I can easily recall when I started looking to buy my very first car. I had been able to use my parents’ cars while growing up. Now, I was home from college and working full-time as a nanny and ready to buy a car for myself. It’s an overwhelming journey trying to navigate buying a car for the first time and everything that goes with that.
My dad took me to a car shop that a friend of his operated. We looked around and I was able to find a decently priced used Hyundai Elantra. It wasn’t a fancy car, it didn’t have all of the bells and whistles, but the mileage was decent for the price out the door of $6,500. I was 20 at the time and single, so even that felt like a large amount of money to plan ahead and budget for.
I remember sitting down in the grungy sales office signing what felt like a stack of 100-papers including an agreement for a payment plan. With the car shop belonging to our family friend and the loan value being pretty small, I was able to set up payments over a 12-month period and avoid a hefty interest rate. That did mean pretty big payments and a big commitment, but I had minimal bills and expenses with my current job.
I don’t know how I ever would have made it past a traditional car sales lot with pushy salesmen that try to add on service packages and upgrades at every corner. My dad was absolutely key in helping me start off on a good financial path by choosing an older, used car that may have lacked in sporty appeal but would definitely serve my purposes well as a young adult. The whole process started me on a path towards independence and responsibility that moved me out of needing to depend on my parents for everything that I had.
Buying Your First Car Tips
Save Cash – When at all possible, save up cash monthly ahead of time before heading out to shop for your first car. Setting a goal and saving for it before you start to shop will help you get the car you want without going into debt or worrying about a monthly payment plan that continues regardless of your circumstances which may change without notice. Even if you can save the entire amount you need to purchase a car, plan to save a good lump sum as a deposit to lower payments and ensure a lower interest rate.
Evaluate Your Budget – Carefully look at what your income versus expenses are and how much you have available in your budget towards a car each month. Stay comfortably below that number when looking for a car with payment plans. Try to find a car that you can pay off in just a few years, avoid a 5 or 6 year loan when possible. Don’t forget to consider insurance, annual licensing, and repairs that come with owning a car when planning your budget.
Buy Used – A first car doesn’t need to be top-of-the-line. Look for a reliable car around 70-80k miles that is 4-5 years old. This type of car will usually last you a good 4-5 years with no major problems and will be past the majority of the value loss over the time you own the car that comes with a new car.
Test Drive & Inspection – Taking the car for a quick test drive can usually alert you to any serious problems that car may have. Evaluate the tires, interior, and any service reports the owner may have available to know what you are purchasing. You can also take the car in for a quick inspection at a repair shop to look for any major problems before your purchase.
Bring Help – Take a family member or good friend along with you when you start shopping for your first vehicle and let them help you evaluate the options and be there to support you through the process. Sometimes, just having someone to chat through the options can help you avoid tricky sales pitches or cars that may not be the best fit for you long-term.
Most importantly, don’t rush the decision. When you’ve stopped into a car lot or looked at a few local listings of cars for sale, don’t feel like you have to decide right then or you’ll lose out. There will always be another car for sale, so don’t rush the purchase. Take a night to think it over so you can feel confident in your decision and this big first purchase you are making.
What advice do you give those shopping for their first car?
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Disclosure: Compensation was provided by State Farm via Mode Media. The opinions expressed herein are those of the author and are not indicative of the opinions or positions of State Farm.
Wednesday 20th of August 2014
Thanks for these tips! I agree that the most important tip is that you don’t rush the decision. I've been guilty of just settling for a car because I hated the hassle of dealing with the sales people.
Wednesday 20th of August 2014
These are some really good tips that I will have to pass on to my younger sisters.