Tips for First Time Car Buyers
The car-buying process can seem overwhelming, especially for first-time buyers. But the abundance of vehicle and financing options ensures that there is a perfect car, at the right price, for everyone. If you're embarking on your initial trip into the automobile-purchasing waters, these tips will help you part the sea of options.
Establish a Budget
The average new car transaction price is nearly $50,000, according to 2024 data from Cox Automotive. You’ll most likely need to finance your car, which means paying in monthly installments. It’s smart to think about how much you can truly afford to pay each month after covering your other living expenses. Remember, it’s not just about the cost of the car. You should also factor in insurance, gas and maintenance when calculating your budget.
Research Financing Options
When it comes to financing your car purchase, make sure to research your options. Many people simply use the dealer’s lender without thinking twice. If the dealer turns out to be the best option, great. But one of the best first-car buyer tips we can give is to shop around.
There is no shortage of financial institutions and companies willing to help finance your car. The AAA Auto Loan Program, for instance, offers low rates at competitive terms to fit your budget. All you need to do is submit an auto loan application, and you’ll receive a fast credit decision. If the rate changes between the time you apply for your loan and the time you pick up the check, you’ll pay the lower rate.
Buying vs. Leasing
You may be tempted to lease a car instead of buying. When you lease, your monthly payments are generally lower than buying. And while leasing may be a good idea in certain circumstances – say if you know you’ll only need a car for two or three years or you don’t typically put on a lot of mileage – it also comes with pitfalls.
Leases are short-term investments. They have mileage limits that you must adhere to. You’ll also need to pay if there’s any damage to the car that exceeds normal wear and tear. On the other hand, when you purchase a car, your monthly payments will eventually end, and when they do, you’ll own the car. Of course, that also means keeping up with proper maintenance as the car ages.
Do Your Homework
Once you know what ballpark you’re in cost-wise, you need to do some research. Between make, model and trim, there are an exponential number of car options. To sift through the choices, think about what you need from your car. Yes, you may want a sunroof for the few times you drive to the beach, but if you’re on a tight budget, you should look at cars that get good gas mileage.
The AAA Auto Buying Program lets you compare vehicles, see what others have paid and get special member pricing on actual dealer inventory.
Even after narrowing down your search, there will still be plenty of options. Fortunately, there are numerous resources that can help you decide. The AAA Auto Buying Program, for example, lets you compare vehicles, see what others have paid and get special member pricing on actual dealer inventory.
Check the safety rating of the cars you are interested in with tools provided by the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety, and look into fuel economy information from the U.S. Department of Energy (fueleconomy.gov).
New vs. Used
One major decision first-time car buyers must make is whether to buy new or used. The downside to purchasing is that your new car is a depreciating asset. In fact, most vehicles generally lose about 20% of their value within the first year and up to 60% within five years, according to Kelley Blue Book.
There is a way to avoid funding this depreciation: Buying used. The idea of buying a brand-new, sparkling car can be tempting, but don’t let that cloud your judgement. Purchasing a pre-owned car can often be the more prudent approach, particularly if you have a tighter budget.
Pre-owned cars may cost less, have many of the latest technology and safety features, and the early depreciation will have been paid for by the previous owner.
Test and Inspect
After finding your perfect first car, it’s time to make the purchase a reality. But don’t be too quick to sign on the dotted line. With all the online research available, it’s easy to forget how you feel behind the wheel. One of the most crucial tips for first-time car buyers – or any buyers – is to test drive the vehicle. There is no other substitute for learning how the car drives and feels. And it should not be simply around the block. Take the car on a route with different driving environments, such as traffic light intersections and highways. It should replicate your normal driving routine as much as possible.
You’ll also need to ensure the car is in good shape. This means getting the car inspected by an independent third party, such as a AAA Approved Auto Repair facility. Don’t wait until after you purchase the car to do this, even if it looks like it’s in pristine condition. If a dealer doesn’t allow it, shop elsewhere. If all goes well, enjoy your new ride.
One of the most crucial tips for first-time car buyers – or any buyers – is to test drive the vehicle.
Check if the car has a spare tire (some new models do not come with a spare but have run-flat tires instead), a jack and a wheel lock key. If you are purchasing a used car, inspect it from front to back, checking for prior body damage, mechanical problems, leaks and anything that looks like it would be an expensive repair down the line. With the AAA Auto Buying Program, you can obtain vehicle reports to see if the car has been in a prior accident and other recent maintenance it may have undergone.
Questions to Ask Before Buying a Car
ASK YOURSELF
It’s not often that you buy a new car, and with hundreds of models to choose from, it can be hard to know where to start. Whether you end up with a sedan, SUV or electric car, the process starts with how you answer these questions.
Question #1
What’s it for?
Is your car for simply getting back and forth to work? Leisure? A mix of both? If you’re buying a fun car for cruising on the weekends, sharp handling might be more important than a commuter vehicle that takes you to your 9-to-5.
Question #2
What kind of passenger and cargo capacity do I need?
A two-seat sports car for a married couple without children might be fine, but it won’t do the trick for a family of five that travels regularly for weekend hockey tournaments. Think carefully about everything that goes in and out of your car.
Question #3
What kind of passenger and cargo capacity do I need?
If you want a car that’s good for the environment and good on gas mileage, you may want to consider going electric or hybrid. The future is electric. Several states have announced plans to ban the sale of gas-powered vehicles by 2035 and brands, including General Motors and Jaguar Land Rover have followed suit with commitments to go all-electric.
Question #4
Do I need an all-weather vehicle?
If you’re planning to venture out onto snow-covered streets, you might consider an all-wheel drive sedan or sport-utility vehicle. Anyone considering an electric vehicle should also think about whether it’ll be out during winter, since extreme temperatures can impact the range of electric vehicles.
ASK THE DEALER
Once you’ve established the type of car you want, it’s time to get into the nitty-gritty with the dealer.
Question #1
Are there any rebates or incentives?
Some dealers may have better prices for recent college grads or repeat customers.
Question #2
What is your best price?
Salespeople may drop the listed price to help close deals with hesitant buyers.
Question #3
What’s the warranty?
New vehicles come with a warranty. Find out exactly what it covers. A plan providing all routine maintenance for two years, for example, can represent a significant cost savings.
Question #4
What is the lifetime upkeep?
Understand how much you can expect in maintenance costs over the life of the vehicle, what types of maintenance apply to your warranty and what could void it.
Question #5
Has this car been in a crash, flood or fire?
This is more of a question for used vehicles. Ask whether the service history is available, too. A proper maintenance record can give you an idea of what it will cost to own the vehicle. the AAA Auto Buying Program allows you to run a vehicle report to see the car’s history.
Question #6
Can I have both keys?
Every car comes off the assembly line with two keys, but some used vehicles are sold with only one. Getting new keys made can be expensive, so ask upfront if the dealer has both.
Question #7
Do I have to finance with the dealer to get the listed price?
Read the fine print on offers. The price you see sometimes may hinge upon financing the vehicle through the dealership at a higher-than-necessary rate.
Buying First Cars for Teen Drivers
Safety First
Safety is a top priority, especially for new drivers. Teenagers are three times as likely as adults to get into a deadly crash while driving, according to the AAA Foundation for Traffic Safety.
Taking over granddad’s car may seem like a good idea, but if it is older, it may lack some of the newer safety systems, such as advanced airbags and backup cameras.
A good place to start your research is the National Highway Traffic Safety Administration or the Insurance Institute for Highway Safety, where you can view crash test ratings, learn about safety features and more.
Size Matters
There are cars with room for anywhere from two people all the way up to a small army of teenagers. Think like Goldilocks and avoid those two extremes. Instead, go for the just-right option in the middle – you want plenty of protection in case of a fender bender.
Say No to Performance
There isn’t a teenager out there who hasn’t dreamed of having a shiny red sports car in their driveway on the day they turn 16. Let your kids keep dreaming about that fancy sports car and buy them something they can easily handle instead.
High-horsepower sports cars are fun but aren’t a good idea for those who are still learning to drive.
Think Long Term
Although you may be buying your child’s first car in high school, there’s a good chance it won’t be replaced until after college. It’s important to get a car that will last through all those years. Consider a car with extra room for hauling stuff back and forth to college and apartments. Hatchbacks are great at doing double duty, with plenty of seating for passengers and a versatile cargo area.
Go With Good Fuel Economy
Your child will likely go from broke high schooler to broke college student, so every penny matters. Buying a first car with good fuel economy ensures they’ll be able to keep if fueled up and ready to go throughout their college years.
Don't Forget Tech
Technology is generally a good thing, but it’s also a major cause of distracted driving. As a parent, how do you make sure your child is using in-car technology safely?
Features like Apple CarPlay and Android Auto seamlessly integrate smartphones with in-dash systems and reduce the temptation to pick up the phone, but have also proved to be distracting. Automakers are helping by adding teen driver systems that keep the radio’s noise level down, encourage seat belt fastening and more. The systems also provide parenting-assistance options, so parents can coach their kids toward better driving habits.
If you are in the market for a new car, keep in mind that it may be your kid’s car in a few years. Spring for the extra tech; however, when teaching your teen to drive, turn off some of the advanced driver assistance systems, so they can learn without becoming too reliant on them.
Test Drive Tips
If you plan to buy a vehicle, a proper test drive is important. The typical 20- to 30-minute test drive doesn’t offer a ton of opportunity to gauge if a vehicle is right for you, but you can use it wisely. Here’s what AAA’s Car Doctor John Paul recommends.
Successful test drives start at home. Identify what you want in a vehicle vs. what you need. A Ferrari might look fantastic, but it’s probably not the best choice for a family of four with two dogs.
A salesperson may recommend a route aimed at keeping you on freshly paved roads or in low-traffic areas. Ask to chart your own course that suits your driving habits. Drivers who merge into heavy highway traffic every morning probably should know how it would feel to do that.
Most drivers develop go-to spots for wallets, cellphones and sunglasses. Reenact your routine to see if a vehicle has good spots for your stuff. See if you’re comfortable with the controls. All new cars come with a learning curve, but being intimidated by a large touch screen might be a sign the fully loaded model isn’t a good fit.
Pay attention to how easy it is to get in and out of the vehicle. Minor difficulties on a test drive could become serious nuisances over time, especially if you’re in and out of your car a lot.
Speaking of touch screens, test drive the tech as much as the car. Try out the backup camera, see how responsive the lane-assist technology is and play with all the other buttons, gadgets and features your new car may come with. Are you impressed that your car has the potential to park itself? Try it out.
Adjust the driver’s seat as if you had backseat passengers, then judge if it’s comfortable. This is also a good way to see if a vehicle has any blind spots or may be difficult to drive in reverse.
If you have children, think about how difficult it might be to install their car seats and how challenging it might be to get them in and out of the vehicle.
Don’t fixate on cup holders. You may like to have your morning coffee within reach, but a conveniently located receptacle doesn’t make up for other shortfalls.
Drive the car at night, if possible. Some headlights are better than others.
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