Buying your first car can be exciting, but nerve-wracking. What should you buy? Where should you buy from? Why is there so much paperwork? Between researching the right car for you, financing and reading the fine print, this fun adventure can seem more like a dreadful experience. The good news is, it doesn’t have to be. Let’s break down some tricks and tips to help you feel more confident on your auto journey, and how we can help.
BUDGET BEFOREHAND
This is surprisingly the most important step, and many people tend to forget it. That is, until they are sitting in front of a salesman and frantically trying to calculate in their head an affordable payment. Review your finances prior to shopping to determine a monthly payment that best fits your level of income. Don’t forget to budget in the cost of car insurance, as well as the initial registration fees at the courthouse to get your new vehicle titled into your name. Both amounts can vary depending on the kind of vehicle, as well as your age and driving history.
WANT VS. NEED
While those shiny, sleek vehicles with all the bells and whistles will impress your friends, it definitely won’t impress your bank account. Not with the large payments that come with it. Look realistically at your needs. If you live somewhere that looks and feels like winter for most of the year, a low-riding, two-wheel drive vehicle might not be the best investment, unless you’re looking to become best friends with the local tow truck driver. If you’re on the road for work often, something with great gas-milage would be better than a gas-guzzler.
RESEARCH
Once you set your eye on a particular vehicle, request the VIN (vehicle identification number). There are free websites online where you can locate an average value and what the car is actually worth. This bit of research will help you negotiate the price and determine if the vehicle is significantly overpriced. You can also use websites, like CarFax, to show you if the vehicle has been in any major accidents or has had any large repairs.
TEST DRIVE
Another important reminder, is to always take the test drive. Take it at highway speeds and through stop and go traffic to see how the vehicle handles while keeping the window open to hear any suspicious sounds. While on your test drive, take it to a trusted mechanic for a quick inspection. They are able to tell you if they see anything wrong under the hood. If the seller or dealership balks at you taking it to a mechanic or for driving it longer than just a few minutes, consider this a MAJOR red flag.
FINANCING
The last thing you want is to be stuck with a loan or payments you are not comfortable with. If possible, make an appointment to see your credit union or bank to line up financing in advance. Once pre-approved, it’ll help you know the price range you should be shopping for. Dealership financing is always an option, but your personal financial institution can typically offer better rates, lower monthly payments and are more willing to work with you if an unexpected life event happens. If you do plan on financing with a dealership and they ask what you want your monthly payment to be, counter the question by asking for the “drive away” cost of purchasing the vehicle that day or convey to them the lowest end of your budget. Also, don’t forget to check the fine print before you sign anything and don’t let them rush you. Take the time and read the documents fully. Make sure there are no add-on charges that you didn’t agree to such as tire or windshield protection or warranties.
NEGOTIATE
This can be incredibly difficult if you hate conflict, but it is important you don’t get taken advantage of. Be polite, yet firm with who you’re negotiating with. If you know the average value of the vehicle you’re looking at and it’s priced over its value, it’s time to negotiate. You can start by asking for a percentage off the price per the vehicle’s value. They may agree, but if not, your next step is to lower the percentage off and continue to negotiate. There’s a good chance you could save a significant amount of money on the purchase with this simple technique. Another helpful negotiation tip is if you see a damaged windshield or balding tires, request that you get the price of a new windshield, or tires knocked off the asking price.
HOW CAN DAKOTALAND HELP?
We know buying your first vehicle can be overwhelming. That’s where we come in. Not everyone has a trusted friend or family member they can go to for help, and you may feel alone in this process. At Dakotaland, you’re not alone and we have extensive experience in getting you the best deal on your first car.
Dakotaland offers a “First Time Auto Buyers” loan to those who have at least six months of employment history and have never had an auto loan on their credit report. This loan offers a set rate whether you have a credit score or not and can be up to a four-year term. Also, you could potentially qualify for up to 95% LTV (loan to value) financing, which means we can finance up to 95% of the value of the vehicle. In addition, to celebrate your new car and thank you for choosing us as our partner, you’ll receive a $20 gas gift card with your approved loan.
If you find you can’t afford a vehicle right now, speak with our in-house financial counselors. With their help, we will get you on the road in no time.