There comes a time when every young adult will inevitably have to return their parents’ car keys and decide whether to buy their own set of wheels or not. Whether that time comes in high school, during college or sometime after grad school graduation, there’s no doubt that eventually you’ll need to think about buying a car of your own before you start your career. But how do you go about buying your first car when your future seems uncertain and your current cash flow may be lower than you’d like? Keep reading to find out what you should consider before buying your first car.
- Cash flow. Your financial situation can play a big part in what kind of car you can afford. Are you a full-time student living off of a stipend from your parents? Or, do you have a job that can help you pay for your new car purchase? Depending on what your financial situation, you may be able to set a realistic car buying budget with that income information.
- Condition. Before you go car shopping, you should consider what condition of car you can afford. For example, you may have your eye on a new car, but a gently used pre-owned car would likely be more affordable.
- Credit. A good credit score goes a long way in securing an attractive interest rate, and may even be a good bargaining tool when negotiating the price of a car. However, if you have little or no credit, you may either need a co-signer to make a car purchase or you’ll need to build some good credit before you try to get financing for a car loan.
- Coverage. Even before you drive your new vehicle off the dealer’s lot, you’ll want to check and make sure that you have the car insurance coverage you need to keep you protected. Having an insurance plan can ensure your safety in case anything happens during your travels on the road. Even if you can’t afford comprehensive coverage, make sure you understand your options and choose the plan that fits your needs best, as well as what kind of insurance is required in your state.
- Cash or loan. One of the most important factors to consider when buying a car is how you will pay for it. Whether you’ve saved up enough cash, or are researching your options when it comes to auto loans, make sure you do your homework in order to find the right borrowing solution for you. Also make sure that you are able to pay you monthly payments if you get a loan in order to avoid getting a bad credit score.
Buying your first car is an exciting step into adulthood. So whether you’ve just started the search for a car of your own or are trying to find the financing you need to make the purchase a reality, you’re sure to find what you’re looking for with a little bit of research. Also, if you’re trying to find a way to save money on a car you recently bought, auto refinance loans can help you make the most of the money you work hard for by reducing your interest rate or the overall amount of interest you pay over the life of the loan.
Editor’s Note: Thank you for the guest post. I wish I had taken more time to think about what kind of car I could truly afford when I bought my current car. How was your experience buying your first car? And what were the costs that accompanied it? Are there any tips and advice you can share when looking for a car?