Tips on Buying Your First Car With Shaky Credit
Monday, December 3, 2018, 6:00 AM | Leave Comment
Buying your first car is a milestone by any definition; it’s an investment into the transportation method that is going to get you from A to B for at least a few years, and a step towards independence and freedom.
Many people buy a car early into their adult years, often as soon as they’re able to afford one. However, the type of car you buy largely depends on your financial stability and credit status.
When buying your first car, you should read the fine print to ensure you are making a financially sound decision that will make sense a few years down the road.
-
The Right First Car
Before you invest thousands of dollars into a new car, take a moment to consider where you are in your life and the reasons behind wanting a new car.
Often, people buy a new car either because the hand-me-down car they received from their parents is on its last leg or because they feel financially stable enough to upgrade their current bike or car to something that will better suit their lifestyle.
If your city doesn’t have access to one of the 62,449 public transit vehicles in the U.S. and buying a car is a necessity, then you’ll have a few financial and auto loan matters to research before deciding how to go about your purchase.
When you have a reliable income, it can be tempting to splurge on a nice car. What’s a 300 dollar car payment if you’re gonna be driving around in a lightly used Volvo?
However, car upkeep and insurance on top of a high monthly payment can be enough expenses to make paying the rest of your bills a balancing act, which could create some new financial stress in your life.
On average, Americans spend five percent of their income on purchasing a car and another five percent on maintenance.
If your car payment takes up a significantly greater percentage than that, you should create a budget to ensure you’ll be able to afford the car.
-
Buying a Car With Bad Credit
You should also consider how long you’ll have to keep that budget and the types of changes it allows.
If you’re hoping to move into a nicer apartment, a high car payment may not provide you with enough expendable income to do so.
You should also consider your credit score, and if waiting to buy a nicer car might be the smarter decision until you build your credit.
By considering your goals for the next several years, you can decide if now is a good time to buy your dream car or if a cheap used car will be enough in the meantime.
If your credit score is on the low side, it’s a good idea to try to fix your credit score before making an auto purchase, especially if you’re on the brink of having decent credit.
A few points could make a difference of thousands of dollars of interest over the course of your car loan.
You should also come prepared by having a 20 percent down payment ready for the car you’re hoping to purchase as this will help build the dealer’s confidence; this will help give you a leg up when negotiating the terms of your loan.
Even if you’re desperate to buy a car, don’t agree to any terms a salesman throws at you just because you have bad credit, as this can exacerbate your financial situation.
Buying your first car can be an incredibly exciting time, albeit stressful depending on your financial stability. However, if you take the necessary steps to prepare to purchase a vehicle, you should be able to make a decision that best suits your tastes and your wallet.
Throw us a like at Facebook.com/doable.finance
