So, the time has come to buy your first car!
This is an exciting time, but there are a lot of things to consider before making the purchase.
Make sure your credit is in good standing
Your credit score is a huge factor because unless you have the cash up front for the entire cost of the car, you’ll need to take out a loan.
Now, even someone with the worst credit can purchase a car, but the interest rate will be super high. Think about it this way: the better your credit score is, the lower your payments will be.Speaking of monthly payments, remember to factor in insurance
When figuring out how much you can afford on your car per month, know that your insurance goes up when you have a car with payments. Why? You have to have full coverage and full coverage is always more than liability. Shop around for affordable insurance. Some insurance companies give a discount for good grades and the rate could go down once you turn 25.
Know what bank you’re going to work with
Now, you can definitely shop around, but each time a bank runs your credit, your credit score goes down a few points. This is because it is a “hard inquiry” aka the last thing you need. Contact your bank and see what they offer. If you belong to a special credit union, contact them as well. Ask family members for advice. Just make sure you’re not getting your credit run too often.
Take your time
Don’t make an impulse decision on something this big. You will be making payments on this car for nearly 5 years. No matter what happens, unless you refinance at some point, you will be paying the same amount every single month.
The car is going to age, need work done and may even breakdown at some point and the bank will still want that payment every month. Do your research on cars that last a while so you really get your money’s worth. We also have a guide to narrow down your choices.The process of buying a car can be hard. Keep these tips in mind, do not rush into anything and bring someone knowledgeable with you to ensure that you’re not getting cheated. Don’t stress too much—when you drive away from the lot in your new wheels you’ll feel amazing!
Feature Photo via We Heart It