“I only want the cheapest car I can buy!” You see this phrase all over the internet. The writer of it often refers to himself as a frugal buyer, and that he will always attempt to get the most for his money. The implication is that you should do it too.
You might have heard people say “all cars depreciate” when referring to buying a new car. And it’s true, they do. A brand new $30k car will be worth around $27k after one year.
Buying a car is an important decision and these days, you have more choices than ever. Whether you’re looking for a fuel-efficient city runabout or a long-distance road tripper capable of hauling the whole family and all their luggage, there’s plenty to choose from in terms of price and features
What should a first time car buyer know?
If you are a first time car buyer then this piece of content is for you. In the upcoming sections, I will share 5 tips that will help first time car buyers to choose a good car for themselves.
Let’s Jump in!
Consider Your Needs
A car is a big purchase that many people don’t take the time to think about. Maybe your reason for buying one has changed recently, or maybe you’re just excited by shiny objects and new adventures!
If this sounds like something on which we could help each other out then feel free to message Approved Auto Loans with any questions – but before doing so remember what type of vehicle suits your needs best (and weather in that region) will also be important factors when considering to buy a car.
Whether you need a car for commuting to work daily (prefer high mileage), just need it on weekends for fun, riding along with family (6 seater) etc.
The first step is to assess your needs and budget for buying the car. For this you can visit a nearby used car dealership and ask them regarding your requirements and budget. They will surely recommend you some best car models and then you can do your own research at home.
Check your Credit Score
The next tip for first time car buyers is to check your credit score before buying the car. Usually people finance their cars from banks or used car dealerships and if they have a good credit score, their chances of getting approved are higher.
A credit score determines the creditworthiness of a person and to boost up this score, you have to pay all your payments on time without getting panelities. A good credit score may range between 700-900 and a bad credit score is lower than 600.
A good credit score also ensures that you will get a car loan at a decent interest rate while if you have bad credit or zero credit score then lenders will charge higher interest rates on your loan or deny your car loan application.
So before applying for a car loan make sure to improve your credit score.
Here are couple of tips to improve your credit score:-
- Pay all your credit card payments on time otherwise you will be charged higher interest rates and the credit card company will penalize you which further lowers your interest rates.
- Live below your means
- Try to add more streams of income.
- Ask your credit card lender to increase your credit limit.
- If you are not able to repay the amount at the end of the month then you can call your credit card company and demand a 15 days extension period.
Consider Hidden Costs
There are many hidden costs of buying a car and some of which you may already take into consideration like gasoline or maintenance. To sum it up here are all the hidden costs of a car that you should consider before buying one:-
- Maintenance and repairs
- Parking fees
- Car insurance
- Car loan monthly payments
- Tickets or panelities.
- Registration fees and licence plate costs.
The rule of thumb is that all the maintenance and repair costs of your car should cover under 10% of your monthly income.
Test Drive the Vehicle
This point is obvious but worth mentioning is to test drive your car before buying it. By test driving you will be able to know the condition of vehicles that are impossible to judge from the outside.
Usually used car dealerships have brilliant used cars and will help you in selecting the best model. Check the brakes, accelerator, lights, wipers, car stereo(head unit, speakers amps, woofers etc), tyres, cigarette port, ac, heat and fan of the car. Ask about the condition of the battery and engine of the car. Check all the dents and scratches on the body of the car as well.
Used car dealerships give warranty on their cars which will ensure that your car is in good condition and they also do all kinds of paperwork. If you are buying from a private seller then you have to make sure that all the accessories and important parts of the car work properly and paperwork is fair.
Look for Vehicle History if You are Buying Used Car
Well you can check the vehicle condition by taking a test drive but you should also check the vehicle history before buying it. Whether the vehicle had met with an accident in the past or had any kind of illegal charges. The vehicle history will help you in avoiding the wrong deal.
The CARFAX history report also highlights the ownership details, service details, odometer reading, title of the car – junk/salvage etc. To get vehicle history you just need a vehicle identification number or VIN. You can check the CARFAX report at websites like iSeeCars.com.or National Insurance Crime Bureau.
What is a good credit score for a first time car buyer?
In the case of a car loan, credit score plays an important role. A good credit score for a first time car buyer will be above 650. A score above this number will qualify you for the approval of a car loan and moreover you will get a loan at a good interest rate. Higher the credit score lower will be the interest rate.
You can check your credit score at creditkarma.ca.