealer. Do not, we repeat, do not allow salespeople to talk you into accepting a deal that is less than favorable.

If possible, negotiate with your dealer for a reduced price. While it may seem crude, haggling can save hundreds, if not thousands, of dollars on your car purchase.

It is the same thing with private sellers: negotiate, negotiate, and negotiate. If you are lucky, you may meet a desperate seller who will accept your terms after some prodding. This way, you get to save money for handling other costs that come with owning a new car.

Register your car

After buying your car, you must register it before driving it on public roads. Depending on local regulations, the registration process may be simple or complex. Visiting your state’s Department of Motor Vehicles (DMV) should show what is involved in the registration. You will also find out how much you have to spend to register your car.

Some DMVs may require you to bring your driver’s license, proof of address, or some means of identification. Read the guidelines on the website carefully and ensure you take all necessary documents when going for the registration.

Once you have registered your car, you are free to drive it anywhere in the country. However, keep the following things in mind:

1. Always service your car promptly and adequately.

II. Keep hard riding to a minimum; your car will last longer that way.

III. Take care of your car’s appearance: Asides giving your vehicle a good look, it will increase its resale value.

Enjoy your new car!