Buying your first car
Once you pass your test and get a driver’s license, you’ll probably start thinking about buying your first car. Purchasing a car is a big financial step—probably the largest you’ve considered taking thus far. Young adults should think carefully about all of the ramifications of car ownership before determining whether owning a car is right for them.
First, consider how much you can afford to spend on a car. For many young adults, a used car is their best option. Keep in mind that the price for the actual vehicle is just part of the overall cost of car ownership – you’ll also have to factor in insurance costs, gasoline, routine maintenance, and any repairs that may eventually be required.
When purchasing a used car, do your research in advance so that you know exactly what you are buying. Purchase a history report using the car’s VIN (vehicle identification number), and ask to have the car inspected by a mechanic. It’s always a good idea to buy a used car from a trusted person, so let your friends and family know that you are looking for a car. Even if they aren’t selling one, they may know of someone reputable who is.
When choosing the type of car you want to buy, do research so that you buy the right car for you. Read reviews and find out if the car you are interested in has any history of mechanical problems. Keep in mind while stylish cars look nice, your best option may be a car that is more functional.
If you need to obtain a car loan to purchase the car, make sure you have established a personal credit history before doing so. Many lenders won’t give a car loan to someone with untested credit, so one option is to have a credit card with an established history of on time payments. In addition, you’ll also need to have some form of income. If you are planning to get a car loan, you should have a good amount of savings first, so that you can put down a large down payment.
Car insurance for young adults can be expensive, so shop around for the best deal. It may be possible to add your car to your parents’ policy. Also, ask about discounts that may be available, such as a good student discount.
Finally, once you’ve purchased your car, keep up to date with routine maintenance, such as oil changes. Skipping required routine maintenance is bad for your car and may cost you more money in the long run. Also, keep some savings available so that you are able to pay for any necessary car repairs.