Everything You Need To Do Before You Buy Your First Car

Buying a car is a big girl purchase. It's a long-term commitment that requires thorough planning, not just before the purchase but also after. It involves continuous maintenance, extensive paperwork, and, most importantly, a dedicated effort from you.

It is a purchase that demands accountability. Because it's not just about choosing the model and design you like; it is about carefully assessing your financial capabilities and understanding your needs—and your capacity to sustain this purchase.

If you’re ready to take this significant step, here’s a checklist to consider before taking the plunge and buying your first car.

Here’s Everything You Need To Do Before You Buy Your First Car

1. Assess your lifestyle.

Before purchasing a car, it is crucial to determine whether you truly need it for your current lifestyle. Consider your commuting habits and the distance between your usual destinations and your home. With many jobs and classes now handled online, the necessity for commuting or even leaving your house has significantly reduced compared to pre-pandemic.

Aside from that, you also have to consider domestic and professional work. Are you the person responsible for running household errands? Does your job require frequent travel in and out of the city? How often do you travel? Tracking this information is essential in assessing whether a car will fit your lifestyle and how much use you can get out of it.

2. Consider your resources and take into account all related expenses.

Robbie Morris, a financial planner at Roots Financial Planning, highly suggests the 20/4/7 rule for buying a new car to avoid financial strain. Here's what the rule means:

• 20% Down Payment: Put down at least 20% of the car's purchase price.
• 4-Year Loan: Finance the car for no more than four years (48 months).
• 7% of Income: Ensure your monthly car payments are less than 7% of your gross income.

Aside from that, you also have to take note of other expenses involved like gas, insurance, and maintenance. Be prepared for the amount paperwork involved in purchasing a car, including securing the vehicle title, registration, and insurance.

Regular maintenance is also essential to keep your car running smoothly, which includes oil changes, tire rotations, and unexpected repairs. Additionally, ensure you have a safe and secure place to park your car, as parking costs can add up, especially in urban areas.

It’s crucial to weigh these considerations before committing to a car purchase. Remember that this is not just a one time, big time purchase because it will affect your finances for years. Hence, it might be wiser to explore more affordable transportation options until your financial situation improves, because that would also affect your chances of being approved for a loan.

3. Secure financial pre-approval.

To streamline the car buying process, it is crucial to get pre-approved for financing. This can be done through local or national banks, credit unions, or online lenders. Pre-approval helps you understand what cars you can afford by revealing the interest rates you qualify for, which influence your monthly payments. It also allows you to address any credit issues beforehand.

A key advantage is that it protects you from higher rates often offered by dealers, who may mark up the interest rate to earn a commission.

ALSO READ: The First-Time Buyer's Guide To Car Loans

4. Establish your needs when selecting a car.

Different models come with different features. Let’s say you have finally decided to buy a car: it is important to ensure it meets your specific needs. Make sure it aligns with your priorities *and* fits your budget.

Making a well-informed decision is necessary when purchasing the specific car you have your eye on. Research if the build can handle your daily driving conditions, for example. Check if the seats are comfortable, the trunk is spacious, and if you can easily access the spare tire.

You Can Never Go Wrong With Proper Planning

Purchasing a car should not be romanticized. It is a significant financial decision because it involves your hard-earned money. Therefore, it is essential to do proper planning and research as you don’t want to experience unnecessary drawbacks once the purchase is made.

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