Buying a First Car

If you are looking to buy your first car there are definitely a few things you should know.  Of course, buying a new car can be incredibly exciting and one of the biggest purchases you will ever make- besides buying a house.  And while there is plenty to gain, there is some risk so make sure you make a smart decision.  Here are some tips.

Research Before You Buy
It’s very important to know what you are buying before putting money down or taking out a loan and with the internet it is easier than ever to find a great deal.  Take the time to research the cars that you are interested in detail.  On the web, you can find out information such as pricing, dealer invoices, features and more.  There is no excuse for paying too much to purchase a new car, especially with so many tools and resources at your disposal.

Understand Financing
Since most people buying their first car can not buy it outright, it is very important to know how financing works.  Interest rates can make a car thousands of dollars more expensive, so understand how banks and lending companies work.  Also if you are looking for financing from a neighborhood bank, shop around for the lowest interest rate.

No Credit or a Short Credit History
One of the major reasons for banks to raise interest rates is if you have no credit or a short credit history.  However, there are strategies to reduce interest rates- specifically putting more money down- usually about 20% or more or getting a co-signer.  A co-signer can be a family member or a good friend with established credit.  However, if you fail to pay for your vehicle each month, the co signer becomes responsible for the bill.