Buying your first car is one of the most exciting experiences in life. Whether you buy brand-new or lightly used, putting yourself in the right position will make the process extra enjoyable.
To give you a leg up, our expert team at AcceleRide® has gathered all the best tips for financing your first car. Take a look at the tips below before downloading our mobile app today!
Next to buying a home, picking out a car is often one of the bigger financial decisions you’ll make in life. For best results, follow a few of these tried-and-true methods so you can enjoy the highest guarantee of success:
Buying a car starts long before you visit the dealership. You’ll want to make sure your credit is in tip-top shape when it comes time to put your money down. The better your credit, the better interest rate you’re likely to get for your loan.
If you don’t currently have any credit history, start building it by opening a credit card and making payments on time. You’ll also build credit by paying utility bills and rent on time.
If you have some work to do to improve your credit, you can analyze your credit history for discrepancies, lower your credit utilization to 30% or less, and pay off any outstanding debts if you can.
Once your credit is in a good place, it’s time to start thinking about your monthly budget. First, figure out the amount of your monthly take-home pay—the amount of money you make after taxes. Then, calculate 10% to 25% of that figure, and that number should be the cap for how much you spend monthly on car payments.
The monthly budget you set for yourself isn’t just reserved for your loan payment, though. Be sure to build in other possible payments you’ll need to make related to your car, like fuel, insurance, and maintenance.
In addition to the monthly payments you’ll be making, you’ll also have to provide a down payment. How much you put down initially is largely up to you, but the more you put down, the better.
For used cars, it’s recommended that you put down at least 10% at signing. However, every dollar you use for your down payment will be exempt from the interest rate on your monthly payments.
Say you’re buying a used car priced at $20,000 and you make a 10% down payment of $2,000. The other $18,000 will accrue interest while you’re paying off the loan. If you put down 20% ($4,000), you’ll only accrue interest on $16,000 of your loan.
There are a lot of different lenders out there, including banks, credit unions, and even dealerships themselves. Plus, the internet makes it easier than ever to explore and compare your many options in a fraction of the time.
First, find a used model you’re interested in and use Kelley Blue Book® to determine its value. Then, take your credentials and information about the model you like to several lenders to get quotes. Be sure to do all your applications within a day or two to reduce the number of hard inquiries on your credit.
Supply and demand plays a big role in the automotive world with certain times of year being more popular for specific types of vehicles. Do you need an SUV with 4-wheel drive? You might want to start looking well before the chilly winter months arrive.
Location can also affect the types of vehicles available to you. For instance, you might have an easier time finding a wider selection of pickups if you live in a rural area as opposed to the big city.
The good news is that, thanks to our nationwide network of dealerships, you’re never limited by time or geography.
From banking and clothes shopping to reviewing the best ice cream parlors in town, so much of your life is already done online. So, why not finance your next set of wheels online, too? With AcceleRide®, you have complete control over the buying process, making it easier to secure a plan that fits your lifestyle.
Once you settle on the perfect make, model, and trim, use our easy-to-navigate toolbar to compare payment options. Be sure to also take advantage of our Payment Calculator, While on our site, you can adjust your down payment, check your credit score, and even apply for pre-approved financing.
Need time to think about it? Thanks to our secure site, you can save your progress and return to it when you’re ready.
You deserve your first car to be one you love for years. That’s why we offer a 5-Day/250-Mile Money-Back Guarantee.* So, if after a few days you decide your vehicle isn’t the right fit, we’ll take it back with no questions asked.
For more details, please don’t hesitate to contact one of our friendly experts who’ll be happy to lay out your options.
Now that you have all the information you need to get the job done, we hope you’re ready to dive in to your used car shopping journey. At AcceleRide®, you can find and finance your next used car all from the comfort of your own home.
Browse the thousands of used cars we have available right on our website. When you find one you love, a member of our finance team will help you find the best finance option for you!
* Not available in California or Louisiana.