From browsing different makes, models, and colours to imagining yourself behind the wheel of a particular vehicle and test-driving preferred cars or trucks, the car-buying experience is fun and exciting. All first-time car buyers can't wait until they can drive off the dealership lot and show family and friends that they are the proud owners of a new car.
But wait—there's more, unfortunately. Before you decide to take out a car loan, ask yourself these five questions:
- Can you comfortably afford monthly payments on your car loan? Do you expect your monthly income to increase or decrease in the future?
- Can you afford the car insurance assigned to the type of car you are buying?
- Did you check the Kelley Blue Book value of the vehicle?
- Did you research the vehicle history report?
- Does the dealership offer an extended warranty on the car?
If you haven't considered these questions yet and are on the verge of buying a brand-new or pre-owned vehicle, take a minute to read these tips for first-time car buyers recommended by Canadian lenders, your friendly car salesperson, and car insurance agencies.
Quick Guide to Buying Your First Car: Making Informed Decisions About Your Car Purchase
- Check your credit score before applying for a car loan. If your credit history shows multiple issues, consider improving your credit score before buying that car. Lower credit scores offer limited options for auto loans with high-interest rates.
- Saving enough money to make a down payment on a new or used vehicle will reduce the amount you need to borrow from a bank, credit union, or other lender.
- Obtaining pre-approval from a lender makes the car-buying process more straightforward. When you find the right car, you won't have to wait for a loan application to be approved. In addition, you will know loan term specifics ahead of time.
- Do your research! Go online and explore car purchase prices, safety features, fuel efficiency, insurance premiums for specific car makes and models, depreciation value, and other factors relevant to your budget and lifestyle.
- Always check vehicle history reports. Carfax offers valuable information about past issues with cars, such as accidents, number of owners, title problems, and other possible problems.
- Develop a precise budget for your car purchase. In addition to monthly payments, don't forget to include registration fees, sales tax, regular maintenance (some cars need more maintenance than others), and fuel efficiency (especially if you have a long commute to work).
- Avoid using a credit card to make up the difference between what you can afford and want to buy. Do you need a brand-new car? Canadian dealerships like FFun have hundreds of excellent used cars that require much smaller down payments.
Private Seller vs Dealership: Which is Better for First-Time Car Buyers?
When buying from a private seller, you'll likely face higher car prices and less negotiating room. Private vehicle sales won't come with a warranty, and you can't be sure the seller isn't misrepresenting the car's condition.
Unlike dealerships, private sellers do not offer financing options if you can't get a car loan. Moreover, don't expect a private seller to offer upfront incentives like extended warranties, maintenance services, or vehicle inspections.
Visit an FFUN dealership in Ontario and Saskatchewan and get started on test driving and buying your first vehicle today!
