First time car buying guide.

Obstacles to overcome when buying your first car

Financing your first vehicle can be very difficult, lenders see you as a risk since you’ve not yet proven yourself responsible to pay back a car loan.

Other obstacles you will have to overcome include:

• What will your fuel expenses be?
• Where will you get an auto loan?
• Budget for preventive maintenance like tire rotations, oil changes?
• Have you saved money for your down payment?
• How much car payment can you comfortably afford?
• Have you compared insurance coverage’s and their cost?
• Your interest rate will most likely be higher.

Unexpected first car ownership costs

There are several factors to take into account with vehicle ownership. A few unpredictable costs would be replacing tires, batteries, chipped windshield, and any unexpected mechanical breakdowns. I’m not trying kill your dream, as long as you plan ahead for these costs, you’ll have nothing to worry about.

Let’s take a look at three major expenses when owning a car, and average them over a month:

To afford $727 a month you must work a minimum of 77 hours at $9.50/hr, before taxes, to pay the total ownership costs one month. Two 40 hour weeks will be enough to cover your ownership costs and you’ll have money left over for any unexpected expenses.

You can’t rule out preventive maintenance on your first car such as, oil changes, tune-ups, and tire rotations. Not doing these at the recommended times will shorten the life of your car, and may also void the extended warranty if something seriously goes wrong. In some states you’ll have a few minor annual costs also such as, registration, tags, and car inspections.

Good planning up front will keep you out of financial trouble when buying your first car. Take a few minutes and write down all your current or future financial responsibilities such as rent, utilities, cellular phone, internet, and such.

Next, add your car ownership costs and stick to your budget. You may not be able to get a super expensive car the first time around, but if you’re smart, you’ll be able to get the car of your dreams in the near future.

How to buy your first car

There are pros and cons to being a first time car buyer. Some dealerships and manufacturers have special programs to assist you in the purchase of your first car. There may also be special rates and incentives available to you, if you know where to look and how to find them.

Being inexperienced can be very expensive for you. If you buy the wrong car or pay too much, you’re not getting a second chance.

There is no such thing as a “Buyer’s Remorse Return Law,” once you sign on the dotted line, you’re an owner. Even if the vehicle breaks in half when you drive it off the lot. My point is, this is not the time to “fake” your way through the car buying process, car salesman will see right through you and eat you alive.

4)  Compare insurance rates

It’s illegal to drive a vehicle without insurance coverage. If you get pulled over without it, you will pay a hefty fine and could possibly have your car impounded in some areas of the country.

Auto insurance is one of the most overlooked areas when buying a vehicle even for people who have bought several vehicles over their lifetime. It can be a real surprise finding out after buying your first car, your monthly insurance payment is actually more than your car payment.

Car insurance can be very expensive for young drivers, especially for teenagers. One factor is the age of the driver. The younger you are, the less experience you have behind the wheel.

The rate you’ll pay also depends on how new the vehicle is, the area you live, the average miles you drive annually and the type of vehicle you purchase. The more sporty the car, the higher the premium, the same rings true with engine size also. A policy on a new vehicle for a young driver is outrageously high.

Shop and compare coverage by getting a few free quotes online before making a decision. Once you find a quote on the vehicle you’re considering, add the cost to your monthly ownership budget.

If you find insurance coverage too high, there is a cheaper route. You can ask your parents to add you to their policy. Tell them you’ll pay the difference and whatever you do drive carefully.

My car insurance section will help you understand about secret insurance discounts, insurance myths and where to find free online rate quotes.