Considerations when Buying your First Car in Burford

Considerations when Buying your First Car in Burford

Posted on September 28, 2021

If this is your first time buying a car, these suggestions are going to make the experience much more enjoyable. It’s an exciting time and we don’t want you to lose focus on what’s important.

Our Burford auto loans team has put together a list of the most important things to be aware of when you are buying a car for the first time.

Do you need a car?

This is a question every prospective buyer should consider before they start taking on an auto loan.

While having a car is convenient, there are additional costs aside from the monthly payments. Some of these costs include parking, gas, servicing, maintenance and insurance.

Do you have a down payment?

You may be able to get 100% financing for your car purchase but that does not make good financial sense.

The minute you drive the car off the lot, it loses value due to depreciation. With a 100% loan, you would end up owing more money than what the car is worth for a while. That’s not usually a problem but might become one if you had to sell it quickly.

By putting a down payment, you will have some equity in the vehicle which helps protect you in the long run.

Credit health check

When was the last time you checked your credit report for mistakes? There is a chance that your report will contain errors. Those mistakes may hurt your credit score which makes getting auto financing more expensive.

The good news is, any mistakes inside your credit report must be corrected promptly but the onus is on you to report these errors.

Use an Equifax Consumer Credit Report Update or TransUnion credit investigation request to have mistakes corrected.

Sources of income

If your credit is in good shape (score of 650+), the next thing that prospective Burford auto loan providers will want to assess is your income.

Individuals who are employed would need to provide their latest payslips that show the total income they receive.

Self-employed applicants

With the growing gig economy, many individuals are classified as self-employed.  Lenders are very cautious when underwriting because self-employed applications are considered higher risk.

If you are self-employed, then you will need to provide your latest income tax notice of assessment. Along with the income tax notice of assessments, be prepared to give your banking activity for the last 90 days or longer.

Selecting the right car

After you have jumped through all of these financial hoops, it is time to start looking at cars.

Are you looking for a sedan, SUV, truck, or something else?

What are you going to be using the vehicle for, work, recreation, or both? (This is a serious question because it also impacts how much your insurance coverage will cost).

Do your research

A critical step that prospective buyers overlook, is to not perform their due diligence on the vehicle. Not all vehicles are reliable, and it would be foolish to buy a vehicle that is known for being unreliable or poor quality.

While lemons are great for margaritas, you do not want to drive a vehicle that is classified as a lemon!

Don’t make rash decisions

You may feel pressure from the car salesperson to make a decision and quickly buy the car but resist that feeling. Remember the adage that haste makes waste and that is very true when making a serious financial decision like buying a car!

When you’re ready for a car lease or loan, get in touch with the Burford auto loan experts at Northway Ford for great deals on auto finance.

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