A Guide to Buying Your First Car
Buying your first car is certainly an exciting time. The rich marketplace with different marques, trims, and additional extras gives you the “kid in a candy store” feeling. Those same factors can also make the best car deals feel elusive and out of reach. How can you be sure to get exactly what you need? Should you favor new car deals or pre-owned cheap cars for sale?
These are the questions that the team here at CarBevy will endeavor to answer in today’s blog. Hopefully today’s piece will act as the ultimate guide for those looking to make a strong first purchase in the automotive world.
New Cars VS. Used Cars
One of the first things to decide is whether you’re going to buy a brand-new car or a used car. New car deals can be exciting and see you drive away in a very special vehicle for a good price, but very often the best car deals are still for those that have been pre-owned. The truth is that neither course is objectively better than the other, it depends entirely on individual circumstances.
First of all, we’ll compare the advantages of each of these categories.
What are the Pros of Buying a New Car?
Obviously with a new car you are getting the very latest version of whatever brand and model you like. It will come loaded with the newest technology, which besides making it more comfortable and fun to drive, make it safer because a lot of that technology is connected to safety and ADAS systems.
Another advantage of buying a new car is the abundance of flexible finance options. This is often absent from used-car sales. Though a new car is more expensive, you can spread the cost easily. In addition, a brand-new car won’t need any costly maintenance in its first few years of life. Besides the gasoline, tax and monthly finance payments, it won’t cost you a great deal more. Connected to this, you won’t have to worry about getting things like an inspection of full vehicle service history with a new car.
What are the Pros of Buying a Used Car?
On the flip side, when you buy used cars you get a great deal of choice. Being willing to buy pre-owned opens up a giant marketplace to you. A perhaps more obvious benefit than choice when it comes to used cars is clearly that of price. The Kelley Blue Book in August 2020 said that the average price for a vehicle in the US is $38,635. After spending all that, you can end up losing a big chunk to depreciation. On average, a new car depreciates by 19 percent in its first year, and half of that happens immediately after taking possession. Used cars don’t suffer the same depreciation trap. While they do continue to depreciate, they do so at a much slower rate.
The quality of used cars has also greatly increased in recent years. As the general standard of cars increases, and the pace at which new technology is adopted also speeds up, the average pre-owned car of three years old is often very close to new in its condition and feel. On top of that, new electric cars have fewer moving parts, which helps to solve the problem of increased maintenance costs on pre-owned models.
New or Used – It Depends
If you plan to buy a car that you will hold on to for many years to come, then a brand-new one is a good choice. If your budget is very important, then you might need to consider a used car. On the other hand, if you want to have all the latest technology options and safety/ADAS gear, then buying the latest thing is the best way to get it. Finally, a used car is cheaper to insure, and are increasingly of a well maintained and high-quality order.
In the end, it all depends on your individual or family needs. The best thing when buying your first car is to be open to all possibilities. In this way, you have more avenues down which to travel.
What to Look for When Choosing a First Car
At this point, you’ve hopefully solved the riddle of new versus used, and are now ready to start your search. You might start with a simple Google search “car dealership near me” and see what it throws up. More likely, you already have some idea what you want and you’re already heading online to check out options.
You might think everyone was flocking to dealership websites for their cars, but in fact data from Autotrader showed that of those looking online to research cars they want, a huge 78 percent of them as an average used third-party sites, while only 57 percent used the dealership site, and 36 percent the OEM sites.
However it is you’re going about the process, here are some important pointers:
1. Budgeting and Finance Options
You likely have an idea of some marques and models that you like, but have you prepared a budget and explored your financing options. The way you pay for the car will have a direct impact on price. The cheapest way to buy it in the long term is to pay cash for it and buy it outright. Finance is cheaper in the short term, but it will cost you monthly for the next 3 to 5 years.
You need to plan a budget that factors in at least all of the following things:
- Monthly finance payment
- Insurance premium
- Gas costs
- Maintenance and repairs (set aside as a contingency if the car is new)
- Registration fee and any other special costs depending on here you live
To help you budget, make use of helpful tools like Edmunds’ True Cost to Own tool or the Kelley Blue Book 5-Year Cost to Own system. Both can give you a better idea of what the car will cost you not just now, but over the next five years, too.
If you’re going to finance the car with a loan, you should also shop around and not just take what the local car dealerships give you. Many car dealerships that also offer finance options count on your not being willing to shop elsewhere and thus will charge you a premium for that sense of convenience. You should look online, inquire at the bank and even look to local credit unions to see what they have on offer. You might get much better choices.
Another reason to shop ahead for credit is that you can get pre-approval on a certain amount, which helps enormously in your preparation of a car-buying budget. It’s nice to enter a buying situation knowing exactly how much you have to spend. It takes some pressure away from negotiation, and means you know clearly when you have a good deal.
2. Choose a Seller
You’ll spend a lot of time exploring various channels for car sales. The two main channels are used or new car dealerships and private sellers:
With a local car dealership, you’ll get simplicity and convenience with many car models to choose under one roof, as well as all sales steps handled in there, too. They are also able to offer you more choice and flexibility on financing, which a private seller generally can’t. On the other hand, it can be harder to negotiate with them as they have tighter margins in which they must operate and can lack flexibility in that area.
The principal advantage of a private seller is the relative speed at which a deal can happen. Sellers are often strongly motivated to move the car quickly because they are invariably selling to raise money for a new car, or to just rid themselves of a car they don’t need. This makes them more open to negotiation. You can also avoid the typical sales patter and upselling pressure tactics employed by salespeople at car dealerships.
It doesn’t have to be a binary choice. What if you could combine the choice and flexibilities available at a car dealership, but also avoid the hassle of face-to-face negotiations and other discussions. That’s something that CarBevy can do for you. On this platform, you input what car you want and what price you can pay for it. It is then shared with pre-approved dealerships, and if any accept, then all you have to do is visit the best car dealership for your needs to close the deal and get your new car.
3. Thoroughly Test the Vehicle
One problem with it being your first car is that you likely have little or no meaningful experience with which to compare a new car. This makes your test drive on the first-time car purchase all the more important. If you’re buying a brand-new car, then not only put the dealership car through its paces, but consider even renting the same model if possible, just for a few days to see how it fits into your regular driving schedule.
You can’t necessarily do this for a used car, but you might be able to depending on its model type and age. It’s an extra expense, but it helps you to determine if you really like the car or not. Regardless of your ultimate decision, thorough testing of your target car is an absolute must.
Whether you’re buying from a local car dealership or a private seller, there’s always some room to negotiate. With a dealership, you could negotiate over the selling price, the financing, what accessories come with it, and more. With a private seller, you can only really negotiate price, but there’s often additional wiggle room with private sellers because they are motivated for quick sales and can self-authorize lower prices, as mentioned above.
In the end, never just accept the initial price. Always try to negotiate. Even if you fail in the end and you finally pay the first price asked, you can remind yourself that you tried.
Conclusion: Shop with Your Eyes Open
In summary, the modern world makes shopping for a new a car easier than before by giving you options. No longer is it a straight-up binary choice of car lot or private seller with a classified. You can now conduct searches online, browsing colors, accessories and trim options in the peace and quiet of home without a salesperson breathing down your neck. You can get your finances together ahead of time, or even use a platform like CarBevy to get the whole deal agreed before you even set foot out of the house.
The key bit of information that binds together everything we have said above is the buyer going into any deal with their eyes wide open. If you only take one thing away from today’s blog, let it be that you should never just take the first car deal that crosses your path. Take time to understand all the choices you have, and then act in an informed way based on your situation.
If you are still unsure whether or not you’ll either buy a new or used car, you can still consider leasing a car. CarBevy has a guide to leasing a car that you can read to know how car leases work. CarBevyv aims to provide buyers a haggle-free experience when looking for a new car to buy or lease. Visit the CarBevy homepage or blog page to learn more.