We are going to share with you how to buy your first car in Canada with some simple tips that should make the process easier and more clear.
It’s perfectly natural to feel excited; buying a car is a major milestone in your life, so be sure to follow these tips, and you will have no regrets going forward.
Best Qualities in a First Car
Low price: If you’re looking for your first car it’s most likely that you’re not loaded with cash at the moment, which is one of the many reasons that finding a low priced first car should be one of your top priorities.
The other reasons are that everything is going to be more expensive on your first car, as a new driver your insurance premium will be significantly higher than usual, and should you need to get a loan in order to buy the car you can expect a significantly higher insurance rate as well.
The used market is where you’re going to want to focus your search, since they are much more likely to be within your price range.
Easy to drive: Just because you aced the test doesn’t mean you have to start challenging yourself as well. When picking your first car you want to make sure that it’s something you feel comfortable driving, after all even though you’ve passed the test you still have plenty to learn.
For most people that means an automatic but there are some people who feel more comfortable with a manual gear change. Only you can define what’s easy and comfortable for you, which is why you should always take a test drive before you buy any car.
Very reliable: The last thing you want to do is to spend half of the time with your first car under the hood trying to figure out how to fix some annoying problem, you’re looking for a car that’s highly reliable and will last you a long time.
You’ll likely want to hold on to your first car for as long as possible and maintenance costs can start to pile up if you accidentally buy a lemon, so when you go to look at the car it’s a good idea to bring along a friend with more knowledge of car mechanics and the warning signs to look for.
Make it good!: Your first car is also important just for purely selfish reasons, it’s your first car and likely the one you’ll always remember, so you should probably make it something good.
Remember that what’s cool to other people doesn’t have to be cool to you. The most important thing is that you like the car, everyone else’s thoughts are their own business.
How to Save Money When Buying Your First Car
Set a budget: All of us agreed that setting a realistic budget for your first car is best done first. It sets expectations and helps prevent you falling in love with something you cannot afford, or overspending on something you don’t need.
Whether you buy your first car using cash using cash, an auto loan or a mixture of the two, budget setting is essential.
Save for a down payment: If you don’t have savings and aren’t in a rush, put some money together for a down payment. It’s not required, but we highly recommend using as much of a down payment as you can comfortably manage.
You have to balance waiting to get a car with the benefit of a down payment. Only you can assess when that might be but we would recommend as much of a down payment as you can manage.
Make sure your income is stable: Usually, what happens is a person just graduates from university and lands a job in their field.
They look at their monthly salary and figure they will buy a car to celebrate the new job. What you may not realize is there is more to owning a car than just making the monthly payment.
Maintenance costs can add up; if you are buying a new car, whether EV or gas-powered, it will require periodic maintenance, which isn’t free. If you don’t properly maintain your vehicle, it will cost you more in the long run, so this is something you cannot ignore.
Fuel costs are at all-time highs: gas prices are at unprecedented levels and continue to increase. While we could debate the causes, the reality is that you will need to dig deep into your pocket if you want to drive anywhere. Ev’s fuel costs are significantly lower, but you need to determine if there is adequate charging infrastructure based on where you live in Canada.
Your income needs to cover all of your current obligations plus the new car payment and still have some cash left over for emergencies.
We are not trying to be a buzzkill, just wanted to let you know what to expect when you buy your first car!
Work on your credit score: Suppose you are confident your income is enough to cover your obligations. In that case, the next thing that lenders are going to focus on is your credit score.
Your student loans and other consumer debt will appear on your credit report, so if there are any skeletons in your closet, now is the time to deal with them.
Start by paying down your debts as much as possible. The less debt you owe, the less of a credit risk you appear to prospective lenders.
Typically, lenders like to see borrowers with a credit score of 700 to get the best interest rates.
If your score is under 700, there is some work to do, but you can still get a car today if you really need it.
Research your options: Research your vehicles and your Beamsville auto loan options. Shop around, read reviews, check out dealerships, take test drives, watch videos on YouTube and do whatever you need so you’re fully in the picture about the car you want.
Do the same for auto loans. Check your credit score and then check your options. Shop around, check out the various deals and see what you can borrow and at what rate.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!