Every teenager longs for the day when they can buy their own car. Your first car is extremely special and it is something that you will treasure for years to come. Together, you and your first car will make quite a few lasting memories. However, as many teens find out, buying your first car can turn into a nightmare! There are many things to consider including car finance, insurance, the down payment and how a brand new car compares to a second hand one.
First Things First – That Brand New Car May Not Be in Your Reach
After seeing constant advertisements on television for brand new shiny cars, often teenagers think that their first car will be just like the ones that they have seen. If you are looking for your first car then the first thing that you need to know is that second hand cars are often the best ones to go for.
The reason for this is because brand new cars cost a lot of money. Not only do you have to think of the initial cost, but you also have to consider the insurance and tax too. Many teenagers are shocked to find out just how much their car will cost them in insurance and tax. You seriously need to think about the long term cost implications as well as the initial ones. Of course, an easier way to afford a brand new car is by using vehicle finance.
Understanding Vehicle Finance
Car finance is offered by both independent insurers and direct from car dealers. The finance deals give you the chance to get a car that you wouldn’t normally be able to afford. As you are more than likely still in education, the amount of money that you have to buy a car initially is probably quite low! Car finance gives you the option to get a brand new car and pay the loan amount back in small monthly payments.
It is worth noting that if you want to increase your chances of being approved for vehicle finance, you should improve your credit history. Most teenagers don’t have a credit history at all and that tends to make insurers nervous about lending to them. To boost your credit rating you can use a credit card to make small purchases each month. Pay back the full balance on time every month and your credit score rating will improve. This will show lenders that you can pay back money and you will be more likely to be selected for car finance.
Using Car Finance on Used Cars
When taking out car finance, usually the purpose behind it is to buy a new car. However, you can also use vehicle finance to buy a used car if you need to. If you do choose to purchase an older car then you have to be sure that the car is exactly as described. Try and get a family member or friend who knows something about cars to check over the vehicle for you. That way they will be able to spot any potential problems before you buy it.
Overall the main thing to keep in mind is that car finance is a good option for first time car buyers. Just make sure that you can afford the repayments before you agree to anything.