12 Tips For First-Time Car Buyers

By Remar & Will

In the following article, you can find some help and useful tips you might want to read before you start buying a car. You don't have to; you might want to do it though.

And what if you don't?

Nothing really... You might blow a couple of thousand dollars, that's all...

Basically, we've got some good news for you, but also some bad. And as you might have expected, there's more bad news than good.

The good news:

There's nothing better than getting your first vehicle! It's a moment you'll never forget!

The really bad news:

  • As a first-time car buyer, you are probably going to pay a lot more for your vehicle, more for financing, and more for your insurance than anybody.

    How much more?
    During the undercover filming of a one-hour NBC television special, Dateline, we watched a 21-year-old college student pay $9,200 more than she needed to when she bought and financed a $23,000 car. Would that ruin your day?
  • As a first-time car buyer, you're probably going to get the wrong vehicle, or a bad vehicle, or both, unless you're careful and really smart.
  • Finance your first car wrong—for instance, agree to pay more each month than you can really afford—and you can ruin your credit for many years, just as you're starting to build it. First-time car buyers by the tens of thousands do this every year.

All these fun things may happen to you because you're young and a first-time car buyer. That may not be fair, but it is the reality of the car business:

  • The car dealer's job is to sell you the car they need to sell at the highest possible price.
  • The car dealer's job is to worry about dealership profit.
  • The dealer's job is to make lots of money on you so that the dealership will prosper.

Which leads us to these handy Car Tips from FoolProof. They work whether you join this credit union or not!

FoolProof: 12 Tips for First-Time Car Buyers:

1. Slow Down!

Approach the car buying business like you approach a very appealing new date. You know how careful, even hesitant you can be when you see a fascinating stranger? That attitude works really well when it comes to the car business!

2. Don't depend on the seller of a vehicle or vehicle financing to "educate" you about their business.

Lots of car people are going to want to spend time with you the moment they think you have money, or have a parent who will help you get your first car. But even the most honest seller can't really help you. So what's the message? Don't even go near a car lot until you've done your homework!

3. Don't think you have to spend a fortune to get a good car.
You don't. Many times, the best car can cost a couple of thousand or less. But there are two rules in the car business that make it very hard to buy a good, cheap car:

  • Most cheap cars are junk, especially if you buy them from a dealer. The dealers who exclusively sell "cheap" cars are often a lot less reputable than other used-car outlets. Plus, these sellers usually try to make too much money on their customers.
  • Looks don't tell you anything about the reliability of a vehicle. This is true about all vehicles, but it's more real if you're looking for a really inexpensive car.

    So, how do you buy a cheap car the right way?
  • First, you buy it from an individual, if at all possible. (And not one selling on the curb of a vacant lot—usually a con.)
  • Second, you buy the simplest car you can find. For instance, if you're buying a fifteen-year-old car, don't buy one with lots of options that can break, like power windows.

4. Never buy a vehicle without checking out the cost of collision and liability insurance before you buy it.
Did you know that in many states it can cost you five times as much to insure an eight-cylinder 2-door sports car than it can to insure an identical car with a four-cylinder engine? Sellers of cars generally don't tell you things like that. FoolProof can tell you what affects the cost of insurance.

5. If your first car is going to also be your first major credit experience, don't blow it!
How you pay your first loan—even if that loan is in your parent's name or guaranteed by your parents—will affect your ability to get credit for decades. Do this right, and you'll never regret it. "Right" means never financing without comparing the dealer's contract to this credit union's contract. We'll tell you how to do that in a minute.

6. Never buy your car on your first visit. All dealerships want to sell you the first time you visit them.

Why? They make a lot more money if you don't have time to compare their deal.

7. Never fall for "spot" delivery.

When dealers are making a lot of money on you, they just love to send you home with the car the minute you sign the paperwork. Don't fall for it! Spot delivery means your emotions, not your wallet, are ruling the transaction.

8. Never buy a used car without having it checked out by a mechanic.

Most first-time car buyers spend all their money on a car, then don't have repair money for the almost inevitable problems any used car will have. Don't be that dumb: find out what's wrong with the vehicle before you buy, then budget the money you'll need to put it in good working order.

9. If you're buying used, never automatically finance with the dealer.

Here's a way to always know who is cheaper: Insist that the dealer gives you a copy of their finance contract and bring it to this credit union. If our contract isn't cheaper, we'll tell you.

10. Remember that the price of the car isn't where most sellers make their profit.
The profit is made on add-on charges. Everybody will sell you a car cheap, new or used, if you know how to ask. But those same sellers can make thousands on you in other charges. We won't let that happen.

11. Talk to us before you shop.
The minute you start thinking about new wheels, stop by one of our branches. We'll help you plan your auto attack.

12. Research your options.
See if there's more sources you need before you can buy yourself that car, don't rely on just one.