Doing anything for the first time can be an overwhelming experience and being a first-time car buyer is no exception. No matter what stage of life you’re in—whether you’re a student, a working professional, a stay-at-home parent or otherwise—buying a car for the first time is a huge decision, not to mention a huge financial commitment.
To help ease you through the daunting process, we’ve compiled a list of key points to think about before, during and after your first car purchase. From budgeting and research to test driving and ultimately purchasing, we’ll go through the A-Z of buying a car so you’ll feel confident and prepared when you jump into first-time car ownership.
1. Budget, budget, budget
It’s certainly not the most exciting aspect of preparing to buy a car, but figuring out what you can actually afford to spend on a vehicle is one of the important things you can do before shopping for a car. There are a lot of factors at play here, so let’s dive in.
First, calculate how much money you bring in on a monthly basis, whether that’s from one full-time job, a series of part-time jobs, freelance work or whatever source of income you may have. Then subtract all of your fixed expenses, such as your rent or mortgage payments, groceries, internet, cellphone, etc. (and don’t forget to allot some for savings!). Look at what you have left—that amount is what you can reasonably afford to spend on a car including your payments, gas, insurance costs and any expected (or unexpected) maintenance.
It isn’t advisable to stretch your budget too thin, so remember when you start to shop to stick to the number you gave yourself. Be firm with any salespeople you deal with when you discuss your maximum price.
2. Financing is important when buying your first car
Part of your budgeting process should also include researching your financing options. If you don’t plan on paying the cost of the vehicle in full right away, you’ll need some kind of financing. Financing, when it comes to buying a car, means getting a loan from either your financial institution (like a bank or credit union) or through the dealer where you buy your car, such as RightRide, the finance division of AutoCanada.
You’ll get a certain amount of money as a loan and pay interest on that amount to whomever you borrowed the money from. How much money you borrow, how much time you take to pay it back and your interest rate will all affect your monthly payment. Some lenders take credit scores into account in a heavy way, but even if you have bad credit, it’s still possible to get a loan. You can take measures to improve your score such as opening bank accounts, getting a credit card and making payments on time. You can also look into smaller car loans for first-time buyers with no credit.
3. Assess needs vs. wants
Sure, it would be nice to have an all-leather interior, a sunroof and a booming sound system, but do you really need all of that? Part of the vehicle-selection process is going through your list of wants and deciding which of those are actually needs and which ones you’re willing to compromise on.
Think about how much you drive and what kind of driving it is. Is it mostly city driving or are you on the highway a lot? Will you be alone in the car most often or do you need to accommodate children or other family members?
Think about the cost of insurance for different vehicles and what purpose they serve and decide if that matches with what you need a vehicle for. Do you haul a lot of things and need a truck or van? Or can you get by with a smaller sedan or hatchback? Think about parking, both at home or at work and how much you want to spend on gas. Be practical about your decision and don’t let bells and whistles pull you too far away from your original intent, or, for that matter, your original budget, because those extras add up fast.
4. Research is your best friend – how to buy your first car
Given the amount of information at our fingertips these days, there really is no excuse to not research your potential vehicle thoroughly. Read a lot and ask a lot of questions. If you don’t have someone in your life who is a car guru, do not underestimate the power of an internet group; they can provide loads of information. Head to Reddit and dig around in car groups to see if anything has been posted about the best cars for first-time buyers. If not, start a chain and ask some questions. Most often, you’ll get fairly honest feedback.
Or if you like to read, go pick up a few car-specific publications. They often have review sections with information and specs and favour listicles that numerically rank the best vehicles in certain categories. This may be a good place to start in terms of narrowing down your focus, because let’s face it, there are so many options out there and it’s very easy to get stuck in the weeds. You can also research specific dealerships and salespeople to learn about other people’s experiences, especially if they would recommend shopping with them (or not).
5. Find a dealer you like
Not every car will be a match for you and not every dealership will be either, so shop around! If you feel uncomfortable with your interactions, move on to a different one. If you feel in your gut that you want to work with a particular seller, trust your instincts. The way you feel about the people selling you a vehicle will change the way you interact with them and especially as a first-time car buyer, you don’t want to feel pressured or pushed in one direction or another, or worse, pressured into a purchase if you’re not quite ready.
If possible, take someone you trust with you—it’s always easier to approach these types of situations if you have some emotional back-up in your corner and someone to bounce ideas and thoughts off of. A second opinion never hurts.
6. Take ‘er for a test drive
Overall, the most important thing is how comfortable you feel behind the wheel of a vehicle which is why a test drive is so, so important. A vehicle may look perfect on paper, but as soon as you slide into that seat, things may change. And once around the block probably won’t cut it—see if you can go on a 10-15 minute drive (or even longer, preferably!) to really get a feel for what it will be like during everyday use. And if you don’t like it, speak up! You can’t hurt a car’s feelings and you certainly don’t want to be stuck with a vehicle you will be nervous to drive. It pays to be picky, so until you find just the right fit, don’t settle for something that’s only OK.
It’s also a great idea to get the car inspected if you’re buying used from a private seller or a dealership. Take the car off the lot and get it inspected by a trusted, impartial mechanic. Whatever extra cost is incurred will ultimately pay off big time if there are issues under the hood; it could end up saving you thousands, not to mention the headaches that come along with constant car problems.
7. There’s usually wiggle room on price
Once you’ve landed on a make and model you think will be the best fit for you, start doing some serious research on the purchase price. There are plenty of resources that can give you a decent ballpark figure that others in your area paid for a similar, if not exactly the same, vehicle. Take into consideration the mileage, year, condition and any extra features the vehicle has such as a sunroof or tinted windows. Once you land on a number, subtract 15 or 20 per cent, present that to the dealership as an offer and negotiate from there as needed.
Believe it or not, there are better months of the year (December), days of the week (Wednesday) and even specific days (January 1) that are the best time to buy cars, so plan ahead and make sure the odds are in your favour when you walk in.
You can also ask if there are any extras the dealership would be willing to include for free if the purchase price is set in stone. We’re talking all-season interior mats, a set of winter tires, an exterior protection package or something along those lines. You may get rejected but it doesn’t hurt to ask!
8. Read the contract
Always—let me repeat that for those in the back—always read your contract! Every word of it. And if you don’t understand part of it, go find someone who will read it and explain it to you. There is no shame in admitting you are confused or you don’t understand when it could make a financial impact on you. There could have been a miscommunication and extras added without your consent, extended warranties or extra insurance could be tacked on without your knowledge or any number of other unexpected (and sometimes unwarranted) costs.
Once you sign the dotted line, you’ve entered a legal agreement with the seller. Take your time and remember there is no rush. It’s better to know the ins and outs of what you’re signing than be surprised by the fine print later.
9. Closing the deal
So you’ve chosen your vehicle and worked out the terms with the seller—what now? Well, if you’re going through a dealership, the folks there will be able to guide you through the final steps and will make sure you know how much your payments are, when they are due and when they’ll be taken out of your account. If you’re purchasing through a private seller, it’s important to know each province has its own regulations when it comes to buying and selling a vehicle. One quick internet search will dig up all the information you need. When in doubt, call your car insurance provider.
10. You don’t have to use a dealership for servicing
When it comes time for your car to receive regular maintenance, know that you can take your vehicle to any trusted mechanic—you’re not obligated to have your vehicle serviced at the dealership just because you bought it there.
Make sure to keep all your receipts when you’ve had service elsewhere, as those might come in handy later if you need to show your dealership a record of service. However, if you buy a new vehicle and some major mechanical problem comes up such as a malfunctioning part, contact your dealership to see if you’re still under warranty. There’s a good chance you’ll be able to get it fixed without incurring any cost to yourself.
And here’s a bonus step for you:
11. Enjoy your purchase!
Buying a car for the first time is a major life milestone and even though the process can be long and intimidating, the result is well worth the time you put into choosing the right vehicle for you. There’s nothing quite like holding your own car keys and pulling off the lot for the first time, so try to enjoy each step and remember to pat yourself on the back for your accomplishment.