Unity One Credit Union

Tips for First Time Car Buyers!

Wed, Jun 20, 2012 @ 08:51 AM / by Erayne Hill

first time car buyer
It doesn't matter whether you’re a recent grad with your first real job or someone other than the typical first time car buyer, the car-buying process can be filled with an enormous amount of uncertainty. Check out these tips for some help:

Know what you can spend monthly. Do not purchase more car than you can afford. A good rule of thumb for first time car buyers is to add up all of your monthly debts and divide it into your monthly income. Do not go above 50%. If your auto payment is $250.00 and your other monthly debt is $750.00 then your total monthly debt is $1,000. Let’s say your monthly income is $2500.00. Divide one-thousand dollars by $2500 and your debt ratio is 40%.

Debt ($1000)/monthly income ($2500) = debt ratio (.4 or 4%)

Establish your vehicle needs. Purchase a vehicle that you need and one that accommodates your lifestyle. For example, you may not need the extra room from a large SUV if you are single. Consider the cost of gas and increasing insurance premiums. You can always rent these types of vehicles if needed or to satisfy your curiosity.

Do your research. Do not visit the dealership unprepared. Gather as much information as possible before going. Go online to www.carfax.com and get a report on your desired vehicle and get a carfax (www.carfax.com). This report will give you vehicle history like if the car has been in a collision. Knowing this may alert you to hidden costs. Also, you want to get information about the dealership. Visit the Better Business Bureau online and get reviews. Finally, try the old-fashioned way and obtain information by word-of-mouth.

Locate a convenient dealer. The dealership should be easy to access. Find a dealer with the most accessible staff with fantastic customer service.  This will be one of the most important transactions in your life as a first time car buyer; so, you will need as much assistance as possible.

Take a test drive. Virtually nothing is more important in your decision process than how you feel behind the wheel. How does the car feel when you are driving?

Determine your purchase price. Once you’ve decided what you like and have established what you can afford, it’s time to reach a purchase price. Visit NADA online at nadaguides.com, and get a retail price. Have this price with you once you reach the dealership. You do not want to pay over retail for the vehicle.

Secure financing. It’s always a good idea to have your financing secure before you reach the dealership; but if not, always check loan rates before arriving so you know your options as a first time car buyer. If you are a member of a credit union, check with your loan officer and take a pre-approval letter with you to the dealership.


Set up an appointment to talk with a member service officer about car loans right now by calling 1-800-628-5517.

Topics: credit unions, loans, first time car buyers, first time car buyer

Erayne Hill

Written by Erayne Hill

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