Buying Your First Car, One Step at a Time

Welcome to the world of driving and let me tell you - it takes a while to understand all of the fees, loans, paperwork, and policies that every driver needs to have. Buying your first vehicle is a lot of work, but you can do it!

Do you have a car in mind? Make sure you check out a used car's Vehicle History Reports. This can save you thousands of dollars in unexpected losses when you buy a used car. Also, make sure that you enter new car dealers with "The Folder" of competitive new car price quotes. Otherwise you will most likely pay thousands more than you should have to.

Is the car too expensive? As a general rule, if you cannot afford to put at least a 20% down payment on a car, then you cannot afford to buy that car. Don't take out a loan that is going to take you more than 48 months to pay off.

Financial difficulties for young people looking to buy a car:

• Your lack of credit history is a barrier because it is very difficult to get a car loan.
• Car salespeople may know that you are a first-time buyer and make it hard to get the best deal.
• Lenders don't approve car loans for used cars that are over 5 years old.
• Insurance and other costs can take you out of the game!

Make sure to leave room in your budget for maintenance expenses. You should expect to replace your tires once a year, change your oil twice a year, and take it in for one medium-sized repair every year. And don't forget the price of gas! After you consider all of these factors, you may realize that you can't afford the same car that you thought you could.

Another big consideration is insurance. Insurance for teens is very costly - often in the $5,000 dollars range. If it is possible, you are better off being a part of your parent's insurance policy. A "good student discount" will help you out, too, so study up! it's important to have a good, thorough insurance plan or else a small incident can really ruin your plans!

It's a lot of work, but it's worth it to make sure that you are being responsible about your first major purchase. A car can feel like a passageway into adulthood, but don't forget the responsibilities that come along with it.