According to recent studies, the average cost of a new car is now over $30,000. And if you’re financing that purchase, you can expect to pay around $500 per month for the next five years. That’s a lot of money! So before you head to the dealership, you should take some time to figure out how much you can afford to spend.
If you’re keen on buying a new car, there are some things you need to do to make sure you’re getting the best deal possible. Here are 10 things you need to know before buying your first car:
- Know your budget
The first step is to figure out how much you can afford to spend on a car. Keep in mind that you’ll also need to factor in the cost of auto insurance, gas, and maintenance. Once you’ve calculated your monthly budget, you can start shopping for cars that fall within your price range.
- Do your research
Before you start looking at cars, it’s important to do your research. This means understanding what features you want and need, as well as learning about different makes and models. Doing the research upfront will save you time and money in the long run. So take the time to read some reviews and compare prices before you start shopping.
- Get pre-approved for a loan
If you’re planning on financing your car, it’s a good idea to get pre-approved for a loan before you start shopping. Financing through the dealership can often be more expensive, so it’s best to get your loan lined up beforehand. You can shop around at different banks and credit unions to compare interest rates on auto loans.
- Consider leasing
Leasing is another option to consider if you’re not sure you want to commit to buying a car outright. With a lease, you make monthly payments for the use of the car but don’t technically own it. At the end of the lease period, you can either buy the car or return it to the dealership.
- Look for rebates and incentives
When you’re car shopping, be sure to look for any rebates or incentives that might be available. These can help offset the cost of your purchase and make it more affordable. For example, many manufacturers offer cash-back rebates for buyers who finance through their dealerships.
- Take a test drive
Once you’ve found a few cars that you’re interested in, it’s time to take them for a test drive. This will help you get a feel for the car and see how it handles on the road. It’s also a good opportunity to ask any questions you might have about the car. When you’re test driving, be sure to pay attention to things like the feel of the steering wheel, the placement of the controls, and blind spots.
- Have a realistic idea of your trade-in value
If you’re planning on trading in your old car, it’s important to have a realistic idea of its trade-in value. This will help you negotiate a fair price for your new car. You can get an estimate of your trade-in value by checking online resources like Kelley Blue Book or Edmunds.
- Get a vehicle history report
If you’re buying a used car, it’s important to get a vehicle history report (VHR). This report will tell you if the car has been in any accidents or had any major mechanical issues. You can usually get a VHR from the dealership, but you can also order one online.
- Consider gap insurance
If you’re financing your car, you might want to consider gap insurance. This type of insurance covers the difference between what you owe on your loan and the car’s actual cash value in the event that it’s totaled in an accident. So if you have a loan with a high-interest rate, gap insurance can protect you from having to pay out of pocket for the remainder of the loan.
- Have realistic expectations
Finally, it’s important to have realistic expectations when buying your first car. It’s unlikely that you’ll find the perfect car on your first try, so be prepared to compromise on some of your wants and needs. And don’t forget that a car is a big financial responsibility, so make sure you’re prepared to budget for things like auto insurance, gas, and maintenance.
Following these tips will help you navigate the car-buying process and find the right car for your needs. So take your time, do your research, and be prepared to negotiate. With a little patience, you’ll be driving off in your new set of wheels in no time!