INSURANCE . RETIREMENT . INVESTMENTS
Whether you’re 18 or 85, no one can deny that owning your first car is a huge step in life. That glorious moment when you finally move from being a passenger in a taxi, to the driver of your own car.
Often the most difficult part of this process is having the right amount of money to purchase the car of your choice, particularly if you are planning on purchasing your first car straight out of the showroom.
Finding the finances for this may seem like a monumental task, but with these simple steps, anyone can save and purchase their first set of wheels.
1. Understand your income: Buying your first car does not mean you have to over-extend your reach and your wallet. A brand-new shiny car with all the latest gadgets, understandably will appeal to anyone who wants to purchase that long awaited first vehicle, it’s a given, we all like new things. But don’t despair if you cannot afford to reach this goal. The foreign-used (Roll-on, Roll-off) and second-hand vehicle market is another option with a wide variety of brands and models to suit both your needs and your budget and can help you save tens of thousands of dollars.
2. Set up a Banking Standing Order to start Saving: If you intend to purchase your first car in cash and your salary comes through the bank, then a good idea would be to set up a Standing Order that is in line with your car of choice and your salary. The Standing Order is a fixed deduction taken from your salary (usually per month or can be adjusted per client) and can be used to assist you in saving if you find it too difficult to save on your own. This also assists in budgeting as your monthly allocation towards your car is taken out instantly, leaving you with the remainder of your salary to be allocated towards your other expenses.
3. Shop around for a loan: If you have decided to purchase your first car through a loan, then proper research should be done into all legitimate loan providers that are available to you. The important aspects of a car loan should be; the size of the loan being taken which is tied to the price of the car, the interest rate and the length of time to repay this loan.
Note: Credit Unions provide much lower interest rates than their banking counterparts which is in line with their objective of helping members first. If you are a member of a credit union, then you should enquire immediately about their available car loan services.
4. Find the right car: Proper research should be done into your needs; do you just want a car to get you from A to B? Do you need a vehicle that can withstand long hours on the road? Are you looking for good gas mileage? Does your current or future job require you to have a vehicle that can transport heavy materials?
Whatever your requirements, research is key to finding the right fit of vehicle and the right price for that fit of vehicle. Take the time and be patient in your search until you find the perfect vehicle to suit both your budget and your needs.
5. Maintenance, Insurance and Fuel Efficiency: Purchasing your first vehicle isn’t the first and last step, you have to take into consideration the maintenance fee, the Insurance premiums and the fuel-consumption of the vehicle.
Firstly, maintenance costs vary per brand and model, with luxury and more expensive brands of vehicles often having considerably higher maintenance fees compared to more cost-effective brands. Over time, maintenance fees may increase, especially if the vehicle is a second-hand one that is suffering the effects of wear and tear. This is important to consider going forward as the initial purchase of a vehicle is not the only cost.
Secondly, Insurance premiums are typically offered as a percentage of the value of the vehicle, which may come up to quite a lot of money if the vehicle you choose is a pricey one. Therefore it is important to calculate the premiums you would have to pay based on your existing driving experience, insurance broker and your vehicle of choice before making said purchase.
Lastly, fuel efficiency varies from vehicle, brand, age of the vehicle to engine type and is a strong factor to consider when purchasing your first vehicle. Fuel efficiency is the ratio of distance travelled per unit of fuel consumed by the vehicle. For example, diesel engine vehicles have a greater fuel efficiency than gas engines, meaning you can cover more distance with a diesel engine vehicle than a gas engine vehicle using the same amount of the respective fuel.
This is crucial to note based on your driving needs as you would end up paying more for fuel if you purchase the wrong vehicle.
Are you able to afford the maintenance, insurance and fuel-consumption of your vehicle of choice? If not, then you should avoid purchasing it altogether.
We hope these tips from Guardian Group assist you in purchasing your first vehicle and we wish you all the best with your decision-making. Happy and safe driving!