Financing A Car: Tips For First Time Buyers

Buying a car is a big investment, but whether you’re a teen buying your first used car or an established professional upgrading your ride, you’ll need to put some serious thought into how you’ll pay for that vehicle. Will you take out a loan? Have you saved enough money? Are you planning to lease the car instead? You may not be sure at the beginning of the process, but by working with your local dealership and your bank, you should be able to find an appropriate solution.

If you’re not sure where to start, don’t worry – there are several small steps you can take to prepare yourself before you arrive at the dealership.

Know What Counts

If you think you may be financing your new vehicle, it’s important to know what factors go into calculating your eligibility. According to Ford Pembroke Pines, the main factors used to establish loan eligibility are your income, your FICO score, your employment history, and how much money you can afford for the down payment. These considerations are combined to determine how big of a loan you qualify for and how high the interest rate on that loan will be.

Car Finance For Bad Credit

Age Is More Than A Number

Many people buy their first car at the end of high school or during their college years, but be prepared for a few extra hurdles if you’re a young buyer. One reason for this is that college students are discouraged from using credit cards. While this can be a smart move, preventing young people from racking up debt, it also means you aren’t establishing a significant credit history. In many cases, young people find themselves either relying on their parents’ credit or needing them to cosign a loan.

The Used Advantage

If at all possible, consider buying your first car used from someone you know, or through an individual ad. Under these circumstances, the seller is usually hoping to offload their car at a reasonable price – more than they could sell it to a used lot for, most likely, but still less than you would pay at the dealership. Opt for a simple, older car that doesn’t have a lot of fussy features and use this as an opportunity to learn about car care and maintenance.

Consider Other Expenses

Everyone knows that buying a car is only a small part of the financial commitment – the rest comes in when you need maintenance services, insurance, and gas. Even if you’ll just be driving around the neighborhood, these costs will add up quickly. Make sure you have plenty of money set aside for registering the car, getting license plates, and all the other small costs involved in car ownership.

Buying a car can be stressful and expensive, but in many areas it’s necessary for holding down a job, running errands, and simply visiting with friends. By properly preparing for your purchase, you’ll position yourself well for a lifetime of responsible car ownership.