First-Time Car Buyers: What You Need to Know

Purchasing your first car can be both exciting and stressful at the same time. Whether or not you’re tossing aside a hand-me-down, buying a vehicle is an important and costly decision to make. That’s why you need to plan ahead before you commit to anything lest you make a very expensive mistake. These tips will help you get the vehicle you want at a price point that’s worth it.

Look into buying a used car

Always remember that a car isn’t a good investment. Cars depreciate in value as soon as you take it out on the road. You can expect a new vehicle to quickly decrease in value as soon as you take ownership of it. Generally, new cars decrease in value by 25% in the first year of ownership alone. The smartest thing to do when buying your first car is to hit up car dealerships near you in Tulsa and invest instead in a slightly used vehicle that is at most a year or two old. Most people used to buy new cars for the insurance alone, but most car dealerships today can offer you lengthy insurance periods for half the price.

Explore different financing and purchasing options

Not everyone can save up enough money to buy a car with just cash. Most people need to finance their purchase using an auto loan. You can apply for financing through an auto dealership or a bank or credit union. Auto dealers usually put on additional handling fees for the loan, so you might be better off seeking help from a bank or credit union.

Take into consideration other costs

The actual cost of a car is not the only thing you’ll be paying for. There are also long-term maintenance and insurance costs that come with the vehicle itself. Car insurance premiums usually increase according to the value of a vehicle, so buying a more expensive car will significantly raise the price of your annual insurance costs. You can expect to spend thousands of dollars or more each year. Besides this, you need to consider maintenance costs. Cars need a regular change of oil, brakes, tires, and filters, on top of gas consumption costs. Luxury car parts usually cost a lot more than the usual standard replacement parts.

Think about your budget

Before you can even think about what car you should get, you need to think about how much you can afford to spend. Saving money can reduce the loan amount you’ll need to borrow for a car. You should also be thinking about how much you can afford to spend each month on your car loan payments. You can figure out a budget by calculating your monthly income, living expenses, and the costs of ownership. Creating a budget that’s reasonable for you is the best way to purchase a car that’s within your means.

Save for a down payment

Car salesman and client

Before you apply for a loan, you’ll need to set aside money for a down payment. Most lenders will ask for a 20% down payment of the car’s price. If you’re purchasing a car from a dealership, you might be required to put only a 10% down payment.

Make the smartest and most financially sound decision when purchasing your very first car with these practical tips.