Get helpful tips for every step of your car purchase and to make the best decisions.
Buying your first car can be exciting, but there's a lot to consider. Planning ahead can help make the process easier and ensure you get the car that's right for you. Here are some important points to keep in mind when you start looking for your first car.
Buying your first car can be exciting, but there's a lot to consider. Planning ahead can help make the process easier and ensure you get the car that's right for you. Here are some important points to keep in mind when you start looking for your first car.
Be realistic about your needs
Do you need a car to get to school or work every day, or just for weekend adventures? What is the weather like where you live: is it snowing, raining or hot? Evaluate your lifestyle and the driving conditions you encounter most often. Do your research: Learn about features and options, and how they can affect the price of a car.
Consider your budget and financing
Also, take a realistic look at your finances. That not only includes the purchase price, but budgeting for the use and care of your future car, including maintenance, insurance, gas, repairs, and parking. Learn more about the true cost of owning a car .
A down payment is usually not required for your loan, but making one is a good idea: You won't have to borrow a large amount, and your monthly payment will be lower. (In general, for every $1,000 you put down, your monthly car payment is reduced by $15 to $18, according to Edmunds data from November 2017.) Use Bank of America's auto loan calculator to learn how a down payment can affect your monthly auto loan payment.
explore your options
Buying your first car is much easier than it was for your parents. The Internet offers a large number of sellers beyond your local area (who can ship cars to your area, but for a fee), which can mean more options within your price range. You can search and narrow down your options by looking online at car ratings by car type or safety categories (such as SUVs, hybrids). Learn more about how to buy, and even refinance, a car online .
For new cars, ask several dealers to quote you prices. If you're looking for used cars, be sure to ask about a Carfax report, which provides the history of a used car, including any accidents.
Know your credit score
Your credit score helps determine the interest rate you pay on an auto loan. Better credit can help you get a more favorable interest rate, which in turn will affect your overall car-buying budget. You can also get your credit score for free through your credit card provider.
Review your credit report before you're ready to buy, so you have time to improve your credit score. Visit AnnualCreditReport.com (offered in English only) to get a free copy of your credit report from each of the three major credit bureaus (Experian, Equifax, and TransUnion).
apply for a loan
Although it may seem counterintuitive to search for a car loan before buying one, it can be helpful. It gives you an idea of how much you can borrow (and at what interest rate), which means you don't have to make hasty financial decisions at the dealership. Start with your bank or credit union, then get quotes from other lenders to ensure you get the best rate. Learn more about Bank of America's online resources for buying a car (offered in English only) .
Take a test drive
Once you identify a few cars that might fit your needs and budget, drive each car to see how you like it and to gauge its performance. Try to drive all the cars you are considering on the same day so you can more easily compare them. It's a good idea to call ahead to make appointments to plan your day, and it helps you gauge the customer service at each dealership.
close the deal
You have already done the research, you know what you want and you have the financing ready. When closing the deal you are in control, and you can focus on reading the contract carefully. However, before you sign, make sure you understand the terms of any financing or guarantee agreement.
After you head out in the car, make sure you don't miss a single payment by signing up for automatic bill payments so you can focus on your next destination.
