How to Buy Your First New Car

The time has come and you're able to afford your first new car. From negotiating a fair price to dealing with extra, unexpected fees, and from financing to buying insurance, buying your first new car can seem like a difficult maze to navigate. Tip the scales in your favor by doing the research before you step on the lot--picking out the type of car you want and figuring out how much you can afford.

Research the different makes and models. The Internet can be handy tool for research, as you can read reviews of every model and find out the emissions and gas mileage of each car. Make a list of the top three to five cars you'd like to test drive, based on your needs.

Get pre-approved for a car loan from your bank. You may get a better deal on financing by going through your bank, according to Des Toups of MSN. When you finally go to the dealer, bring your financing offer with you so you can compare it to the one the dealer offers you. Most likely, your bank's loan will be better, but you never know.

Buy insurance first. If you already own a used car, call your agent and see how much insurance will be for your new car. If you don't have a car, call a few companies and get quotes, then choose the lowest cost insurance with the most protection.

Save up enough money for at least a 20 percent down payment. You want to own a small portion of the car, as it starts depreciating the second you drive it away. If you don't put enough down and total the car in an accident, your insurance company will only pay you the depreciated value, which may not cover your loan balance. You will then have to pay the bank or lender for a car you no longer have.

Educate yourself about the car's value and any specials or deals available before purchasing. Use an online calculator (see Resources, below) to figure out the car's value, which is based on what people in your area actually pay for the car, not the price on its sticker.

Contact the dealer and start negotiating. You may prefer dealing with Internet salespeople, as they are usually more upfront about the cost of the car, and may give you a reasonable price first, according to Edmonds.com. If you prefer to deal with a salesperson face to face, head to the dealership.u

Read everything you are asked to sign, before signing it. If anything looks wrong, ask about it. Also ask about any unexpected charges the dealer may try to sneak in. You can usually get the "extras," such as Vehicle Identification Number etching, done somewhere else for less money, according to Toups.

Give your new car another once over and if everything looks all right, drive off the lot. Edmunds.com recommends getting a due bill if the car needs any work, such as a dent repair.

Tips

  • Check your credit before starting the car buying process. If you have a score of less than 620, you may not be able to get a loan. Try boosting your credit score before buying a car.
  • Keep in mind that insurance rates vary widely depending on the type of car you buy. Your new car's insurance can cost more per month than the car payment. If that's the case, consider buying a different model.

About the Author

Based in Pennsylvania, Emily Weller has been writing professionally since 2007, when she began writing theater reviews Off-Off Broadway productions. Since then, she has written for TheNest, ModernMom and Rhode Island Home and Design magazine, among others. Weller attended CUNY/Brooklyn college and Temple University.