Everything You Need to Know as a First-Time Auto Buyer

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Published On:
August 28, 2023

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The prospect of buying your first car is an exciting and pivotal moment in your life. However, jumping into this process can seem a little overwhelming. That is why we put together this comprehensive guide to help you master the process of purchasing a car and feel confident doing it. Our experts here at Arbor are also here to help answer any questions you may have throughout the process, and our first-time auto buyer program may be able to help you feel even more confident.

Steps for buying your first car

Step 1: Determine Your Budget

Before you begin searching for your dream car, it's crucial to establish a budget. Consider not only the cost of the car but also additional expenses such as insurance, maintenance, fuel, and potential monthly loan payments. Use our online auto loan calculator to estimate your monthly payments based on the loan amount, interest rate, and loan term. It’s also important to know your credit score, as that will impact the interest rate you qualify for. You can sign up for a free credit check up with one of our experts here.

Step 2: Research Auto Loan Options

Explore various lenders, including banks and credit unions, to compare interest rates, loan terms, and repayment options. Don't settle for the first offer you receive; shop around to find the best deal that suits your financial situation. Our loan specialists can help you find the best financing options and help you determine a comfortable payment based on your budget. They can also help you explore and understand important loan protection options like GAP and Warranty. Click here to view details about our auto loan options 

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Step 3: Get Pre-approved

Getting pre-approved for an auto loan can give you a clear understanding of your budget and negotiating power when visiting dealerships. Pre-approval also streamlines the buying process, making it easier to finalize the purchase once you find the right car.

Step 4: Choose the Right Car

Narrow down your options by considering factors like your needs, preferences, lifestyle, and budget. Research different makes and models, read reviews, and consider factors like fuel efficiency, safety features, and resale value. Once you have a few cars narrowed down take them for a test drive! Pay attention to how the car handles, its comfort level, and any potential issues.

Step 5: Negotiate the Price and Bonus Features

Once you've found the car you want, it's time to negotiate the price. Research the fair market value of the car and use this information to guide your negotiations. You can use sites like Kelly Blue Book to help you. Be prepared to walk away if the dealer is not willing to meet your price.

Step 6: Complete the Paperwork

Once you're satisfied with the car and the loan terms, it's time to complete the paperwork. This process typically involves signing the loan agreement, sales contract, and any other required documents. Read everything thoroughly before signing to avoid any surprises later.

Step 7: Enjoy your new car!

After signing the paperwork, the car will be officially yours. Ensure you have all the necessary documents, including proof of insurance. Most dealerships won’t let you drive the car off the lot without insurance coverage.

Tips to make the process even easier.

  • Set a Realistic Budget
  • Consider New vs. Used: Decide whether you want a brand-new car or a used one. New cars offer the latest features and warranties but depreciate quickly. Used cars are more affordable but may have more wear and tear.
  • Know Your Trade-in Value: If you're trading in your old car, research its value beforehand to ensure you receive a fair trade-in offer. Websites like Kelley Blue Book can help with valuation.
  • Check Vehicle History: When considering a used car, request a vehicle history report to reveal any potential accidents, title issues, or other important information about the car's past.
  • Inspect the Car: If possible, have a trusted mechanic inspect the car before finalizing the purchase. This can help identify hidden issues that might not be evident during a test drive.
  • Avoid High-Pressure Sales Tactics: Be cautious of high-pressure sales tactics. Take your time to make a decision, and if you feel uncomfortable or rushed, consider walking away.
  • Read Contracts Carefully: Before signing any paperwork, carefully read and understand all the terms and conditions, warranties, and guarantees associated with the purchase.
  • Ask Questions: Don't hesitate to ask questions about anything you're unsure of. Whether it's about features, warranties, or financing terms, getting clear answers will help you make an informed choice. We are here to help answer any of your questions!
  • Take Your Time: Buying a car is a significant investment, so don't rush the process. Take your time to research, compare options, and make a decision that aligns with your needs and financial situation.
  • Save up your down payment: While Arbor offers no money down auto loans, you may find it helpful to have a little bit of a down payment saved to help reduce the starting loan balance and, in some cases, lower your interest rate.

Remember, buying a car is a big decision, and taking a patient, informed approach will help ensure that you find the right vehicle for your needs and get the best possible deal. Here at Arbor Financial, we also have a special program for first time buyers that you may find helpful. Click here to learn more about Arbor Auto Loans! 

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