You could be a recent graduate with a new, properly-paying job or just someone with a bit of money and you feel like it’s time to get a new car. The first time is significant because it shapes your experience with car-buying, possibly forever. Buying your first car and doing it properly is a mean task.
To that end, it would be great if you could simply pay the price that the dealer quotes, but few people are in a position to do something like that. And with that in mind, here are five quick tips on how to afford that crucial first car
Establish a realistic budget
The first step towards any big purchase is going to be preparing a realistic budget. The total amount you will pay primarily depends on the amount of money you are willing to spend every month.
As mentioned before, it’s ideal to pay for your car in cash, but, often the nature of the transaction calls for leveraging a financing option. This comes out of your budget, so consider how much you currently spend every month on important areas like food, your house and insurance. Once those are paid off, take a look at how much you can spare for car payments.
Know your credit rating
Before even considering financing options, you have to find out what your credit score is. Most people don’t understand the wide implications of credit card ratings. The rating plays a big role in the amount of financing you get, the repayment period and the amount you get.
Knowing your credit rating puts you at an advantage because you know where you stand. There are three major companies in the US, and, by law, every individual is entitled to at least one credit report every year.
If anything seems off with the credit report, contact the issuing agency to correct the matter. It’s helpful to know, however, that allow credit rating shouldn’t lock you out of the car markets. Buy Here Pay Here Car Dealers specialize with such cases as they have offers that irresistible.
Search for a source of funding wisely
Looking for the right financer can be quite a bit of legwork, but in the long run, it will be largely beneficial. Finding them might put you in a stronger position overall when it comes to negotiating the price of the vehicle.
The secret is to check in with lots of dealerships around your area to find out what their rates are on auto loans. It would also help if you were aware of promotional rates that may currently be around a given time.
Decide the loan repayment period
The average length of an auto loan in the US is about five to six years. Depending on the financing company you are dealing with, financing periods can be much longer. Do note that when dealing with loans, you should try and shorten the repayment period rather than lengthen it.
A longer repayment period puts less stress on you over a short period and the chance to default on payment becomes less. Over a long period of time, it will cost you more, but there’s the peace of mind that comes with it. Here, the importance of your credit rating begins to show. Many manufacturers offer special zero-interest loans to qualified buyers with short repayment periods.
Factor in all the costs involved in the purchase
What gets first-time buyers is the hidden costs they did not anticipate with the first purchase. Things like insurance, maintenance costs, licensing fees and fuel costs should have a place in your decision-making process. Before buying a car, try and project the additional expenses you are likely to incur. You will encounter less surprises that way.