How to Shop For Your First Car

shopping Image courtesy of JeffK

For most Americans the purchase of a first vehicle is a rite of passage, the first step on the road to the American Dream.  Some people choose to buy a vehicle from a relative or accept a hand me down, but that is not what we are discussing.  We are discussing the very first automobile purchase you will ever make, as that is the first true step on your own to claiming your own slice of the American Pie.

Step One: Do Your Homework and Be Patient

Remember that auto loans last a long time, so you want to be sure that the vehicle(s) you are considering are going to meet your immediate needs and those that you are likely to have by the time that the loan is over.  The flip-side of that particular coin is that you do not want to buy more vehicle than you will need.  For example, that Dodge 3500 HD pickup looks boss without a doubt, but unless you’re going to be routinely towing 20,000 pounds it is probably seriously overkill.   On the opposite site, that 1500 two-door pickup is a steal, but you might want even minimal back seats at some point in the next 5-6 years.  Who knows what you might be doing by then.

The point is that you want to do your homework.  This means knowing what you want and need as well as how different vehicles meet those needs.  One underrated need is reliability, so be sure to check out different publications that compare long-term usage and report candid experiences such as repair bills and quirks.

Step Two: Find the Right Car

Once you know what you want, it is time to go shopping.  Be sure to leverage the power of the Internet to shop for vehicles nationwide.  Remember to have a qualified mechanic look at the vehicle and consider affordable transportation companies rather than flying out to pick up a new vehicle and drive it cross country.  Being caught halfway between there and home is not how you want to discover some sort of mechanical defect, but those should not crop up if you hired a competent inspector to evaluate the vehicle.

Step Three: Credit Building or Repair

If you are a first time car buyer looking for a loan then you want to have some credit history, preferably good in nature.  There are several web pages that dedicate themselves to providing timely and up to date information, and you should spend at least a few minutes checking out the basics of credit and then put some of the ideas into motion.  A few months of credit building can be the difference between being approved and able to afford a car you really like or having to settle for something less.  Keep in mind that you will be settling for a substantial down payment and probably a few years-worth of three-figure payments, so you want to be sure that what you are getting is worth it.  If not, you are likely to regret the decision down the road, and again at the next payment, and again at the next, and so and so forth up until the time you can finally sell your ‘settled on’ vehicle for less than what the vehicle you really would have wanted would have sold for.

Step Four: Find the Right Lender and Loan

After making sure that you are as credit worthy as you can be, be sure to shop as many lenders as possible.  Again, homework will pay off so be sure to understand the rates, fees, and rights of both parties entering into the agreement.  Understanding options like paying the vehicle down in advance may also be worth looking into as they could become a reality as your financial situation improves.  For example, if you pay an extra $25 a month will your monthly payments go down or will the final payment date and amount simple come closer and/or decrease?

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