Buying your first car can be exciting, but there’s a lot to consider. Planning ahead can help make the process easier and help ensure you get the car that’s right for you. Here are some important points to keep in mind as you start looking for your first car.
1 Be realistic about your needs
Do you need a car to get to class or work each day, or just for weekend adventures? What is the weather like where you live: does it snow, rain or is it hot? Evaluate your lifestyle and the driving conditions you face most often. Do your research: Learn about features and options, and how they can affect a car’s price.
Consider your budget and financing
Also, take a realistic look at your finances. That not only includes the purchase price but budgeting for the use and care of your future car from faragomotors.net, including maintenance, insurance, gas, repairs and parking. Learn more about the true cost of owning a car.
A down payment is usually not required for your loan, but giving one is a good idea: you won’t have to borrow a large amount, and your monthly payment will be lower. (In general, for every $1,000 you put down, your monthly car payment drops by $15 to $18, according to Edmunds data from November 2017.) Use Bank of America’s auto loan calculator to learn how a down payment can affect your monthly auto loan payment.
3 explore your options
Buying your first car is much easier than it was for your parents. The Internet offers a large number of sellers beyond your local area (who can ship cars to your area, but for a fee), which can mean more options within your price range. You can search and narrow your choices by viewing online car ratings in safety or car type categories (such as SUVs, hybrids). Learn more about how to buy, and even refinance, a car online.
For new cars, ask multiple dealers for price quotes. If you’re looking for used cars, be sure to ask about a Carfax report, which offers a used car’s history, including any accidents.
4 Know your credit score
Your credit score helps determine the interest rate you pay on an auto loan. Better credit can help you get a more favorable interest rate, which in turn will affect your overall car budget. You can also get your credit score for free through your credit card provider.
Check your credit report before you’re ready to buy so you have time to improve your credit score. Visit AnnualCreditReport.com to get a free copy of your credit report from each of the three major credit bureaus (Experian, Equifax and TransUnion).
5 apply for a loan
Although it may seem counterintuitive to look for a car loan before buying one, it can be helpful. It gives you an idea of how much you can borrow (and at what interest rate), which means you don’t have to make hasty financial decisions at the dealership. Start with your bank or credit union, then get quotes from other lenders to make sure you get the best rate. Learn more about Bank of America’s online resources for buying a car (only offered in English).
6 Take a test drive
Once you identify a few cars that might fit your needs and budget, drive each car to find out if you like it and to assess its performance. Try to drive all the cars you’re considering on the same day, so you’ll be able to compare them more easily. It’s a good idea to call ahead for appointments to plan for the day, and it helps you gauge the customer service at each dealership.
7 close the deal
You’ve done the research, you know what you want, and you’ve got the financing ready. At the time of closing the deal you are in control, and can focus on reading the contract carefully. However, before you sign, make sure you understand the terms of any financing or warranty agreement.
After you drive out, make sure you don’t miss a single payment by signing up for automatic bill payments so you can focus on your next destination.