What to Know About Buying Your First New Car


No matter how old you are or what the specific situation is, buying your first new car is exciting but probably a little overwhelming too.

When you buy a new car, you’re making a big and long-term investment.

With that in mind, the following are some of the things to know before you start the process.


Your biggest priority when you choose a new car is likely going to be safety. You can use the IIHS and NHTSA crash test data and research to learn more about the safety of a particular type of car. They do head-on and side-crash tests and test specific features like roof strength tests.

Some of the safest cars for the 2020-21 model year based on crash tests and independent safety ratings include:

  • Toyota Camry (this is ranked the safest car in the world)
  • Honda Insight
  • Kia Optima
  • Subaru Impreza
  • Honda Accord
  • Mazda 3
  • Hyundai Veloster
  • Mazda 6
  • Nissan Maxima
  • Toyota Corolla

A lot of even inexpensive base model vehicles are now also coming equipped with advanced safety features.

Know What You Need

When you’re buying your first car, you need to think honestly about what your needs are and how you’re most often going to use the vehicle.

For example, do you need a cheap, efficient way to get to school or work, or are you someone who loves outdoor adventures? How much are you going to be driving, who will be in the car with you, and what will you be doing when you’re in your car?  Car inspections can save you a lot of time and money when buying a car. Find out if pre-purchase inspections are worth it here.

Financial Considerations

Cars depreciate quickly, which means they lose their value. If you have the ability to pay in cash, that’s financially the best option any time you’re buying a vehicle.

If you can’t do that, it’s okay, but you do need to establish a realistic budget based on what you can afford to pay each month.

When you decide on how much you can pay, then you should check your credit score. You can do some online research based on your current credit score to figure out what you might pay in interest.

If you’re a first-time car buyer, your biggest issue might not be that you have bad credit, but just that you have limited credit. That is going to mean you’re probably going to pay a higher interest rate.

You should aim, even if you aren’t buying the car outright, to pay at least 20% down.

Loan Preapproval

If you’re going to use financing for a new car, then you should get preapproved before you go to the dealership. This is going to help you know what rates you’re going to qualify for, and you might be able to use your preapproval as a negotiating tool.

If you go to a dealer, they might also want to compete for your business by offering you a lower interest rate than what you’re preapproved for.

If you get preapproved, you should get a certificate or a check you can take with you as you car shop to show proof of financing.

When you’re going through the preapproval process, try to apply with at least three lenders. This will help you make sure you’re getting the best rates, and if you apply for financing from several lenders within a two-week period, it will only show up as one pull on your credit report.

Choosing a Model

Safety, as was mentioned above, should be the most important consideration when you choose a new car, and second to that is your budget.

Beyond that, as you’re choosing a model, you want to use online resources like Kelley Blue Book and Edmunds. You can do in-depth research into the models on your shortlist. You can find out how people feel about these vehicles when they have them and learn more about things like repair costs and fuel efficiency.

Going to the Dealership

If you’re going to the dealership, you can check out their inventory online first. You can also talk to them by email or text before you go and let them know what you’re interested in, but you don’t have to handle everything in one day, and you shouldn’t.

Instead, give yourself time. Go, do some test drives, and don’t initially discuss price.

Finally, once you’re ready, then you can start to negotiate. Don’t tell a dealer how much you want to pay per month. Base your negotiations on the car’s total price because otherwise, you might end up with a lower monthly payment but a longer, more expensive loan.

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