First Time Car Buyer - Do your Homework before applying for an Auto Loan

It doesn't matter whether you're a college student with a job or someone with a stable income, the process of buying a car for the first time is filled with uncertainty. If you are a first time car buyer, then planning is important to prevent surprises. Buying a car is an important decision so it requires a little homework.

There is nothing better than getting your first car! And when you make an informed decision, you will never regret it. The first thing you can do is get approval on an auto loan. It will help you in selecting a car within your price range.

As you don't have any car buying experience, here are a few questions that you need to ask yourself before you buy a car:

• Can I afford a new car right now?
• Will I be able to get an auto loan?
• Which car I should buy?
• What if something goes wrong during the car buying process?

Smart Tips to Note Down for a First-Time Car Buyer

• When you are a first-time car buyer, it is important for you to slow down and make an informed decision.
• Be a winner in the battle for budget. To create a budget is an easy task but to stick to it is difficult.
• When you are a first-time car buyer, don't forget to determine your monthly payments with the help of an auto loan calculator.
• If you are buying a used car, then find out what’s wrong with the car with the help of a mechanic.
• Research various options for your new car. Take a test drive because nothing is more important in your decision process than how you feel behind the wheel.
• Internet shopping for your dream car is another option where there is no face to face sales pressure.
• It is a myth that a good car will cost you a fortune.
• When you are buying a car, you also need to consider car insurance.
• Shop for an auto loan first.
• Don’t forget to compare the auto loan deals.

Important Terminologies for a First-Time Car Buyer

1. Credit Score- Generally known as a FICO Score. A high credit score determines good credit history.

2. Collateral –If you fail to make the payment on the auto loan, the lender has the right to take possession of your car.

3. Interest - You have to pay interest on the auto loan. It is the cost that you pay to borrow money.

4. Auto Loan Term- The term determines the number of months in which the auto loan needs to be paid off.

In many cases, a first-time car buyer gets tricked by lender’s attractive offers. So, be wise and compare the auto loan deals. If you plan your new car with a little extra homework, it will save your money and help you in establishing a good credit.