Buying your first car can seem overwhelming.  Let’s talk about some of the most important things to consider when buying your first car.

1. Intended Use

Think about how this car will be utilized. Here are some questions to ask yourself about the use of your vehicle:

  • What distances will you be traveling for work or school?
  • Will you need to be able to haul a trailer?
  • Are you going to have a need for passengers?
  • Will you need all wheel drive for snowy conditions or driving in the mountains?
2. Durability and Maintenance

Each car, no matter the age, will have recurring maintenance.  Research different makes and models to discover the recommended maintenance.  Take time to read reviews and visit the manufacturer websites to find potential problems or common repairs.  You will also want to find a trusted mechanic or gain a relationship with a reputable company for oil changes and regular maintenance.

3. Financial Ability

This is a big one. Owning a car is a big financial responsibility.  Will you be financing your vehicle or have you saved up cash to purchase it?

When financing a vehicle, you need to determine if the monthly payment will fit into your budget comfortably.  You can usually determine this by figuring your debt to income ratio. For more information on debt to income ratio, Click Here.  Make sure you add the maintenance and repair costs to your monthly payment.  You can research different financial institutions for interest rates, specials or convenient payment options. Click HERE for information about Ascent Credit Union’s auto loans and interest rates.  Dealers usually offer financing, but you will have to pay a dealer fee.  That might work for you if they are offering loans for bad credit or low down payments.  If you plan to finance your auto, here are some things you will need to know.

  • Vehicle Type
  • Is It New or Used
  • Estimated Purchase Price
  • Down Payment Amount
  • Requested Loan Amount
  • Loan Term

If you are paying cash for your vehicle, keep in mind that you will need to pay registration fees and taxes.  Depending on the state you live in, you will typically pay between 7% and 11% of the vehicle cost for taxes. You will also pay for the registration fees from the Division of Motor Vehicles. This amount is determined usually by year of vehicle, purchase price and your location.

4. Dealership vs. Individual

Whether you are buying from a dealership or private seller, each option has disadvantages and advantages.

Advantages of Private Seller

The greatest advantage is the savings.  Dealerships mark up the price of the vehicle to make their profit. That means that the value of your vehicle will greatly decrease when you drive it off the lot.

Another advantage of buying through private seller is that you will be able to get more information about the history of the vehicle and any tips or guidance for the cars quirks and maintenance.

Disadvantages of Private Seller

The disadvantage of a private seller is that you will not receive the support, warranty or maintenance that is typically available through a dealership.  You can get a vehicle check and get an after-market warranty, but the terms are usually more beneficial through a dealership.

Advantages of a Dealership

One of the major advantages of purchasing a used car from a dealership is the customer service support, warranty and promotions – such as lifetime oil changes or 4 new tires with purchase. They may also offer financing. Dealerships can sometime offer more options for buyers with little or no credit. This might be your only option if you need a car quickly.

Another advantage of a dealership is the access to a large variety of vehicles and options. If you have done your research, and you know exactly what car and features you are looking for, a dealership might be a great place to look.

Disadvantages of a Dealership

The added cost of margin, dealer fees, and commissions might be the biggest disadvantage of buying from a dealership.

Using a dealership for financing could also mean higher interest rates and fees.  If you have the cash available to purchase a car, you will get the most for your money with a private seller.

Whichever option you choose, you want to be able to trust the seller. If you fully trust that a private seller has cared for the vehicle and you’re willing to take on the associated risk, then you may be able to get a great car for a better value. If, however, you are looking for support, special financing or larger selection, a dealership may be the way to go.

In conclusion, buying a car can be exciting but stressful. We are here to help you through the process. Contact us before you buy your next vehicle.