Buying your first car is an exciting experience. With a car comes the freedom to do and go wherever you want, on your own timetable. Cars mean that you are no longer beholden to a bus schedule nor do you need to rely on friends or cab drivers to get you from point A to point B. As fun as this can be, it also has the potential to be a stressful experience. After all, a car is a major investment. Driving home in the wrong one can be devastating, both to your newfound sense of freedom and your wallet. Keeping the following tips in mind can help make this process much easier and less stressful.
The first and most important thing is to examine your finances and set a budget. Failing to do can result in you taking on more than you can reasonably afford. It could also cost you more in the long run, as having a good down payment ahead of time may cut down your monthly payments and even the interest you owe.
Start by looking at your current monthly expenses and determining what the maximum you can afford each month. A good rule of thumb is that your total monthly debt should never exceed 36 percent of your gross monthly income. You can also find affordability calculators on many websites, including Edmunds and Cars.com.
Don’t forget about maintenance costs, insurance, and gas. These are unavoidable monthly costs for all car owners, even those that own their cars outright. While you may not know exactly how much you are going to have to shell out for these expenses, you can sometimes get a ballpark figure based on the type of car you are searching for. Midsized cars are cheaper to insure and run than SUVs, for example.
Pick a Suitable Car
Next, you should spend some time thinking about your vehicle needs. Be as realistic as possible when completing this exercise, dividing your list of preferred vehicle features into needs and wants. For example, if you tend to take long road trips to visit friends and family, you should pick something that performs well on the highway and is reliable. Other individuals may need something small and sporty for city driving.
Spend some time thinking about how long you want to own the car you are buying and how it fits in with your life goals. For example, if you want to have children in the next five years, you may not want to buy a sporty two-seater. Other individuals may want to begin careers that involve a lot of travel. These people should avoid gas guzzlers or small vehicles that may not have enough room for everything you need to travel.
You should also test drive the car to be sure that it is comfortable enough for your needs. Some places even offer a 24-hour test drive, so you can bring the car home and experience it as you go about your daily life. Even if you cannot take advantage of that type of service, you should still take the car out for a spin. Do a bit of homework and find out if there are roads you can drive on near the dealership that resemble those near your home and plan out your test-drive route accordingly.
Secure Your Financing
Once you determine your budget and have found the type of vehicle you want, the next set psi to secure financing. This is something you can start looking into the moment your budget is set, though many lenders cannot guarantee rates or financing until the purchase paperwork is complete. Depending on the strength of your credit, you may qualify for pre-approval, which is a useful first step. Pre-approval lets you know how much you have to spend on your new car.
If you do not qualify for pre-approval, do not worry. You may still qualify for financing after you find the specific car you want to purchase. When looking for sources of financing, remember that you are not obligated to finance through the dealership. Many people find this to be the most convenient option, but it does not always necessarily translate to the most cost-effective. Those looking for the best funding options should start by calling their current bank. If you have a long history with the bank, you may be able to get a favorable interest rate. Credit unions are other places you can visit to find a good loan.
Get Insurance and Register Your Car
Your work is not done once you have purchased the car. Your next task is to have insurance in place. This is a process that you can start when you start to set your budget. After the purchase goes through, you should contact the insurance company follow up on earlier quotes. Take the time to get insurance quotes from a few different agencies to be sure that you get the best possible deal.
Once you have insurance in place you can then register your car with the DMV. There are a few things you need to bring with you when you go to register your car. They include:
- Your driver’s license
- The registration paperwork
- Proof of insurance
If you lack even one of these items, the DMV is not going to issue your registration. It is a good idea to bring a second piece of photo ID and any secondary proof of insurance with you when you arrive, just to be sure your registration goes through on the same day. Remember that registration is legally required before you can take the car on the road. Failure to do so can result in steep fines, fees, or, in extreme cases, could even mean having your licenses suspended.
Following the advice above can turn any stressful car buying experience into one that is enjoyable and successful. Be sure to keep a clear head when shopping and weigh the pros and cons of any car you are thinking of buying and you are bound to go home with the perfect one for your needs.