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First Car Tips

First Car Tips

Buying a car for the first time is so exciting. You just got your license, or you moved out of home to start your own life at school or work. Or you just immigrated from where you never needed a car before. Everything is so exciting. But don’t get too excited and ignore doing your research. I assume you didn’t ignore it as you are already here.

This first car tips lens is to show you some obstacles that you’ll face trying to buy your first car and how to get around them. Everything in life looks either too hard or too easy until you start doing it, only then you’ll realize its reality.

New vs. Used

Can you afford a new car?

Even if you do, my recommendation is not to. A new car loses at least $3000 in value once you drive it out of the auto dealer’s lot. A two-year-old car will lose 30-40% of its value, assuming you took good care of it and had no accidents.

As a first time car owner you still don’t know a lot about different cars and advantages and disadvantages of certain car makes. You’ll probably want to change your car frequently until you are comfortable with a certain car to stick with for the next 5-7 years.

You see, in the first two years of the car’s life it loses a lot of it’s value. Why would you pay for that loss in your first car? Let someone else pay for it and get your car two years later.

How to Pay for your First Car

First car financing obstacles

If you are a youth or a new immigrant to North America, in both cases you have no credit history. Without credit history you can’t get any good deal on car loans. Not only car loans. You’ll get the same response when you apply for any financial aid.

There are two steps for getting your car financed for you:

1. Fix or build a credit history. Without one you can’t get any loans. You’ll see some ads for financing cars for bad or no credit, DON’T GET FOOLED by those ads or you’ll end up paying up to double the real value of the car. Use this guide to fix your credit yourself or use this service to fix your credit issues first if you have any. But it will take you at least 6 months from starting to build your credit history before you might be approved for any auto loans.

2. Choose a car you can afford paying in full in 36-48 months and put 20% of its value down (pay 20% of the price as a down payment). Here is why: As mentioned above, the first car doesn’t last long with you and you’ll probably want to change it frequently. If the car is too expensive to be paid in full in 48 months and you didn’t pay 20% down you’ll owe your bank or lending institution more than what the car is worth (they take the interest first). You’ll either have to pay that out of your pocket or you’ll have to add it to the next car’s loan.

Consider Other Expenses

Car ownership costs more than just the car itself. Be aware of other expenses. The list includes gas, oil change, tire change, regular maintenance, parking, car insurance, and winter service in snow areas.

Gas and oil, together with regular maintenance are beyond your control as they are a must. Of course you can control your gas consumption by driving less, but you can’t avoid the ever-changing prices of gas. If you are renting (most probably) make sure you have a parcking spot included in the rent.

The one thing that needs a lot of research is the car insurance. So many factors will make your auto insurance high, and all of those factors apply to you. As a teenager your car insurance will be the highest. The type of car will affect your car insurance. Generally a full size sedan gets a lower insurance than a 3 or 2 door car. So keep that in mind before choosing the car.

Also, make sure you get auto insurance quotes before you buy the car, and compare different cars and different insurance companies until you get the best combination. This website offers some help with this issue.


You need to plan to buy your car at least 6 months ahead. Start with your credit history, compare cars, and get insurance quota for the car(s) of your choice before you go out shopping for your first car.