10 Tips for Buying Your First Car

• Buying a car is complex, requiring credit checks, comparison shopping, and negotiations with dealers. 
• Before heading to the dealership, have a reasonable budget in place, save for a down payment, and check your credit history. Once you've shortlisted some cars, you'll want to take the steps to prequalify for financing, and then approach reliable dealers. 
• A FINN car subscription is an alternative to going through the hassle of buying your first car. You can drive a new car for as short as 6 to 12 months and your monthly payment includes everything you need to begin driving.

Before you even step foot on the car dealership lot, spend some time checking in with your finances and credit. Consider what you’re looking for in a car and what qualities or features you will prioritize in your search for your first car. 

1. Consider the cost of car ownership

It’s easy to simplify car ownership into a monthly payment, but owning a car has many more expenses, especially if you purchase used. Here are just a few common expenses you should budget for on top of your monthly car payment: 

• Gas
• Registration
• Insurance premium 
• Parking fees
• Maintenance
• Cleaning and upkeep 
• Tolls

You can approach budgeting for a car in several ways, but prioritize covering all your car-related expenses with that one dollar amount. For instance, if you have $800 budgeted to spend on your car every month, your insurance premium, parking fees, fuel costs, car payment, and any other expenses should all be less than or equal to that amount. 

2. Determine your down payment 

Traditionally, expert advice preaches putting down 10% on a used car and 20% on a new vehicle to offset depreciation. However, down payments come with a specific point of diminishing returns. The best amount to put down on a car is one that doesn’t break your budget. 

3. Verify your credit report and score 

Do you know what credit score is needed to buy a car? Generally speaking, higher credit scores can help you get a lower interest rate, but some dealerships will work specifically with first-time car buyers with no credit history. If you have entries on your credit report, reviewing them to ensure accuracy guarantees you’ll get the best rates for your credit score. 

4. Begin compiling your shortlist 

For many first-time car buyers, the question isn’t whether to buy new or used. Instead, it’s which used car will bring the most value with a price that fits their budget. You’ve already determined how much you want to spend, but now it’s time to see what vehicles are available and which best fit what you’re looking for. You can compare cars based on: 

• Purchase price
• Make and model
• Size
• Color
• Durability and reliability ratings
• Safety features 
• Fuel economy

Resources such as Edmunds and Kelley Blue Book can help you find the information you need at this point in the car buying process. Once you’ve gathered information on some contenders, it’s time to put numbers to those options and see what you can qualify for. 

Now that you’ve got a roadmap and parameters to help guide your car search, you’re ready to implement it. Starting with financing and then approaching dealers puts you on the right track. 

5. Seek out financing 

If you’re unsure about what a pre-approvedcar loan means or what APR on a car loan stands for, now’s the time to supplement your research before you look further into financing options. You can obtain auto loan financing from several sources, including: 

• Banks
• Credit unions
• Online lenders
• Dealerships

Remember that most lenders will pre-approve you if you submit to a soft credit pull, but even these credit checks can hurt your score. Plan out your soft credit pulls within 14 days to reduce multiple inquiries into one. 

If you’re struggling to gain pre-approval for a loan, it could be time to rethink your approach. Some lenders will provide a reason for their refusal, which can help you address issues if any come up. In addition, you can also check out FINN car subscriptions to see if it might be a better fit. Subscribing to FINN doesn’t require jumping through as many hoops to drive a car you get to pick out. 

6. Visit local dealerships 

As tempting as it might be to show up on a dealership lot and peruse the inventory, it’s best to approach the sales experience with a bit more forethought. You wouldn’t ask a salesman, “When will car prices drop so I can come back for a better deal?” Instead, you can research the best time to visit the dealership lot, figure out what to pay attention to during a test drive, and strike the deal that fits your goals. 

7. Prepare for negotiations 

The best time to buy a car happens when you’re confident in your approach and ready to negotiate. When you sit down to talk numbers, you can ask what the dealer holdback is for a particular car. Flexing your knowledge can show the salesperson you mean business but do your best to keep emotion out of the deal. Perfecting your poker face can go a long way in getting you the numbers you need in the finance and insurance (F&I) office. 

8. Select your add-ons 

Most first-time car buyer guides will deter you from considering add-ons, as admittedly, most of them are unnecessary. However, these add-ons cater to a particular need that some drivers have, and others don’t. For example, adding tire and wheel protection to your invoice may bump your car’s final cost, but if you are prone to scraping metal against the curb, you could save money in the long run. Extended warranties are another consideration that may be worth your while. 

Accepting the keys from the salesman can feel like you’ve crossed the finish line, but the car ownership journey has only just begun. Here are a few last-minute steps you should take after you buy your first car. 

9. Register your car 

Once you’ve signed on the dotted line and shook hands with the F&I manager, it’s time to get your paperwork in order before you leave. The dealership typically gives you a copy of your contract and a temporary license plate good for 60 days. Visit the DMV before your temporary tags expire to complete your registration.  

10. Maintain and enjoy your new ride  

Before you celebrate, take a minute to peruse your owner’s manual and plan for any upcoming maintenance intervals. Schedule any oil changes, tire rotations, or repairs as necessary. Then, pat yourself on the back for a job well done because you’re now the proud owner of your very first car.

Buying a car for the first time offers a critical learning experience and the opportunity to gain knowledge that will serve you every time you approach purchasing a new car. It’s natural to have questions throughout the process, but finding the answers is even more essential. Here are a few questions to jumpstart your thinking:

1. What is your return policy? Giving yourself a way out of the deal can help you head off buyer’s remorse. 
2. Can I see the buyer’s order? The buyer’s order is an industry term that describes the legal contract binding you and the dealership. Every parameter involved in the deal you strike shows up here, from details about the car you’re purchasing to pricing for various services, fees, taxes, and more. 
3. Can you offer me a better interest rate or financing terms? Asking this question gives the dealership the chance to earn your financing business. 
4. Can I have a copy of the vehicle history report? Inspect the vehicle history report carefully to catch any red flags before negotiating the price. 
5. Does this vehicle come with a warranty? You’re effectively asking the dealership, “What else is included with my car purchase?” 
6. Can I take the car for an independent inspection? Though dealerships typically perform their own inspections, asking about performing your own at a trusted mechanic’s shop can give you peace of mind—and a valuable second opinion.

Everyone learns at a different rate, and sometimes, immediately putting that knowledge into action can be intimidating. If you’re ready to find your first car but are unsure if financing is the right choice, a FINN car subscription can give you the best of both worlds without the pressure. FINN offers short subscription terms so you can test-drive the entire fleet before deciding on your next car.