The Newbie’s Guide to Car Buying

When it comes to buying that first car, everybody was a novice once. And even though the process can be intimidating, if you do your research and get your financing in order ahead of time, you’ll be able to purchase the vehicle you want at a price you won’t regret. And that’s something you’ll feel good about long after you’ve moved on to your next vehicle.

“In the pre-Internet days, car buying was often a nightmarish negotiation process between the dealerships and consumers,” says Frank Perez, Assistant Manager with Consumer Lending at SchoolsFirst FCU. “But online car research sites like and Kelly Blue Book  have leveled the playing field for today’s buyers. If you take advantage of this information before you hit the car lot, you’ll be in a strong position to negotiate a good deal and drive away happy.”

Here are some steps to help you find, research and buy your new—or new-to-you—vehicle.

Budget: Know What You Can Afford

Although you may have a ballpark idea about how much you want to spend, you still have to think beyond the sticker price, and consider things such as taxes and fees, car insurance and what interest rates you’ll pay on your auto loan.  If you’re kind of fuzzy on these facts, review Edmunds’ How much car can I afford? It allows you to input information that will help you determine what you want to pay and then provides cars that match your criteria. And check out Kelly Blue Book’s 5-Year Cost to Own tool. It factors in other costs such as depreciation, maintenance, repairs and fuel costs. TrueCar is great for researching what you can expect to pay and what others have paid, so you won’t spend more than you need to. Once you find out the true cost of owning your car, it may cause you to reconsider, or feel confident that you have made the right decision.

Get Preapproved Financing

If you’re not paying in full using cash, you’ll need an auto loan. And while it’s tempting to take advantage of the dealership’s special financing, be sure to explore your options ahead of time. For instance, if you don’t have really good credit, you most likely won’t qualify for the best financing offers. Don’t know your credit score? Get one for free at If you have no—or —a limited credit history—your financial institution may offer loans to fit your circumstances and get you on the road to car ownership. For instance, SchoolsFirst FCU offers a First-Time Buyer auto loan program. The great thing about having a preapproved auto loan is that you can shop like a cash buyer, which gives you more negotiating power when it comes to sealing the deal.

Take a Friend and Take a Test Drive

Even though your short list of cars can look great on paper, it’s a different experience once you get behind the wheel. So find a level-headed, experienced friend to go with you to test drive your vehicles. Remember, a salesperson’s job is to get you to buy that car—or any car. And because some can be pretty aggressive, your friend can act as a nice buffer and keep the pressure at bay. They can also keep you from impulse buying, which can cost you money if you’re not careful.  Of course, if the stars align, you find the car you love and the dealer offers you a price that you’ve researched and know is a fair one, then by all means, forge ahead.  But again, it’s always wise to have someone with you who has gone through the process before. All too often, the dealers will try to sell you extras that you may not need, such as rust proofing, paint protection or extended warranties. And if it doesn’t feel right be willing to walk away. Deals abound, and if you’re patient, you’ll find the perfect one.

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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

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