Buying your first car is an exciting right of passage that can be quite daunting if you’re not prepared. And even worse, lacking a complete and firm understanding of what you’re signing up for can leave you with an enormous amount of debt and monthly payments you can’t afford.

To help, we’ve compiled a list of tips to help first-time car buyers save money initially and in the long run:

  • Set a Budget, and Stick to It: The first — and possibly most important — step when considering purchasing a vehicle is knowing what you can and cannot afford. Take a look at your credit score to determine what kind of loan you will be able to qualify for. Plus, build your credit report if you have no or less-than-optimal credit history. View our financing calculator to find out what you can afford.
  • Opt for Safety: Most first-time car buyers are relatively new to driving and do not have a plethora of experience under their belt. Driving a vehicle with enhanced safety features protects the driver and passengers inside, as well as your wallet from costly accident expenses.
  • Prioritize Fuel Efficiency: Filling your car up with gas may seem minor compared to other car-buying expenses, but can cost you big over time. Make sure the vehicle you land on includes sufficient gas mileage and avoid being surprised after driving off the lot.
  • Know What Others Are Paying: Do your research before stepping foot in a showroom to understand the real cost of the vehicle you’re interested in, including its current market value, any qualifying incentives including cash back or financing deals, and estimated sales tax and additional fees.
  • Pick the Best Time to Buy: Research shows that shopping for a car during the week, on holidays, at the end of the quarter, and in months close to the end of the calendar year can earn you over 8% in savings! 
  • Consider Buying Used: New cars depreciate the minute you drive off of the lot — and significantly over the next three years. Buying a used vehicle often allows you to avoid that large depreciation cost and save on monthly payments and insurance costs, while retaining the same level of reliability. 
  • Inspect It Yourself: Take the car on a versatile course for your test drive route and test for visibility, brakes, acceleration and cornering, control, accessibility, and mechanical condition. Also, if you can, hire an independent mechanic or one you trust rather than the seller’s to inspect your vehicle and avoid buying a lemon.
  • Put Money Down: Paying an initial deposit on your car is ideal if you are financing to lower your monthly payments and work toward paying the vehicle off faster. If you cannot afford the standard advised 20%, any little bit can help you qualify for a better loan.
  • Compare Offers with Several Lenders: Interest rates are typically higher for first-time buyers, so it is important to apply for loans at a few different lenders to find the best offer. The impact on your credit score takes for applying for one loan versus multiple is the same as long as you file within a two-week period. Apply for an APGFCU auto loan today.
  • Get a Cosigner: Having someone you trust cosign your auto loan can enable your lender to offer a significantly lower APR. However, your payment activity will then affect your and the cosigner’s credit score.
  • Negotiate: Negotiate each price of the vehicle individually, including the car price, add-on fees, trade-in value, and financing, so you know the exact final or “out-the-door” price.
  • Take Advantage of First-Time Buyer Deals: Lenders may offer programs for those buying their first car to qualify for a loan regardless of their credit score or history. APGFCU is here to help you reach your goals with our First-Time Buyers program! Made to help you get behind the wheel of your first car while establishing credit, we offer qualifying first-time auto buyers specialized assistance loans to hit the road running. Contact us to learn more today!
  • Read Carefully: Go over your contracts with a fine-tooth comb to make sure you understand exactly what you’re paying for. This includes the federal Truth-in-Lending Disclosure on your financing contract, which will state your monthly payment, loan term, first payment due date, APR, total borrowing and vehicle amount, and any down payment.
  • Shop Around for Insurance: Unfortunately, insurance agencies view younger drivers as more of a risk than experienced drivers, and typically charge them more per month. So, it’s important to compare rates of different providers to find the best offer.

When purchasing something as monumental as a vehicle, every little bit counts. Follow these money-saving tips to avoid paying more than you need to on vehicle necessities. For more information, visit our website or call us at 800-225-2555.

*All loans are subject to credit approval.