What First Time Car Owners Need to Know
You’re in the market for a car, and you’ve finally decided to take the plunge. Your first-time car purchase is one of life’s milestones, and it can be an exciting time in your life. However, before you get too excited about all that newfound freedom on four wheels, there are some things you should know. Helen Lee Schifter thinks it is important for first-time car buyers to know how much it will cost in the long run and what you should be expecting with your purchase.
You will want to make sure that you keep your insurance coverage up-to-date at all times. You never know when an accident may happen, and it’s always better to be prepared than not. It is also a good idea for first-time car owners because they tend to get into more accidents, which can cause higher premiums later on if the customer doesn’t take care of their vehicle well enough or follow proper safety guidelines (such as wearing seat belts).
One of the first things that new car buyers should understand is that a new car has a very high depreciation rate from the moment it leaves the lot. For example, a new car loses up to 25% of its value the first year. This number declines as you age your vehicle, but it is still noticeable. Newer cars have many advantages over older ones, such as less maintenance and repairs, but first-time buyers must understand that a used car has a much cheaper initial price tag.
Schifter thinks you need to consider the second thing before buying a is: what kind of lifestyle are you leading? If your daily routine is to commute back and forth from work, make sure that the car you are getting has enough space for commuting. You don’t want to purchase a small compact only to find out afterward that it doesn’t fit all of your belongings or if there isn’t enough legroom in case someone tall sits behind you. This also applies if you have kids who will be riding with you often. Make sure their safety comes first when purchasing a vehicle because they might end up being uncomfortable on longer drives due to lack of seatbelts or not having adequate storage for snacks/games/entertainment during road trips.
It would be best always to try using an online bank loan calculator before going into any dealership. This way, you will know exactly how much you can afford in terms of monthly payments and how much your interest rate will be. It’s always better for car buyers to have this information beforehand so that they are not fooled into thinking they can afford something when the truth might be otherwise.
Helen Lee Schifter also recommends that people try looking at their local credit union before shopping around with dealerships because sometimes these places offer lower interest rates than what a dealership would provide. This could save you hundreds or thousands of dollars over the course of repaying your loan.
The last thing she thinks you should consider before buying a vehicle is: creating an emergency fund. First-time car owners often get caught wanting to purchase certain models/makes/trends and spend more than they expected. Make sure that you have a certain amount of money set aside for emergencies so that if something happens to your car, you won’t be stuck with no transportation or extra-high loan payments.