Guide for Buying Your First Vehicle

Guide for Buying Your First Vehicle

Purchasing your first car is an important milestone for many young Canadians, signifying your step towards freedom and independence. However, while buying your first car can be exciting, it is also a financially costly decision that can be daunting. From choosing between heated seats and chrome plating to whether you should purchase your car brand new or used, there are several considerations you will have to make when buying your first car. By taking the time to do your homework and explore your options, you’ll be able to find the right vehicle for both you and your budget.

Here are a few things to consider when buying your first vehicle:

Know your budget (and stick to it)

When making the move toward becoming a car owner, the first step is determining how much you can afford to spend. That’s where budgeting comes in. By taking a careful inventory of your income and monthly expenses, you’ll be able to determine how much you can spare for a new set of wheels without compromising your financial future. Establishing your car budget, and what you can afford to pay each month, can help you determine whether you’re in the market to afford a used car, a sports car, or something in between. However, it’s important to remember that the cost of owning your own vehicle goes beyond just the sticker price.

Along with the upfront costs of owning a vehicle, it’s important to factor in the ongoing expenses such as insurance, fuel costs, car maintenance, and title and registration fees into your budget. So, before rushing to your nearest dealership to snag that car you’ve had your eye on, it’s vital to be realistic about the budget for your new ride and stay within your means. By sticking to your budget, you can snag yourself a sweet new ride without compromising your financial security. Now that’s a win-win!

New Vs. Used Cars – Make the Choice That’s Right for You

Once you’ve determined your budget, the next question becomes – do you buy the car brand new or used? Purchasing a new vehicle offers you the peace of mind that you’re getting a reliable automobile that only requires regular maintenance and upkeep. Unlike a used car, you can customize a new vehicle to include the features and style that fit your taste. So, if having heated seats or cruise control in your vehicle is high on your priority list, buying a new car could make those dreams a reality. Plus, with a brand-new vehicle, you can take advantage of your car manufacturer’s warranty at no additional cost. While buying a new vehicle offers you the convenience of purchasing an automobile directly from the car dealer, it’s important to be aware that your car’s value will depreciate as soon as you drive it off the lot. This means you’ll be less likely to receive the amount you paid for it if you decide to sell your car in the future.

On the other hand, buying a used car is another option to explore to help you become a car owner. When you purchase a used vehicle, you get the benefit of paying a lower sticker price, which allows you to take those extra dollars in savings and put them towards springing for a nicer model without exceeding your budget. However, a used car may require a little more TLC than a new car, which could cause you to rack up higher maintenance and repair costs that all come out of your wallet.

To Buy or To Lease: Explore Your Financing Options

To buy or to lease, that is the question. Leasing a car is like a long-term car rental in which you pay only for the use of the vehicle, and that’s it. That’s because, when you lease a car, the dealership still owns the vehicle, but you’re still on the hook for all the maintenance and repairs incurred during your leasing period. Your monthly car payments will be lower than if you were buying the vehicle, as your payments are mainly to help cover the cost of the car’s depreciating value while you drive it rather than going toward the purchase price. If switching up your ride every few years is more important to you than owning one, leasing may be the right choice for you.

Otherwise, if you are looking to keep your car for the long haul, consider buying a car instead! When you finance a vehicle, you get the joy of knowing the vehicle is all yours once you have finished the required monthly car payments. Don’t have all the cash to cover the car cost? Don’t fret. With the help of an auto loan, you can get the car you’ve always dreamed of without the added stress of trying to come up with the cash. By consulting with a financial expert at your local financial institution, you will gain a more comprehensive understanding of the vehicle-buying process, the extra costs associated with this purchase, and whether you are eligible for pre-approval for a car loan.

Remember though, just because you are preapproved for an auto loan does not mean you must use this financing to secure your car. Consider leveraging the terms of your auto loan to see if your car dealership can offer you a better financing deal – which means more cash stays in your pocket. By evaluating your financial and personal circumstances, you’ll be able to discern whether buying or leasing is right for you. Now, whether you choose to buy or lease, remember to carefully read your car agreement’s fine print, and ensure you fully understand its terms before signing on the dotted line.

Shop around for the best deal

As with any major purchase, equipping yourself with the proper knowledge can help you make an educated financial decision. By doing your homework, you will be able to identify all the car makes and models that fit within your requirements and budget, ensuring you get the best bang for your buck. So before pulling the trigger on the first car you see at the dealership, stop, and hit the pause button. Remember to visit a few dealerships in your area to determine the average price for your desired vehicle. After all, every dealership prices their vehicles differently, so by taking the time to visit a few locations, you’ll know the average price of that minivan or sports car you’ve been wanting, which will serve as a helpful tool in your arsenal when it comes time to negotiate with the dealer.

Vroom Vroom your way to being a car owner with the help of a credit union

You only purchase your first car once in your life, and by taking the proper steps, you can ensure it’s a positive experience for you and your wallet. Credit unions are a great financial partner to help you plan for and/or purchase your first vehicle. Not yet a credit union member? To find your nearest credit union, click here.