First-Time Car Buyer Financial Advice

When you are in the market for your first car, it can take you hours as you scour through the various makes, models, and even colours of your new vehicle. But don’t forget that you also have to think about how you are going to finance this big new purchase in your life. To help steer you onto the right path, we are going to give you a few pieces of advice which will hopefully make things clearer and less daunting.

Determine How Much You Can Afford

Before you do anything else, you need to determine exactly how much that you can afford to spend on your new vehicle. As a general rule of thumb to follow, you should only shell out what you can easily repay over a three-year period. Be realistic about what you can afford and make sure that you don’t stretch your budget too much. This way, you are less likely to get swept up in the excitement when you head down to your first car showroom.

Shop for a Loan First

Once you have clearly established your budget, the time has come to start looking for a loan. While a lot of lenders will not guarantee a rate until you sign the papers, they may give you a certain amount preapproved. Try contacting your bank in the first instance and a credit union if you are eligible. You can compare the offers that you receive using a car loan calculator. You should bear in mind that PCP claims are often required when it comes to cars. Don’t assume that your local dealer is going to give you the best rate when it comes to financing.

Look for a Car

You have sorted out your budget and secured funding, and the time has come to actually start searching for your new car. The internet has made it so much easier to compare and contrast the different possible deals that you could get. If you are going to go down the route of going through a private seller, give yourself peace of mind by having a component mechanic look over the vehicle. If the seller is reluctant to allow you to do this, you should treat this as a red flag.

Fill Out the Loan Information

Now that you have picked out your new car and negotiated the price, you now need to pay for it. Generally, your bank will need the title or vehicle identification number to process the loan. However, if you are securing financing directly through the dealer, you can finalise all the details at the time of purchase. Make sure that you read the small print so that you get a good rate of interest.

Final Tips

Don’t automatically go to purchase a new car as this is inevitably going to be the most expensive option by a long way. If you can, it is better to put down a bigger deposit as you will get a much better loan rate in this way. 

Samantha

Samantha hails from Virginia and is a proud wife to a retired Deputy Sheriff and current plumber. Homeschooling boy mama to two. We homestead and love our pets! A veteran product reviewer; Samantha has been reviewing products for 12 years and offers high quality product reviews with original photography.