6 Tips for Buying Your First Car

At People’s, we aim to help you make smarter financial decisions so here are some great tips to help you along your car-buying journey.

1. Establish a Budget

Before you get your heart set on that flashy red sports car, you’ll have to make sure you can afford it. A good rule of thumb is to not spend no more than 15% of your monthly household income. So if you earn $3,000 a month, it may be best to avoid spending $450 on your car a month, including insurance, gas, and other car expenses.

2. Get Pre-approved

Auto dealers don’t just want to sell you a car, they also want to provide you with an auto loan. This is because they generally receive a commission or fee on auto loans they coordinate with–whether from the auto manufacturer or local financial institution.

Being preapproved for an auto loan will let you know how much money you can realistically borrow and at what interest rate.

Take a look at different auto loan rates online from various financial institutions. Credit unions typically offer lower interest rates and at People’s you can become a member easily if you live, work, or worship in Clark, Cowlitz, or Skamania Counties. Then, apply for a pre-approval. You can often do this online.

3. Do Your Research

Once you’ve established a budget, start researching the vehicles you’re interested in to see if they match your criteria. Do you need a gas-efficient commuter car or an SUV for weekend adventures? Also, think about the driving conditions you’ll face throughout the year.

Vehicles also come with different trims. Base models will have limited features while premium models will come equipped with all of the latest bells and whistles, like Bluetooth, remote start, and leather interior.

Once you’ve digested all of this information, think about what you want and what you absolutely need to help narrow down your list.

4. Take a Test Drive

Test drives are an important part of the car-buying process because they let you get a real feel for the car. Take at least 30 minutes on your test drive, taking it through town and on the freeway. Consider how well the car performs, how spacious it is, the views it provides, the infotainment layout, etc.

5. Negotiate – Determine the Right Price

You’ve settled on a car and have done your research, now it’s time to determine the right purchase price. Along with NADA, there are many car listing apps that will help you determine what is considered a: “fair deal”, “good deal”, or “excellent deal” based on the car’s year, trim, condition, and features. Use this estimate to your advantage and negotiate with the auto dealer to settle on a price.

6. Read the Contract Carefully

Once you’re finalizing the deal, you’ll want to read your contract carefully before signing. Make sure you’re aware of any warranty agreements, financing agreements, and fees.

We understand this may be a lot to take into consideration, but buying a car is a big investment so it should be treated as such. We hope these tips make your car-buying process easier and less stressful! If this is your first time buying car, consider People’s as your lender. We offer a First Time Auto Buyer Program with low monthly payments and no-cosigner needed!

Have more financial questions? People’s can help. So many members have reached out to us looking for financial help, we developed a Financial Resource Center to help you.
Can You Get a Car Loan with No Credit?
Yes, you can get an auto loan without credit. Some lenders and car dealers provide loans for people with no credit but it will depend on various factors including, how much you’re putting down and the car you want. It’s also important to keep in mind you may have higher interest rates by not having a credit history.

A great way to get a car loan with no credit is through a credit union, like US! At People’s everyone gets the same rate no matter the credit score.

6 Tips for Buying Your First Car in Vancouver WA

5 Local Branches Serving Greater Vancouver WA:

Vancouver Waterfront | Fishers Landing | Hazel Dell | Battle Ground | Ridgefield | Salmon Creek | Orchards | Minnehaha | Walnut Grove | Hockinson | Baker | Sara | Felida | Cascade Park East