Purchasing a car, while not a great long-term investment, is certainly an important short term investment. It needs to be done with patience, due diligence and future maintenance and usage costs in mind. If you’ve never purchased a car before it can be a little daunting too so, nice folks that we are, we put together a blog with some excellent car buying tips for first-time car buyers. Enjoy.
One of the first things you need to consider if you’re buying a car for the first time is whether you’re going to finance it or pay for it in cash. Both have their positive and negative sides. For example, a new car loses about 25% of its retail value as soon as you drive it off the lot, but being approved for a car loan (and paying the loan off on time, of course) can build your credit history.
That being said, if you have the cash to pay the car completely or pay off a large chunk of it your monthly car loan expense will be much smaller and easier to swallow.
Remember that you don’t have to get financing from a dealership but can apply for it at your local bank. Even if you are buying a used car you can sometimes qualify for a loan at your bank and many times the interest rates that they offer will be better than any dealer’s rates.
Would you buy clothing or electronics without taking a look at them first and making sure that they fit right and worked correctly? Probably not, so why would you consider buying a car without having it inspected first? You shouldn’t and, since a car can appear perfectly normal on the outside but have severe mechanical problems hidden on the inside, getting any used car inspected before you purchase it is absolutely vital.
While we realize that younger people prefer sporty cars with stronger engines and rear wheel drive the fact is that these cars are much more difficult to drive in hazardous weather conditions like rain and snow. It is for that reason that you should seriously consider purchasing a front wheel drive automobile for your first car because you’re probably still learning how to drive and it will be safer.
As far as warranties are concerned, if you’re purchasing a used car that has less than 60,000 miles the original manufacturer’s warranty will still be in effect. If the car you are considering has more than 60,000 miles you may want to purchase an extended warranty but keep in mind that that’s going to cost quite a bit of extra money.
One item that many new car or first-time car buyers forget is what affect their car purchase will have on their automobile insurance costs. Generally speaking a new car will cost more to ensure, especially since you have to have full coverage on it. Your best bet would be to check with your insurance company before purchasing any car to find out what your approximate cost per month will be to insure it.
Finally, with gas prices going through the roof you would do well to know exactly what type of mileage your car is going to get, whether new or used. This can have a huge effect on your monthly bills, especially if the car you purchase gets lousy mileage, so make sure you do your homework.
No matter what you buy best of luck in your search and with your new automobile. Make sure to drive back here to our website on a regular basis for more excellent tips on all sorts of financial topics. See you then.