Are you a teenager with a new driver’s license looking for your first ride? Looking for a car to get you to college or a job? Dreaming of hitting the open road this summer, but not sure how to make it happen?
Buying your first car is a big deal. It can help build your credit, give you freedom to get around, and is a big step into adulthood. But there are some mistakes you need to avoid when buying your first car you might not know.
Don't Let Your Expectations Go Wild
You might have a dream car you’ve been eyeing, but cars are expensive, and the fancy ones are even more costly. If you are buying your first car, put aside many of your expectations or you’ll be disappointed.
Maybe when you think of buying your first car, it’s a brand new sports car, or a massive truck, or something shiny and new. The reality is, your first car is likely going to be used, sensible, and hopefully affordable. The sooner you acknowledge the reality of your first car, the happier you’ll be.
Don't Go to a Dealership Right Away
Dealerships, and car salespeople, have one goal: to sell you a car that day. If you are starting the process of buying a car, going to a dealership first is not a wise decision. The sales people are going to pressure you to buy a car, even if it’s not the smartest choice for you.
There is a ton to do before heading to a dealership. You should do research on the type of car you want, investigate auto loan rates with local lenders, and understand your current credit score.
Really, your first step before buying a car is to understand your credit score and financial situation. You need to know what your credit score is, what contributes to a higher credit score, and how that can impact buying your first car.
Don't Buy without a Budget
Even without getting a loan approved, you can get a general understanding of how much you can afford when buying a car. By examining your savings and income, you can see how much you can dedicate to a down payment and monthly payments for a car.
If you don’t have a budget, you need to build one out to prepare for buying a car. Knowing how much you can afford is a huge deciding factor when making such a large purchase. It’s quite possible to take out an auto loan and get approved for a monthly amount you can’t actually afford.
Pioneer members get free access to GreenPath Financial Wellness, who can provide one-on-one help with building a budget and other factors in buying a car.
Don't Pick the First Car You See
Buying a car is a huge decision, and you should take your time doing so. Don’t just buy the first car you sit in, even if it checks all of your requirements. Take your time and look at a variety of cars and even go to multiple dealerships.
You want to find the best car and the best deal. Negotiating and bartering is not normally a part of shopping in America, but it is part of buying a car. The more informed you are on prices and deals between sellers, the more power you have when bartering.
Don't Stick with the First Loan Offer You Get
When you buy a car through a dealership, they’ll offer you potential loans from different lenders they work with. Sometimes, these can be good offers with low interest rates and favorable terms, but not always.
Before you head over to a dealership, you should do some loan hunting yourself. You might find more favorable rates or be able to work with an institution you like rather than whatever the dealership offers you.
If you are buying a car for the first time, Pioneer’s First Time Auto Buyer Loan is perfect for you! We’ll help you secure a loan, along with giving you a $500 shared secured VISA credit card to help build your credit and a free Credit Checkup, to better understand your current situation.
Learn More about the First Time Auto Buyer Loan