When buying your first car, you may spend hours poring over the different makes, models, dealers, even colors of your potential new vehicle. Additionally, if you are not financing through the dealer, you may have more negotiating power to lower the amount that your car costs. Read on for our best tips on how to buy your first car.
Determine how much you can afford
The first thing you should do is determine how much you want to borrow. You should calculate how much you are willing to spend on a new car based on how much you can afford. A good rule of thumb is to spend only what you can easily pay over a three-year period.
Shop for a loan before you shop for a car
Once you’ve established your budget, you can begin looking for a loan. Many lenders will not guarantee a rate until you sign the papers, but they will give you preapproval for a loan amount and the current rate. You should begin by contacting your bank. Most banks will lower your payments if you set up an automatic draft. Don’t automatically go through your local dealer for financing.
Look for a car
Now that you’ve established your budget and secured funding, it’s time to actually start looking for a car. You can shop at dealerships, but do not be afraid to look in the classifieds and other online sources. You can find some great deals through these sources. However, if you do decide to purchase your car from a private seller, you should always have your car inspected by a mechanic you trust before purchasing it.
Finish filling out the loan Information
Once you have picked out the car and negotiated the price, you will need to pay for your the car. You can contact your bank with the final details. Generally, they will need the title or vehicle identification number to process the loan. Additionally, you will need to give them the title once you obtain it from the car’s previous owner. If you are securing financing through the dealer, you can work out all the details at the time of purchase. However, be sure you are getting a good interest rate, not signing up for any hidden fees, and read the fine print.
Register your car and transfer the title
Once you own the car you will need to get a new title and tags (license plates) for your car. You can do this at your local FRSC office. Most cities have a FRSC for driver’s licenses and a different DMV for titles and tags.
By Damilola Faustino
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