If you are a first time buyer, there are many points to consider. The total cost of ownership is not just the price of the car. There is also gas, insurance and maintenance that will add to the overall expense. Car insurance on new cars tends to be higher than on used cars. Lack of credit history on your credit report can pose a challenge to getting a loan.
It might be in your best interests to establish some credit by getting a credit card or a department store credit card first, making small payments and paying back the money in full and on time each month to show potential lenders that you are a responsible borrower. However, proceed down this route with caution to avoid getting into unmanageable debt. A co-signer is another option, but there are lenders willing to finance those will little credit history as long as they are deemed credit worthy with a stable job and with the same address for a long period of time.
Additional car buying considerations are whether to buy a new or used car. Certainly nothing can replace the ?new car? feel, but buying a used car comes with its advantages. First, the overall cost of the car, depreciation, insurance and taxes will be lower. Rental cars are a great possibility as they generally offer no-haggle sales and the cars are maintained regularly for safety purposes.
If you are buying a used car from an individual, make sure to have the car inspected by your mechanic; take it for a test drive and do a vehicle history check. If you are buying from dealer, it is wise to check into extended warranty options. Beware of the ?as is? clause, as you might get stuck with repairs and other expenses after you drive it off the lot. The benefit to purchasing a new car is that often the safety and safety equipment on a new car is superior to that of a used vehicle.
Sometimes it makes sense to lease a car instead of buying it. When you lease a car, you will usually pay less monthly payments and at the end of the lease term you either return the car or can opt to purchase the car. If you decide to buy the car, you will end up paying a buy-out charge. Leasing a car might be the right choice if you can keep within the annual mileage, want a lower monthly payment, like driving a new car and do not want ownership. Buying a car will involve higher monthly payments, but you will build up trade in or sales value, and the car belongs to you. It will also be a less expensive choice long term.