Congratulations! You’ve just graduated college. You landed a great entry level position making a salary of $33k. You live in an apartment with a friend from college. Life is good. You look outside your window and your beat-up old car with nearly 200,000 miles stares back at you. Driving to work every day is risky business as you anticipate the breakdown of your beloved first car from Mom and Dad. Now is the time to think about your first large purchase – a new vehicle. Whether you’re starting a new job or starting a new college class – car buying can be tricky. Before traveling down the road of car buying, safeguard yourself using these tips and tricks!
1. Get pre-qualified.
Now that you’re on your own, more expenses will occur. Know how much you can afford before purchasing a vehicle. Representatives at your local Credit Union can assist you with getting pre-qualified. This gives you an advantage because you know what vehicle you can afford and decreases the chance of overspending on a vehicle. The bigger the down payment the better! Why? This decreases your monthly payment and allows you to budget accordingly. If you do not have enough credit established, you may need a co-signer. A co-signer can be anyone with a good credit score, but typically your parents or other family will be able to sign on the loan. The average car loan is generally five to six years; the longer the loan period, the more you will pay in interest.
2. Prepare yourself and do your homework.
Before walking into a dealership, make sure you are prepared and have an idea of what you can afford and what type of vehicle you need. Do not rely on a salesman to educate you about their business. A salesman wants to make money, not save you money. Vehicles that are reliable, have great gas mileage, and fit into your budget seem like the obvious choice. The internet has an unlimited amount of resources available at your fingertips! Plan ahead before purchasing and take into account your current financial situation. Don’t forget to add in car insurance! Anticipate expenses that will accompany your new vehicle purchase such as: monthly car payment, insurance, gas, and any maintenance fees.
3. Take someone with you.
Just like you wouldn’t jump out of an airplane for the first time solo, it’s wise to take someone with car buying smarts along for your first vehicle purchase. An experienced car buyer can help you avoid the traps first time car buyers fall into.
4. New or used?
Getting pre-qualified will help you determine whether or not you can afford to purchase a new vehicle. A car or truck with some mileage is not a bad decision, especially when purchasing your first vehicle. If you are interested in purchasing a used vehicle, it is wise to take the car or truck to a mechanic for a second opinion. Do your due diligence and make sure you are getting the best deal for your money.
5. Have fun!
Buying a car or truck for the first time may seem like a stressful scenario, but it is an exciting opportunity to learn about an important process and come out with a sweet ride in the end! Do not forget to take your potential new vehicle for a spin! Get behind the wheel and make sure you like the way it drives. There are hundreds and hundreds of vehicles out there, pick the one that’s right for you and won’t break the bank.