By: Gov Auctions | 28 January 2017
Are you Ready to Buy your First Car?
Like your first date or first day of school, buying your first car is a milestone that can be both daunting and exhilarating. Nothing quite beats the freedom of your own vehicle to get you where you want to go, but with a car comes financial responsibilities that can quickly turn into burdens if you’re not prepared. With that in mind, here’s some tips and information to help you decide if you’re truly ready to buy your first car.
Millennials are buying cars earlier
With so many concerns around the housing market, Millennials are finding new ways to build up their credit rating by buying a car earlier. In fact, according to an ABC News report, 18.8% (or just under one in five) Americans aged between 19 and 22 have an auto loan listed on their credit reports. Between the ages of 23 and 27 that figure jumps to 39.3%. Many young buyers are also looking for alternatives to buying new cars or shopping at used car dealerships, including buying at auction. If you’re in either of those age brackets and considering buying your first car, it helps to know you’re not alone.
What costs are involved in buying your first car?
Owning your first car is a big responsibility. Chances are, up until now you’ve never quite purchase something with so many expenses and considerations. There's also plenty of ongoing issues that go into car ownership.
When calculating the cost of the car, make sure to include the purchase price, along with all of the associated and ongoing costs such as insurance, repairs, oil changes, gas, tolls, parking meters, registration and any other expenses that may arise.
Start adding putting the list together and you're in for some serious financial obligation. Here’s where setting a budget can help.
Setting your budget
Everyone has their own budget, but it’s important to set yours before you start shopping around. By knowing what you have, how much you can borrow, and what you can safely pay back, you’ll not only be able to afford your own vehicle, but still have time and money to do the things you love.
Most people spend around 10-15% of their monthly budget on car related expenses, but for your first car try aiming for 10% or under, unless there is good reason to do otherwise. Don’t feel compelled to buy the most expensive car that you can afford if there is another, cheaper option that also fulfils your needs.
Get a credit check
Knowing your current credit score will give you a good idea how much money a bank will loan you. If you buy within budget and make regular payments you’ll also build your credit score which can help with your next car or even buying a home. Everyone is entitled to one free credit check per year. You can find out more information at the FTC website.
Put some time into research
The most important thing you can do prepare for buying your first car is to get online and out in the world and find out as much as you can about the sort of car you want to buy.
It’s important to prioritize practicalities like your financial situation, lifestyle and how often you plan to drive. These factors are much more important that the car you think looks the best.
All it takes is a little time and effort to learn which vehicles are best for you. If you don’t place too much emphasis on having the hottest looking vehicle out there you will find there absolutely is a car to fit your needs.
Should I buy a new or used car?
The choice between a new and used car can be a tricky one. New cars are expensive, and tend to lose a lot of their value once they leave the showroom floor, while used cars bought from questionable dealerships can turn out to be lemons, leading to financial burdens down the road. There is a happy middle ground though, you just have to know where to find it.
When it comes to buying a used car there are plenty of opportunities out there for the savvy buyer. You don’t necessarily have to waste time shopping around and haggling at dealerships. Instead, you might want to look into government and used car auctions.
At Gov Auctions not only do you get a range of quality, top of the range used vehicles but our customer service is second to none, with friendly and knowledgeable staff ready to help you. Why overspend on a brand new car or deal with vehicles of questionable quality at a used car dealership? Save yourself $1000s and find your nearest auction today.