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Tips for the First Time Car Buyer

Buying a car for the first time may be an overwhelming decision. Should you buy a new or a used car? Should you buy your car or should you lease it? These are just two of many questions a first time car buyer may have. SimplyFinance would like to help shed some light on any gray areas you may need help making a decision on.

If you are a first time buyer, there are some 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. Insurance on new cars tends to be higher than on used cars. Lack of credit history can pose a challenge to getting financed. It might be in your best interest to establish some credit by getting a gas card or a department store credit card first.  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’re 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 the often the safety and safety equipment on a new car is superior to 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 don’t 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.