Buying Your First Car

Learn about the steps involved when buying a new car

Many young adults buy their first car when they graduate college and get their first job. If you're considering buying your first car, you may be wondering whether buying vs. leasing a car is best for you or if you should buy a new or used car. There are pros and cons to both options, and you'll need to consider them carefully before walking into the dealership. Check out our other articles to learn more about the options available. Then, learn about buying a car through a dealership, including how much to save for a down payment, how to obtain auto loans and car insurance, and how automatic payments from your checking account can help ensure you stay on track and avoid default.

Choosing your first car

It's important to do your research whether you're leasing or buying a new or used car. You'll want to consider which cars have the room, features, performance in inclement weather, fuel economy, and resale value you want. Sites like and Kelley Blue Book can help you better understand and compare the features and current market value of various new or used cars. You may also want to visit the dealership and go for a test drive before you make a final decision. The most important thing when leasing or buying your first car is to be prepared and informed so you can better negotiate for the car you want at the price you can afford. To find the best deals, shop at the end of the calendar year. In November and December, many dealers are trying to sell that year's models to make room for next year's, and you may be able to save on the sticker price or financing.

Making a down payment when buying your first car

After you've decided on the make and model, it's time to prepare for the down payment. How much you have in your checking account may heavily impact whether or not you choose a used car instead of a new one, how much financing you'll need to take out, or if you decide to lease for a few years. Closely examine your budget and the funds in your savings and checking accounts to determine what's best for you, keeping in mind that the general rule of thumb is 20% down if you're buying a car. However, dealerships or manufacturers may have additional requirements for a down payment, and you also have to account for the taxes you'll pay at closing. Leases, on the other hand, have a smaller down payment or may not have a down payment at all.

Getting auto loans, titles, registration and car insurance

Unless you're able to pay for your car in cash or will be leasing your first car, you'll likely need an auto loan. Most dealerships have pre-arranged agreements with lenders to finance loans and will perform a credit check to see what rates you qualify for. Your resulting interest rate and the term of the loan will help determine your monthly payment. Since your credit score is so important when buying your first car, obtain a copy of your credit report and correct any errors beforehand. If you need a lower monthly payment, you can opt for a longer term, but be aware that this will likely mean paying more interest over the life of the loan. Or, you can pay more down and reduce the overall size of your loan.

Once you sign the papers, the dealer will provide you with a title and registration in your name. In some states, you may not receive the physical title until your auto loan is paid off and you fully own the car. It is your responsibility to renew your registration each year and stay current with the required inspections in your state. You'll also be required to provide insurance coverage for your new vehicle. Research the minimum coverage requirements in your state and know your driving history, then compare quotes and discounts from multiple agencies to find the right fit.

Paying for your first car and your insurance with automatic online bill pay from Citizens Bank

As you settle into owning or leasing your car, it's important to consider how you'll make payments each month. Online bill pay from Citizens Bank lets you send automatic payments from your checking account each month when they are due. If you want to make any additional payments toward the principal during the term of your loan, make sure you specify this to the lender when you pay. You can also set up online bill pay to remit payments to your insurance company automatically, or make transfers to a separate savings or checking account to prepare for any future car repair or maintenance costs. Plus, the 100% online guarantee means Citizens Bank takes responsibility if something goes wrong with the processing. It's a simple way to make sure your payments are made on time - you don't even have to think about it!


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