Is this your first car buying experience? Buying a car means deciding on the budget, choosing a car amongst several different alternatives and working with different lenders to find the best deal. If you do not prepare for buying your first car, it can turn into a confusing, irritating and expensive experience. When people realize that you are buying your first car, they may try to take advantage of your ignorance. Do not fall for common car buying myths. Instead, follow the following time-tested advice; you will come out as a winner.
Time-Tested Advice for buying your First Car
1. Myth – First Time Car Buyers have no Credit History.
Advice – Check your credit score every time you decide to seek credit. Usually, first time car buyers are young college-goers or recent graduates. And, it is for the same reason they believe that they have a non-existing credit history. However, department store cards or small purchases on credit cards can add to your credit score. It is always better to know your financial situation before finalizing a car. Otherwise, a lender may dupe you into accepting high interest rates. So, do not play blind and check your credit score.
2. Myth – First Time Car Buyers have to buy a Used Car.
Advice – It is not set in stone. You can buy any car you wish to buy. Auto manufacturers such as GM provide special College Discount Program to help you buy a car. If you have additional money or you can afford to make slightly higher payments, a new car can be your choice. Think of a discontinued car model or choose a demo car if you want to buy a new car with a limited budget. No matter the car you choose, make sure that you read its reviews online. Take it for test drive and check whether you feel comfortable behind the wheels.
3. Myth –You cannot buy a Car on your own.
Advice – Young car buyer with zero credit history often rely on parents to buy a car. Usually, parents spend money on down payment and/or cosign the loan agreement. But, there are many buyers who may not know anyone with substantial savings to make down payment. And, others may not have anyone with a good credit score to become a cosigner. Do not panic. You can still buy a car. Online auto financing companies customize credit programs to offer no cosigner auto loans and zero money down car loans. You can apply for either of them to make a rapid purchase.
4. Myth – A Part-Time Income cannot get you a Car.
Advice – Income is not the criterion for getting approval on your first car loan. Do not worry if you earn a part-time income. Lenders give more weightage to debt-to-income ratio rather than the amount of your gross monthly income. You can apply for first time car buyers’ program. If you are in college and manage a part-time job, do not worry. If the gross monthly income is below $2000, your chances of approval can be improved with a cosigner and a down payment. Use your savings and cash gifts to manage a down payment. In times of a limited income, you will have to depend on your parents as well.
When you are buying your first car, your mind will be full of doubts. But, by debunking the myths and obtaining time-tested advice, you will be able to make a successful car purchase. So, whenever you are ready to take the plunge, follow the advice and become a stress-free car owner.
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