If you’ve just passed your driving test, then you probably can’t wait to buy your first car. Yet, a new car is a big purchase. And as such, it isn’t something that you should rush into – especially when the cost of living is rising.
There are various common potholes that you can fall into on the road to owning your first vehicle. Luckily, we’ve written this short article to help you navigate them. Keep reading to find out how to buy your first car.
1. Create a budget
It’s important that you don’t underestimate the cost of owning a car. Besides the vehicle itself, there are many other things that you’re going to need to pay for, including:
- Car insurance
- Car tax
- Maintenance costs
For this reason, it’s essential that you create a budget that includes these extra costs. This will inform you as to which vehicle you can actually afford to buy.
Start off by adding up your monthly income and expenses. After doing so, you’ll have a clearer idea of how much money you have available to cover these monthly costs.
2. Explore financing options
Unless you’ve saved up enough cash to buy your car outright, you’ll need to wait long enough to do so. Alternatively, you could pay for it using finance. What options are available?
- Car loan: This will allow you to pay for the car in full and repay the bank in manageable installments.
- Financing: By making an agreement with your dealer, you can break down the cost of your new vehicle into monthly payments – including interest.
- Personal contract plan (PCP): Pay for the car in monthly installments and choose between keeping the car, returning it or using the payments that you’ve made to contribute towards your next vehicle with the dealership.
3. Consider buying used
There are many benefits of buying a used car rather than a brand new one. We’ll look at just one.
To state the obvious, they’re less expensive. But this statement goes far beyond the initial purchase. In the first place, they’re a lot cheaper to tax and register. And since vehicle depreciation is proportional to mileage, used cars depreciate much slower.
4. Have the car inspected
It doesn’t matter whether you’re buying the car from a dealership or from an acquaintance. You should always have a mechanic that you trust inspect it first.
Most car mechanics offer this service under the name “pre-purchase inspection”. They’ll be able to tell you whether or not the vehicle is worth your money, potentially saving you thousands in the process.
Buying your first vehicle is exciting, but it’s easy to make some common mistakes. Follow our advice above to make sure you get on the road in the best shape possible.