Get the best deal on your first car purchase with these simple strategies
Whether you’re a new driver or finally in the position to own a new set of wheels, buying your first car can feel a little overwhelming. From financing options and credit checks to finding the right vehicle that suits your lifestyle, it can be a lot to take in. Thankfully, Mike’s Car Store is here to help! These five tips will help you get approved, get a low-interest rate, get the best deal and ultimately simplify your first-time buying experience!
From safety to seating requirements to climate conditions, there are various factors you’ll want to consider when shopping for your first vehicle. Do you live in a region where you could benefit from 4WD? Do you have a family of 6 that requires exceptional seating and cargo space as well as reliable safety features? Maybe you’re looking for a vehicle that helps you save with low fuel economy. Getting clear on your basic non-negotiables when it comes to your car’s features and specs will save you from needing to buy another in the near future.
Once you’ve gotten clear on what you need in a vehicle, it’s time to determine your budget. If you plan to finance your new car, it’s important to find a payment plan that sits within your means. A good rule of thumb is to ensure your monthly car payments do not exceed 10 to 15% of your monthly income. If you’re having a hard time finding your ideal vehicle within this cost, you likely need to sacrifice a few features.
Depending on your financial situation, it’s typically advisable for first-time buyers to pay no more than $10,000 to $15,000 on a vehicle. This is especially the case for young drivers who likely won’t keep the car after a few years once their needs have changed.
For most first-time buyers, having a consigner is critical, especially if the buyer has low or non-existent credit. It’s best to find a co-signer with a high credit score of at least 750 as well as a long credit history. This person could be a parent, grandparent or older professional who’s known for consistently paying mortgages, car loans, etc. and has incurred little to no debt. This will be crucial to helping you get a low interest rate and better terms.
When financing a vehicle or even a home, the banks always see hefty down-payments as a good sign of your ability to pay off your loan. When banks receive a 10 to 20% downpayment, they view this investment in good faith and will be more likely to approve your loan with low interest rates and better terms.
Ideally, all citizens should be active in the credit system by the age of 13 years old. If you’re still underage, have your parents list you as a signee on credit cards to ensure you’re building your credit as early as possible. This will give you a huge leg-up when it comes time to purchase your very first vehicle.
From the moment you get your very first pay cheque, it’s a good idea to form a relationship with a local bank in your community – the smaller, the better! This way, when it comes time to purchase your first vehicle, you can use your own financing based on the relationships you’ve built with your personal bank over the years and likely get yourself a much lower interest rate.
Buying a used car doesn’t have to suck. If you’re in the Georgetown, Louisville, and Floyd County areas and looking to buy your first vehicle, buying pre-owned can be a great option. Here at Mike’s Car Store, we offer quality used cars, trucks, vans, and SUVs for all budgets. Browse our inventory today and contact us anytime for more questions as a first-time buyer!