How to Find Your First Car

young woman sitting in car smiling

Finding the perfect first car is important for a new driver. You want one that fits your personality but also falls within a budget you can afford. Read on for some crucial steps in your search for your first car, including creating a budget, choosing from vehicle types and features, and visiting local dealerships.

Part 1 of 3: Make a budget and get pre-approved for financing

Your first step before purchasing a vehicle is to make a budget. Most often, when you are purchasing your first car, you don't have a lot of money. So, make sure that you develop a budget and get pre-approved for financing before even heading out to the dealership.

Step 1: Develop a budget. The first step toward successfully buying and owning a car is to determine what you can afford it.

When coming up with a budget, keep in mind additional fees, such as taxes and financing charges, that you have to pay when buying a vehicle.

person about to sign a document

Step 2: Get pre-approved for financing. Approach financial institutions to get pre-approved for financing before you start looking for a vehicle.

This allows you to car shop only for the vehicles you can afford.

The available financing options include a bank or credit union, online lenders, or the dealership. Make sure to shop around for the best financing, including looking for lower interest rates.

If your credit is not good enough, you may have to find a co-signer. Remember, a co-signer is responsible for the loan amount if you fail to pay. They also usually need a credit score of 700 or higher to qualify.

  • Tip: Know your credit score when going to get financing. This should let you know what kind of Annual Percentage Rate (APR) that you can expect. A credit score of 700 is a good credit score, though you can still get financing with a lower score, but at a higher interest rate.

Part 2 of 3: Decide which type of vehicle you want

Deciding on a budget is only part of the process of buying a car. Once you know how much you can afford, you need to decide on the type of vehicle that you want and then seek out models within your price range. This process includes looking up the fair market value of the vehicle you are interested in, taking it for a test drive, and having it checked by an expert mechanic.

Step 1: Research the vehicle you want. First, you need to research the vehicle you want and decide which vehicle make and model are right for you.

When searching, keep in mind how many passengers you expect to transport, if any, on a regular basis.

Cargo space is also important, especially if you plan on hauling anything.

Other considerations include vehicle quality, gas mileage, and typical maintenance costs.

  • Tip: When researching vehicles, pay attention to reviews online. Vehicle reviews can alert you to any potential problems that a vehicle might have, including poor safety ratings, gas mileage, and reliability.
honda civic kbb value
Image: Kelley Blue Book

Step 2: Find the fair market value. Next, after deciding on the vehicle make and model that you want, look up the fair market value.

Some sites where you can find the fair market value of a vehicle include Kelley Blue Book, Edmunds.com, and AuroTrader.com.

If the car you are interested in is outside your price range, search for another make and model of vehicle. Another option is to look for an older model-year version of the vehicle you want, if one is available.

Step 3: Search for cars. After you find out how much a car is worth and if you can afford it, start searching dealerships in your area for the vehicle.

You can do this online through the dealer site or in your local paper among the used car want ads.

  • Tip: In addition, you need to write down what other dealerships are asking for the car you are interested in. This can be used as a bargaining chip when negotiating a lower price for the car you want to buy if other dealers are selling it for less.
carfax for 2005 honda civic
Image: Carfax

Step 4: Run a vehicle history. The next step involves performing a vehicle history search on the cars you have an interest in.

Luckily, many car dealerships offer a free car history report online for all of their vehicles.

If for some reason you have to perform the car history search yourself, visit sites such as Carfax or AutoCheck. While there is a fee, you are better off making sure that you know everything about a vehicle before buying it.

Part 3 of 3: Visit the dealerships

Once you have found a few vehicles that you have an interest in buying, it's time to visit the dealerships to take a look at the vehicles, take them for a test drive, and have them checked out by a mechanic. Just be prepared for the usual sales tactics that dealership salespeople use, and keep in mind you do not have to buy and can always look elsewhere.

Step 1: Inspect the vehicle. Take a long look at the vehicle, inspecting it for any damage or obvious issues that you need to deal with if you buy it, such as putting on new tires.

Check the exterior looking for dents or other signs of damage from an accident. Make sure all of the windows are in good shape. Also, look for any rust spots.

Check out the interior of the vehicle. Look at the condition of the carpeting and seats, making sure there is no signs of water damage.

Turn on the engine and listen to how it sounds. You are trying to see if the engine starts and runs smoothly.

Pop the hood and take a look at the engine. Note its condition, seeking any signs of leaks.

Step 2: Take it for a test drive. While the car is running, take it for a test drive.

Observe how it handles turns and hills, as well as stop and go traffic.

Make sure that all of the signals work properly, as well as the headlights and taillights.

  • Tip: While out on your test drive, contact an expert mechanic to come and take a look at the vehicle to make sure everything is in proper working order.

person filling out their bill of sale

Step 3: Finalize the paperwork. Now that you have test driven the vehicle and are satisfied with it, it's time to agree on a price, get the financing set up, and sign the necessary paperwork.

You should also ask about any extended warranties to protect your investment.

If you got pre-approved for financing, you still need the lender's approval before you can purchase the vehicle. Some lenders have restrictions on the mileage or age of any vehicle they finance.

If you are buying the vehicle outright, make sure the dealer has your home address to have the title mailed to you. Otherwise, the title goes to the lender until the vehicle is paid off.

Last, but not least, you need to read through and sign the bill of sale. Then, once the dealer has made you some temporary tags and given you the keys, the vehicle is all yours.

Buying that first car is a special occasion. That's why it is important to get the right car for your needs, whether you plan on hauling a car full of people or drive mainly by yourself. You can find the right car for the right price if you know what to look for. Before buying any vehicle, though, ask one of our expert mechanics to perform a pre-purchase car inspection.

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details

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