If you intend to purchase your first car, then most likely you are a high school student, a college student or may be someone who has got a recent employment. In any case, the first time car buying experience is really exciting.

In this regard, below are given some guidelines to help you:

1 – Which Car to Purchase

The foremost step is to determine which car you would like to buy. You must be realistic and make a choice of car that you can make at least twenty percent of its price as down payment. It is definitely ideal to purchase a car for which you can make all the payment within four years.

2 – Keep in Mind the Tertiary Expenses

The car payment is your fixed expenditure. Besides this loan amount, you have to make certain other expenses on your own, such as gas, insurance, batteries, and spare parts, etc.

3 – May Purchase a Used Car

If you don’t have the ample resources, then you must settle on a second hand car. In fact, to purchase a second hand car like Honda Accord or Toyota Camry is actually a very good decision in this regard.

It will provide you security, reliability and also saves your money on expensive maintenance of new car.

4 – Auto Loan Not Always Available

If you are going to purchase a car more than five years old, you won’t be able to acquire an auto loan. You have to pay for it in cash. You must therefore, make his decision very carefully keeping in mind the situation of cash available with you.

5 – Think Well Before Purchasing

Generally in the market, no return policy applies to the cars. It is not possible to exchange your car even after 48 hours. You may want to return it, because now you don’t like it. For that reason, you must be very careful before purchasing a car.

6 – Importance of Credit History

It is quite possible that if you are first time buying a car, then you may have no credit history. This is surely one of the main impediments in getting a car loan.  You have to have a credit history/record. In this regard, you can either get a gas card from gas station or a credit card from the departmental store within your close proximity very easily.

Both of the above help you in building the credit history. You have to make sure to pay them off within a month while using these. It is advisable to not spend beyond the limit, especially which you are unable to pay. It will show a bad credit history on your part. The ultimate situation is that the balance should not be more than 50% of your limit. You must continue this way at least for six months. It will then present some credit history to your lender.

7 – Find a Cosigner

On the other hand, if you don’t have a good credit history, the best is to ask for the help of your parents, a relative or some close friend to become cosigner with you. It signifies that besides you, the cosigner will also sign loan papers with you. Hence, he will also be responsible for the repayment of loan, if you fail to pay.

It is a very risky and fragile matter; you therefore, have to ensure that the cosigner must be well aware of the whole details before he signs the papers.

Hurdles in Applying the First Car Loan

Following are the most common hurdles while applying for car loan for your first car:

• To arrange finance for a car older than five years is so much difficult.
• The car repairs and other wear and tear costs will exhaust some of your income.
• The insurance for the car will be very expensive.
• Your deficiency of credit history will be an impediment in persuading the lender.

If you are a first time car purchaser, then you must properly research before deciding to look for an auto loan for your car.