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 research and compare information at no cost and help you make sound financial decisions. Bankrate has agreements with issuers including, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are displayed on this website are provided by companies that compensate us. This compensation may impact how and where products appear on this website, for example, for example, the sequence in which they be listed within the categories of listing, except where prohibited by law. Our mortgage, home equity and other home loan products. However, this compensation will affect the information we publish, or the reviews appear on this website. We do not include the universe of companies or financial offers that may be open to you. FG Trade/Getty Images
4 minutes read. Published March 02, 2023
Written by Rebecca Betterton Written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in helping readers with the ways and pitfalls of borrowing money to purchase an automobile. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping readers gain confidence to take control of their finances by providing precise, well-studied and well-researched data that reduces complex topics into manageable bites. The Bankrate guarantee
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Car ownership is a major expense, so be sure you’ve got room in your budget to cover any extra expenses.
2. Reserve money for a down payment the price of your new car is the initial lump sum that you’ll pay. Try to pay at least 20% of the purchase price, which could take some time. Being patient and saving up to purchase a car is probably worth it if you hold off buying an automobile until you’ve got the money. This will help you save cash in the end and decrease the cost of your monthly expenses. If you can’t wait, you can make an easier down payment. But, you might not be able to get a favorable rate with your lender. In this case, consider a less pricey vehicle instead. The lower the price overall it is the less you have to pay for a down payment. 3. Take a look at your credit report If this vehicle is your first large financial investment, it is likely to be that you do not have an extensive credit history. If this is the case, look over your credit history to find out which loan options are available. Credit scores are the main factor that lenders use to determine the interest rates that you will be offered. The higher your credit score will be, the better your interest rate will be. Make sure you know your credit score prior to meeting with a dealer. You can do so online through or for free at . It’s worth it to get your credit in good condition before applying for vehicle financing If you are able to. 4. Find the best car for you Choosing which vehicle is right for you requires a lot more consideration than just style or color. Consider other factors, such as the vehicle’s durability, size for your needs, technology, safety features, gas mileage , and the climate in which you reside. Check out and for these figures as well as additional information about the price the car you’re interested in is sold for. It is also a good moment to decide if you’d like to purchase to purchase a . While a brand new car can be thrilling, certified pre-owned (CPO) will give you the lowest price, while still boasting modern features as well as a manufacturer-backed warranty. And if you aren’t forced to take the car out whenever you can, you can 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, make an application to lenders who offer prequalification. This step is vital to saving money and putting you in charge when it comes to choosing the most appropriate financing option. Prequalification is different from full approval. Therefore, even after the prequalification process ends, it’s not a final deal. Preapproval, however, will provide you with an idea of the potential costs and terms. You’ll still need to fill out a formal application after the preapproval, but you’ll have an idea of whether you’re able to pay for the application before the deadline. You will need the following in order to be prequalified your finances and income. Personal information. Information about employment. Any current debt. 6. Go to the dealershipeither in person or on the internet. After prequalifying for an loan and setting your sights on the vehicle of your dreams It is now time to begin the buying process. It is recommended look up the types of cars available in your region. Most dealers list their inventory on their websites. They also permit you to schedule appointments. It is essential to get behind the wheel of the potential car and take it on an inspection before you buy. Be sure to adjust the seat, and determine if it fits in your garage and can handle your day-to-day routine. However, you’re not restricted to local dealers near you. Online dealers such as Carvana, TrueCar and Vroom give you access to a national inventory of used cars. 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 seven days to test the car before you buy it . 7. Negotiate Negotiation can feel intimidating however, getting the best deal boils down to taking a stand for yourself. Bring any documents required, a clear knowledge of your credit history and be prepared to inquire. But the bottom line is this: be prepared to walk away if you can’t obtain the credit you are due. When the time has come to close the deal stay steadfast in your commitment to the number you agreed to. You can expect the dealer to press for . Do not accept alternatives like fabric or paint protection when an add-on like gap insurance might be more useful. The next steps to negotiate can be daunting But getting the best deal comes from taking a stand for yourself. Be prepared with all the paperwork required, as well as a thorough understanding of your credit history and be prepared to inquire. Focus on the purchase price and not on the monthly installment. Also, be ready to walk away if you aren’t able to get the deal you deserve. When it’s time to close the deal, remain steadfast on the agreed-upon number. You can expect the dealer to press for . Don’t be averse to options such as paint protection or fabric in the event that an additional option like gap insurance might be more useful. Learn more
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The article was written by Auto Loans Reporter Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the details of borrowing money to buy cars. The article was edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are committed to helping readers gain confidence to manage their finances with clear, well-researched details that cut otherwise complex topics into manageable bites.
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