How to buy your first car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by providing you with interactive tools and financial calculators that provide objective and unique content, by enabling you to conduct your own research and compare information at no cost to help you make informed financial decisions. Bankrate has agreements with issuers, including but not restricted to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn money The products that are advertised on this website are provided by companies that pay us. This compensation can affect the way and where products appear on the site, such as, for example, the order in which they appear within the listing categories, except where prohibited by law. This applies to our mortgage home equity, mortgage and other home loan products. But this compensation does affect the information we provide, or the reviews appear on this website. We do not contain the vast array of companies or financial offerings that might be open to you. FG Trade/Getty Images
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Writer: Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the ins and outs of securely borrowing money to buy an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping readers gain confidence to manage their finances by providing clear, well-researched information that dissects complicated subjects into bite-sized pieces. The Bankrate promises
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There are money-related questions. Bankrate has answers. Our experts have been helping you manage your money for over four decades. We continually strive to give our customers the right guidance and the tools necessary to make it through life’s financial journey. Bankrate adheres to a strict code of conduct , so you can trust that our information is trustworthy and reliable. Our award-winning editors and reporters produce honest and reliable information to assist you in making the right financial decisions. Our content produced by our editorial team is objective, factual and is not influenced from our advertising. We’re transparent about how we are capable of bringing high-quality content, competitive rates, and helpful tools to you , by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We receive compensation for placement of sponsored products and services or by you clicking on specific links on our website. This compensation could affect the way, location and when products appear within listing categories, with the exception of those the law prohibits it 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 manner in which products are featured on this site. We strive to offer the most diverse selection of products, Bankrate does not include details about every financial or credit product or service. The median monthly cost for a used vehicle is $526 for the 4th quarter in 2022 and brand new vehicles were higher at $716 according to . For a new buyer, numbers this steep can be daunting and more overwhelming when you aren’t familiar with the process. However, confidence is made of preparation. So make sure you take the time before heading to the internet or to a dealer to know the essential actions to follow when purchasing your first automobile. 1. Find out how much you can afford The key to a successful buy is to determine first . Your credit score, monthly income and the type of car you’d like to purchase must all be taken into consideration when making this decision. It is important to strike a balance between your budget and finding a car right for your requirements. When determining your budget, consider the , not just the price on the sticker that you see advertised. The true out-the-door price is the total amount you will be expected to pay, including tax and dealer charges. When you’ve got that number — or a suitable estimate, you can factor in your salary average and use an, which can help you determine what the monthly cost of financing the vehicle will be. Tips from Bankrate
Car ownership is a major expense, so be sure you’ve got room 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 least 20% of the purchase price which could take some time. Being patient and saving up for a is likely beneficial if you are able to delay getting a car until you’ve got the money. This will help you save cash in the end and decrease the monthly cost. If you can’t wait, you can make a lower down payment. But, you might not receive a fair rate with your lender. If this is the case, you should consider a less pricey vehicle instead. The lower the price overall and the lower your monthly expenses, the less you’ll have to put aside for a down payment. 3. Check your credit score If this vehicle is your first major purchase, it’s likely there isn’t a long credit history. If this is the case, look over your credit history to determine which loan alternatives are available. The credit score of yours is the primary factor that lenders use to determine the rates of interest you can expect to receive. The higher your credit score is, the better your interest rate will be. Check your credit score before meeting with a dealer. You can do it online or free at . It is worth waiting to get your credit in order before applying for car financing If you are able to. 4. Decide what car is right for you. Choosing the vehicle that is best for you takes many more factors than just style or color. Also, consider other aspects such as the vehicle’s durability and size to meet your requirements, technological features and safety features, as well as gas mileage and the climate where you live. Check out and for these stats — and extra information about how much the car you’re looking at is sold for. This is also a good time to consider whether you want a . While a brand new car can be an exciting option, certified used (CPO) will give you an affordable price but still come with the latest features, as well as warranty from the manufacturer. If you’re not in a hurry to drive in the shortest time possible it is possible to save money by waiting for . 5. Get prequalified for financing after you’ve gathered information about the kind of car you’d like to purchase as well as your financial situation, you can look for lenders that provide prequalification. This is essential to save money as well as putting you in charge when it comes to selecting the most appropriate financing option. Prequalification differs from full approval, and so even after the prequalification process closes, it’s still not a final deal. Preapproval, however, will give you an idea of possible rates and conditions. You will still have to submit an application in a formal manner however, you’ll know of whether you’re able to pay for it ahead of time. The following are required in order to be prequalified: Average income and finances. Personal information. Employment information. Any current debt. 6. Visit the dealer- in person or online After prequalifying for a loan and selecting your dream car now is the time to begin the car purchasing process. Ideally, you should check out the available vehicles available in your area. The majority of dealers will list their inventory on their websites and permit you to schedule appointments. It is crucial to take the steering wheel of your prospective car and take it on an initial test drive prior to making a purchase. Be sure to adjust the seat, and determine the space into your garage and is able to be used for your day-to-day activities. But you are not limited to dealers that are local to you. Online dealers like Carvana, TrueCar and Vroom offer access to a nationwide inventory of pre-owned cars. You can look through and obtain financing at home, and when you pick a car, you get up to a week to test the car before you buy it . 7. Negotiate Negotiation may be intimidating however, finding the most favorable deal comes in the form of taking a stand for yourself. Come prepared with any paperwork required, a clear knowledge of your credit score and be prepared to inquire. But the most important thing to remember is this: be prepared to walk away if you can’t get the deal you deserve. When the time has come to close the deal, be firm on the deal’s agreed-upon amount. The dealer is likely to insist on . Say no to options like paint protection or fabric while an extra option such as gap insurance might be more useful. Next steps Negotiation can feel difficult, but getting the best deal boils down to taking a stand for yourself. Be prepared with all the paperwork needed, a firm knowledge of your credit history and be prepared to inquire. Concentrate on the price of the purchase, not the monthly payment. Be prepared to walk away if can’t get the deal you’re entitled to. When it’s time to close the deal remain steadfast on the agreed-upon number. You can expect the dealer to press for . Do not accept options like paint protection or fabric when an add-on like gap insurance might be more appropriate. Find out more
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Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ins and outs of securely taking out loans to purchase an automobile. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since the end of 2021. They are passionate about helping readers gain the confidence to control their finances with precise, well-researched and well-researched details that cut otherwise complex subjects into bite-sized pieces.
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