7 tips for buying your first car
Get pointers for every step of your car-buying journey so you can make smart choices the whole way.
Buying your first car can be exciting, but there’s a lot to manage. Planning ahead can help make the process easier—and help ensure you end up with the best car for you. Here are some important things to keep in mind as you start shopping for your first car.
Be honest about your needs
Do you need a car to get to class or work every day, or just for weekend adventures? What’s the weather like where you live—snowy, rainy or hot? Evaluate your lifestyle and the driving conditions you face most often. Do your research: Learn about different features and options, and how they might affect a car’s price.
Think about your budget and financing
Take a realistic look at your finances, too. That includes not just the purchase price but budgeting for use and care of your future car, including maintenance, insurance, gas, repairs and parking. Learn more about the true cost of owning a car.
A down payment is not typically required for your loan, but making one is usually a good idea: You won’t have to borrow as much, and your monthly payment will be lower. (In general, for every $1,000 you put down, your monthly car payment generally drops by $15 to $18, according to November 2017 data from Edmunds.) Use Bank of America’s auto loan calculator to see how a down payment can affect your monthly car loan payment.
Explore your options
Shopping for your first car is a lot easier for you than it was for your parents. The Internet offers a wealth of sellers beyond your local area (who may ship cars to your area, which may come with a fee), which can mean more choices in your price range. You can research and narrow down the choices by looking at online auto rankings in categories like safety or auto type (such as SUVs, hybrids). Learn more about how to shop for—and even finance—a car online.
For new cars, ask multiple dealers to quote you prices. If you look at used cars, be sure to ask for a Carfax report, which details a used vehicle’s history, including any accidents.
Know your credit score
Your credit score helps determine the interest rate you pay on a car loan. Better credit may help get you a more favorable interest rate, which in turn will affect your overall car-buying budget. You may also be able to get your credit score for free through your credit card provider.
Check your credit report before you’re ready to buy, to allow time to improve your credit score. Visit AnnualCreditReport.com to get a free copy of your credit report from each of the three major credit bureaus (Experian, Equifax and TransUnion).
Apply for a loan
Shopping for a car loan before shopping for a car may seem counterintuitive, but it’s useful. It gives you an idea of how much you can borrow (and at what interest rate), which means you don’t need to make financing decisions on the fly at the dealership. Start at your bank or credit union, then get quotes from other lenders to make sure you get the best rate. Learn more about Bank of America’s online car shopping resource.
Take a test drive
Once you’ve identified a few cars that might fit your needs and budget, take each for a test drive to see how you feel in it and how it performs. Try to drive all the cars you’re considering on the same day so you can easily compare them. It’s a good idea to call ahead to make appointments to structure the day—and it helps you gauge the customer service at each dealership.
Close the deal
You’ve done your research, you know what you want and you have your financing in place. When it’s time to negotiate the deal, you’re in control, and can focus on reading your contract carefully. Before you sign, though, be sure you understand the terms of any financing and warranty agreements.
After you drive off, make sure you never miss a car payment by signing up for automatic bill payment—so you can focus on your next destination.