Used cars are the choice of many first-time buyers
The process of buying a car is exciting, but weighing what kind of car to buy, where and when to buy may be overwhelming. Nowadays, when many people use their cars longer than ever before, it is important to choose a suitable car. When you buy your first car, use these skills so that you can take the initiative in the whole experience.
How much should your first car cost?
The first step to buying your first car, you can even do it before studying the model and brand: carefully check your budget. Some people can buy a car with cash, while others choose to rent a car or borrow money to buy a car. A budget allows you to realistically consider which method is the most reasonable, what your price point should be, how much you can spend on gasoline, regular maintenance and car payment per month (if you are financing or leasing).
How will you pay?
If you plan to apply for a car loan, a down payment can reduce costs, and a higher than average down payment may also reduce the loan interest rate. Generally speaking, the reasonable term of automobile loan is 5 years (60 months), but the lender also provides a longer term (72 to 84 months or more). A longer term may be tempting because you owe less each month, but think twice before committing to such a deal – when your car depreciates, you may end up paying more overall interest.
How will you insure?
Another budgetary consideration for buying a car is insurance. The cost and age of your car can affect your car insurance premium. In 2019, the average price of a used car is $20683, while the average price of a new car is $37200. If these prices are higher than the planned expenditure of your first car, please rest assured that there are a large number of vehicles available for purchase, which is far lower than these average prices.
Cars such as Toyota Camry and Honda Fit, which have been used for three years, and SUVs such as Honda CR-V and Chevrolet traverse, which have been used for six years, sell for less than $15000. Older but reliable cars and Toyota RAV4 SUVs cost less than $10000.
Should your first car be new or old?
Considering your budget, it’s time to consider whether your first car is a new or used car. Here are some variables to keep in mind when weighing your decision:
cost
guarantee
History of automobile
security
depreciation
comfort
Buy a new car
Although the potential cost of a new car may be daunting (the car itself, plus insurance), don’t take the proposed sales price at face value. Dealers can provide incentives similar to cash back transactions, or provide interest free financing to people with good credit.
A new car also has no bad history to worry about, may be equipped with the latest safety features, and should include warranty at the sales price. However, given the value of a new car, it is crucial to understand how quickly it depreciates. In other words, once you drive a brand-new expensive car out of the parking lot, it usually loses its relative value faster than a cheap car. However, if you can buy a new car with cash or a considerable down payment, depreciation will not be your primary consideration.
Buy a used car
Used cars are the choice of many first-time buyers. They want to buy a car, but they don’t want to spend too much money. A used car obviously has a history, so the buyer must obtain a vehicle inspection report before buying, and the mechanic will evaluate the vehicle.
Buying a used car may not include a warranty. In addition, when it comes to surface features, such as color, buyers have fewer options (considering that you will see and enjoy your car in the next few years, it may not be so surface).
