First Time Car Buyers: What to Know

Posted by Jason on February 2, 2010

You’ve decided it’s finally time to purchase your first car- but you can’t just jump right into it.  Take some time to determine your needs, price point, and possible barriers your might run into.

1) Make sure you get insurance quotes first
Be knowledgeable about what you’re going to have to pay in insurance- you’ve got several options so be sure to choose something that fits your needs the best.

2) Research your financing options
Be sure you know how much interest you’ll be paying BEFORE you purchase your car.  Check out local dealerships and see who’s offering 0% financing.

3) Make sure you’ve got the money to put down
In order to keep yourself from getting upside-down, make sure you’ve got 20% of the purchase price to put down on the car.

Barriers

• Lack of credit history is the biggest barrier, it is very difficult to get a car loans
• Lenders won’t approve car loans on used cars older than 5 years
• Insurance rates for teens especially are very costly, often in the $5000 range
• Insurance rates for single males under the age of 25 are also very costly.

You will qualify for a loan if you have…

• A documented Monthly income of $1600 or more
• Been living in the same address for at least 6 months
• Been employed by the same company for 6 months
• If your credit score is below 600, it’s very difficult to get approval, and below 550 it is nearly impossible.

If you’ve got all your ducks in a row and are ready to purchase a new car good luck! It’s a great experience!