How to buy your first car Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make better financial decisions by offering interactive tools and financial calculators that provide objective and unique content. This allows you to conduct your own research and compare information at no cost and help you make sound financial decisions. Bankrate has partnerships with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The deals that are displayed on this site come from companies that pay us. This compensation could affect how and where products appear on this site, including such things as the order in which they may appear in the listing categories and other categories, unless prohibited by law for our mortgage, home equity and other home loan products. This compensation, however, does affect the information we publish, or the reviews that you read on this site. We do not contain the entire universe of businesses or financial deals that could be accessible to you. FG Trade/Getty Images
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Authored by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers to navigate the ins and outs of securely borrowing money to buy an automobile. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping readers gain confidence to manage their finances through providing clear, well-researched information that dissects complicated subjects into bite-sized pieces. The Bankrate promises
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who ensure everything we publish will ensure that our content is reliable, honest and trustworthy. The loans journalists and editors concentrate on the things that consumers are interested about most -- the different types of lending options and the most competitive rates, the top lenders, how to repay debt, and many more -- so you'll feel safe investing your money. Editorial integrity
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You have money questions. Bankrate can help. Our experts have helped you understand your finances for over four decades. We continually strive to provide consumers with the expert advice and tools required to be successful throughout their financial journey. Bankrate adheres to strict standards , so you can trust that our information is trustworthy and reliable. Our award-winning editors and reporters produce honest and reliable content that will help you make the right financial decisions. Our content produced by our editorial staff is factual, objective and uninfluenced through our sponsors. We're transparent about the ways we're in a position to provide quality content, competitive rates, and useful tools for you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for placement of sponsored products and, services, or through you clicking specific links on our website. This compensation could impact how, where and when the products are listed within categories, unless prohibited by law for our mortgage home equity, mortgage and other home loan products. Other elements, such as our own proprietary website rules and whether a product is available within your area or at your self-selected credit score range can also impact the manner in which products are featured on this site. We strive to offer a wide range offers, Bankrate does not include specific information on every credit or financial products or services. The average monthly payment for a used car was $526 in the fourth quarter of 2022 and the newer cars were more expensive at $716, according to . As a first-time buyer, these numbers could be intimidating, and more overwhelming when you aren't experienced about the process. But confidence is all about preparation, so make sure you take time prior to going to the internet or to a dealer to know the essential steps to take when you are buying your first car. 1. Find out how much you can afford The key to a successful buy is to determine first . your credit scores, your monthly income, and the kind of car you'd like to purchase should all factor into the decision. It is important to strike a balance between your budget and finding a car right for your requirements. When determining your budget, consider the whole picture, not just the price is advertised. The real price you pay out the door is the total cost you will be expected to pay, which includes taxes and dealer fees. When you've got that number or a reasonable estimate, take into account your salary average and make use of a , which will aid you in determining what your monthly cost to finance the car will be. Tips from Bankrate
Car ownership has its own costs, the responsibility of paying for it, so make sure that you've got room in your budget for additional costs.
2. Reserve money for a down payment the price of your new car is the initial lump sum that you'll pay. Make sure you cover at minimum 20% of the cost of purchase, that could take a while. Saving up to purchase a car is probably beneficial if you are able to put off purchasing a car until you've got the money. It will save you more money in the long run and reduce your monthly costs. If you are unable to wait, you can make the lower down payment. However, you may not receive a fair rate with your lender. In this instance, think about the option of a cheaper vehicle. The lower your overall cost and the lower your monthly expenses, the less you'll have to put aside for a downpayment. 3. Take a look at your credit history If this vehicle is your first major investment in a financial institution, it's likely to be that you do not have a lengthy credit history. If this is the case, you should check your credit score to see what loan options are available. Credit scores are the primary factor that lenders use to determine the rates of interest they will offer. The higher your credit score will be, the better the interest rate you will receive. Verify your credit score prior to making contact with a potential dealer. It is possible to do this online through or for free at . It's best to get your credit in good condition prior to applying for financing for a vehicle in the event that you are eligible. 4. Find the best car for you Choosing which vehicle is the best fit for your needs requires much more than just color or style. Also, consider other aspects for instance, the car's longevity as well as its size and capacity for your requirements, the latest technology and safety features, as well as gas mileage , and the climate in which you reside. Take a look at these figures -- and extra information about the price the car you're interested in sells for. This is also an excellent time to consider whether you'd like to purchase a . While a new car is exciting, certified pre-owned (CPO) could offer an affordable price and still offer new features and a warranty from the manufacturer. If you're not forced to take the car out as soon as possible it is possible to save money by waiting for . 5. Get prequalified for financing after you gather some information on the kind of car you'd like to purchase as well as your financial background, apply with lenders that offer prequalification. This is crucial to saving money and putting you in control when it comes to selecting the most suitable financing option. Prequalification differs from full approval, so even after the prequalification process closes, it's still not a complete agreement. Preapproval, however, will provide you with an idea of potential rates and conditions. You will still have to submit an application form, but you will know of whether you're able to pay for it ahead of time. The following information is required in order to be prequalified: Average income and finances. Personal information. Information about employment. Any current debt. 6. Go to the dealershipeither in person or on the internet. After prequalifying for a loan and setting your sights on your dream car It is now time to start the purchasing process. It is recommended look up the types of cars available in your area. The majority of dealers have their inventory listed on their websites. They also let you schedule appointments. It is crucial to sit behind the wheel of your potential vehicle and take it for an initial test drive prior to making a purchase. Be sure to adjust the seat, and determine the space in your garage and can handle your day-to-day routine. You aren't limited to the dealers local to you. Online dealers like Carvana, TrueCar and Vroom offer access to the entire inventory of used vehicles. You can browse and get financing from the comfort of your home, and when you pick the car you want, you can get up to a week to test the car before you buy it . 7. Negotiate Negotiation isn't easy, however, getting the best deal is from standing up for yourself. Come prepared with any paperwork needed, a thorough knowledge of your credit history and to ask. But the bottom line is: be ready to walk away if you can't get the deal you deserve. If the time is right to conclude the deal, stay steadfast in your commitment to the agreed-upon number. You can expect the dealer to press for . Don't accept options such as paint protection or fabric, while an extra option such as gap insurance could be more appropriate. Next steps Negotiation can feel daunting However, getting the best deal boils from being a strong advocate for yourself. Be prepared with all the paperwork required, a clear knowledge of your credit history and ask questions. Concentrate on the price of the purchase, not the monthly payment. And be prepared to leave if you can't get the deal you're looking for. When it's time to close the deal be firm on the agreed-upon number. The dealer is likely to push for . Don't be averse to options such as paint protection or fabric, when an add-on like gap insurance may be more useful. Find out more
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Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ways and pitfalls of borrowing money to purchase a car. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain confidence to take control of their finances by providing concise, well-researched, and clear facts that break down complex subjects into bite-sized pieces.
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