Whether you’re a senior thinking about treating yourself for graduation or a freshman looking for a vehicle you can have on campus for the next few years, buying your first car can seem overwhelming. I am currently in the process of looking at something newer than my 2006 Nissan, and it is a lot of work.
Purchasing a new car is not something to take lightly or do on a whim. There is no buyer’s remorse three or four days after you buy it. What you buy is what you’re stuck with until your next purchase or trade-in.
It requires a lot of research and budgeting. You have to figure out what type of car will fit your budget. You need to calculate how much you want to make as a down payment and how long you want the loan duration to last. Both of these will have very different outcomes on future car payments that you need to consider.
Another important price to factor into your budget is the insurance cost. Most people under the age of 25 have higher insurance rates. However, newer cars don’t necessarily mean they will cost more to insure. If you can ride the coattails of your parents’ insurance, it will be lower. Some companies, like Allstate, also offer new car, good student and safe driver discounts to help you save even more.
One of the biggest deciding factors of buying a new car, though, is your credit score. As young adults, you may or may not have credit. If you have bills or other loans that you pay regularly, you are more likely to have credit to buy your own car. However, if you don’t pay any bills, you may need a cosigner, like your parents or guardians. They already have credit and having a cosigner will help you build credit.
Even though buying a new car is a big deal, these are some simple steps to ensure your first purchase is successful.
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