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New College Graduates - Buying Your First Car?

June 20, 2018 | By Louis Tully

So, you’ve finally graduated from college and you started your first “real” job - that’s great! Now that you’ve reached life after college, it’s time to find a reliable car that can get you through your daily commute. But before you go walking up to the dealership there are a few important factors you need to keep in mind. Some people buy the first car they can get their hands on without even thinking about their income, credit, financing options, etc. Tread lightly, because you don’t want to get stuck taking out an installment loan just to make your car payments on time. Be sure to investigate these important factors before you set out to buy your first set of wheels.

Look at Your Current Income

This is probably the most important factor you should be looking at before purchasing your first car. Car payments can get pretty high, especially if you’re buying new, and you need to be able to determine if you can afford to consistently make these payments every month. Also, you need have enough money in savings so that you can make a proper down payment. Industry experts recommend a down payment of at least 20 percent of the total cost in order to get the best deal.

Check Your Credit Score

If you're new to this whole “adulting” thing, you probably haven’t checked your credit score very often, if at all. In fact, you may not have much credit to check on in the first place. Your credit score plays an important role when it comes to making big purchases as it has a direct effect on the interest rate you can qualify for. The higher your score, the lower the interest rate. It’s that simple. If you don’t have credit, you should consider building it up before making your first car purchase. Student Loan Hero offers great advice on how to get started.

Consider All Your Financing Options

Chances are, you’re not going to pay for your car outright, so you’ll have to find a way to finance it. Shopping for auto loans is probably more important than shopping for the car itself. You’ll need to see if you can be approved for a loan that will cover the cost of the car you want as well how much you can afford in monthly payments. Lending Tree makes it easy to shop for these loans from home or on the go so you can be ready to finance before even walking into the dealership.

Do Your Own Research

Another factor you should consider before making a purchase of this magnitude is the importance of researching vehicles. Do you know what kind of car you want? What do you need from your car? Is it better for you to buy new or to drive something a little more broken in? Put together a checklist of everything you want from your car and then take a look online to see where you can find the vehicle that’s right for you.

Shop Around for Insurance Rates

Last but not least, you’ll need to shop around for insurance. Buying your car doesn’t end until you’ve purchased insurance for it. In fact, dealers will not let you drive away with your car until you’ve provided them with proof of insurance. It’s the law after all. Car insurance can get almost as expensive as the car payment itself if you’re not careful, so you’ll want to take your time shopping it around for a policy that gives you the coverage you need at a price you can afford.