What Every First Time Car Buyer Must Know

(This is a guest article by William Eve*)

There is lots of info for first car buyers. You might think that the most important things to know before you buy a car are which ones have the best gas mileage or were voted the best in safety standards but that is only a small part of buying a car. More important then the actual vehicle is figuring out how you will pay for it. You might not have thought of it, but if this is your first new car purchase it is quite likely the largest purchase you have made to date. It might also be the first time that you put your credit file to test in hopes of getting a low interest rate and reasonable terms for your car loan.

As this is often a significant purchase in your life it is important to understand how buying a car works and what you can do to get the best deals. The first step is to get a copy of your credit file. All you need to do is contact one of the credit reporting agencies and request a copy of your file. Hopefully you will find that your file is free of blemishes and your score is good. If you have that you will be able to secure a good rate before you go car shopping. This is an important step because you can go into a car dealership pre-financed, knowing what you are able to afford and what rate your credit score entitles you. Usually you can gain this kind of approval online or by visiting your local bank.

Important Info For First Car Buyers

Settle on a price - The first step in purchasing a vehicle is to find the one you want and then settle on a price for it. Most people do not pay sticker price for a car because you can haggle with car salespeople and usually get a much lower price then the one listed on the window. Take into account when you figure out a price that you will pay a bit more because of interest and other fees, this is info for first car buyers that is often forgotten.

Negotiate on financing - Most car dealerships are able to offer financing through an affiliated bank. When you are first taken back to meet with the sales manager he will try to get you to settle for a higher interest rate then you are probably eligible. This is in the car dealerships best interest, but not in your best interest. Keep pushing to get a lower rate until he meets or is less then your pre-approval rate. Even if the car dealership offers the same rate be sure to check on the terms of the loan to make sure getting it through the dealership is the most cost effective.

Look for other ways to negotiate - Many first time car buyers do not realise that the sales price and the interest rates are not the only chances to negotiate. The sales manager will also try to get you to buy things like an extended warranty. Typically the prices for these things are also not set in stone meaning that you can also negotiate them for a lower rate. Do not be afraid to haggle with the car salesman or the sales manager, they expect it and know exactly how little they can charge for any of their products or services. Odds are the numbers are lower then you think.

By taking note of this info for first car buyers you can ensure that you get a great deal. The first step is to arm yourself with your credit rating and find out on your own what kind of interest rates you can get. Do not let the car dealership dictate your interest rates, if you do you will likely wind up spending more then you should to finance your vehicle. As always, work hard to maintain a good credit file so that the best rates and terms are available to you. If you find that your credit file contains negative marks you might even want to work on improving it before you purchase a card. Although it will put off your purchase, improving your credit score before you get a loan can save you loads of cash.

*About the author: This article was written by William Eve who is a regular personal finance writer for Home Loan Finder, a 100% free mortgage comparison and application service. Whether a first home buyer or investor, visit the Home Loan Finder website for more quality information and guides on competitive mortgage products.

*Image Credit: Photograph by cseeman [via Flickr Creative Commons]