How to buy the first car? Check out 7 tips to make your dream come true

How to buy the first car?  Check out 7 tips to make your dream come true

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How to buy the first car? This is the question asked by a good part of the UK residents population, especially when we talk about the youngest.

No wonder the last Anfavea research (National Association of Motor Vehicle Manufacturers) on the topic pointed out that 70% of young people up to 25 years old intend to buy their own car.

The “new normal” driven by the pandemic of COVID-19 has reawakened this interest, since the habits of the period of social isolation are expected to persist even after the end of the crisis.

However, not everyone knows how to buy the first car or know all the items they need before making this investment. The doubts about how to buy the first car go far beyond how much it takes to make it happen.

There is a huge amount of options for manufacturers and models, which include different consumer profiles. In addition, the payment method can also directly impact the buyer's routine.

To clarify these doubts, we have prepared a complete material for you to learn with 7 practical tips on how to buy your first car. Are they:

  1. Set goals;
  2. Plan yourself;
  3. Consider the expenses after buying the car;
  4. Save;
  5. Consider Investments;
  6. Search and choose the best model;
  7. Decide the method of purchase – cash, financed or consortium.

So, let's get to the tips on how to buy the first car!

Tips for buying your first car

If you are one of those who are planning to buy the first car, we have selected 7 tips below for you to make an assertive choice. Check out!

1. Set goals

The first important step among the tips on how to buy the first car is to establish goals tangible to be achieved. Some experts point out that visualizing the goal on paper makes the achievement more palpable.

If you need to buy your first car by December 2021, write in a visible place: “Buy your own car until December 2021.

Chosen model: sedan. Brand: national. How will I buy? Saving money. How much I still need: £ 20 thousand reais ”. This way, it will be easier to understand what you need to do to buy the car of your dream and then start taking action.

two. Plan yourself

Before thinking about how to buy the first car, it is essential to make a good planning so as not to regret the deal later. Organize your finances, check how much you have saved and how much you intend to allocate to purchase the car.

One important tip at this point it is not to use all of your emergency reserve for this purchase, as at any time you may need this extra money. Consider using only a portion of the amount and start your financial planning from this amount.

3. Consider post-purchase expenses

A very common mistake of the owners of the first car is to consider only the cost with the purchase of the good, be it the cash value, financing or consortium.

When organizing a plan for how to buy the first car, it is important to consider expenses after the purchase and sale process is completed.

One of the tips on how to buy your first car is when you are doing your financial planning and adjusting your monthly budget, do not forget to consider some basic expenses of the car, such as:

  • Maintenance;
  • Safe;
  • Motor Vehicle Property Tax;
  • Licensing;
  • Fuel;

These are expenses that you will have weekly, monthly or annually, so make sure it is within your reality to have your own car and what you need to do to be able to maintain it.

4. Savings

how to buy the first car - save

Once you have decided and know how to buy the first car, if you have not won the lottery, there is no other way but save money.

The first step is to analyze syour current consumption habits and see what expenses are unnecessary and can be discarded or reduced.

If you eat daily in restaurants, consider cooking at home and taking the food to work. Save electricityca, opt for public transport whenever possible.

Reduce weekend tours and opt for free leisure options, such as strolling in the park. Give preference to cash payments, as using a credit card can turn your finances into a snowball.

Of course, there is no way to stop life completely during this period, but the idea is to save on costs that are not essential. From there, set a goal of how much you want to save on your monthly income, thinking about the initial term of your goal.

In this article from our blog, we talked about tips to learn how to save your salary. It is important to consider this amount saved as a debt, saving it every month without exception.

5. Consider Investments

When asking yourself how to buy the first car, always consider investing your financial reserve. Most UK citizens still rely only on savings as a way to save money and make gains.

In addition to not having an income tax collection, the conservative profile of the population in the country favors savings, as it is easy to apply and use the money saved.

However, with the inflation on the upside, the return on this type of investment has done more harm than profit to investors. Therefore, consider investments with higher profitability.

This does not mean that a person who has never invested in high-risk investments needs to take a chance on the stock exchange to be able to buy the first car.

There are fixed income investments, such as CDB (Bank Deposit Certificate), which are as safe as savings. The main difference is that the investment has higher yields, usually above inflation.

This investment category is offered by banking institutions to raise funds and you can also choose three types of income: fixed rate, annual interest defined at the time of purchase and post-fixed.

This is just one of the ways to collect what is needed to buy the car more quickly, in addition to making your money pay off. High-risk investments tend to have a higher yield, however, there is a greater risk of losing what has been applied.

As your goal is to conquer your own car, risking losing what you have conquered so far, may not be a good option.

6. Search and choose the best model

Many people have long dreamed of a particular model of car and aim to buy it as soon as they have the financial means. But, have you ever wondered how to choose the first car?

The most important point about buying the first car is not to get carried away just by the appearance of the vehicle. There are several factors that must be considered by the consumer, ranging from the model to the depreciation of the vehicle at the time of resale.

When it comes to the model, the buyer needs to assess whether the specifications are suitable for his routine. A family made up of two adults and two children, for example, will certainly have difficulties adapting to a compact.

Therefore, assess which features are most needed for you, such as trunk size, number of seats, internal space. Also check if it is an economy car or if it consumes a lot of fuel.

It is worth noting that each model usually has a different insurance cost, as it is calculated according to its loss ratio. This is an expense that you will have annually, so be aware of the value of the car you choose.

7. Decide the method of purchase – cash, financed or consortium

Without a doubt, the best way to buy a car is to make the payment in cash, as it increases the ability to negotiate the value of the car, in addition to having no interest. However, this is not the reality of most UK citizens.

Therefore, for those who want to know how to buy the first car, the market offers at least three more options in the purchase methods.

The most common is bank financing, in which the buyer gives an down payment and finances the remaining amount. Some items need to be analyzed in this purchase category:

  • The installment value: it needs to fit into the monthly budget without hurting finances;
  • The effective cost of the operation: what will be the final amount paid for the vehicle ?;
  • The interest rate: what will be the charges applied monthly ?;

Despite the financial instability, for those who want to buy a financed car, this is the moment, as interest rates are at historic low rates.

Another way to conquer the long-dreamed car is through a consortium. This category is more advisable for those who do not have urgency to count on the vehicle.

The advantage is that it has a lower cost than financing, as it has no interest and administration fees are lower. However, the buyer will need to be drawn or bid to be considered before the stipulated period. Otherwise, you will receive the letter of credit at the end of the contract.

Another way to buy the first car is by opting for leasing. The buyer pays the installments while using the car, but will only have the vehicle transferred to his name when all installments have been paid.

It works almost like a car rental, however, at the end of the installments, the car will be yours. Usually, it has lower interest rates than financing.

Regardless of model, value or form of payment, the fact is that the car itself is still a dream of many people. How to choose the first car may not be easy, with a little planning and savings your dream can come true.

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