How to Finance Your First Car

Reader question:

I’m eighteen and going to buy a new car. What are the requirements for getting my new car financed?

Alyssa

It’s like this.

  • Credit. In order to get a new car at good rate with a good price and a good financing deal and so on, you need to have a good credit history. Most eighteen year olds do not, so this may be something you have to work on for a little bit before jumping on purchasing a new car. First you have to establish your credit, and then you have to take responsibility with it. That means paying your bills on time and keeping a hold of your self control.

Everything you do with your money is pretty much on file. This is a fact that you should learn as a teen, because a lot of adults act like they are ignorant and continue making choices that will have a negative effect on them down the line. If you go to the emergency room and don’t pay up, that goes on your credit report. So do bankruptcies, foreclosures, your payments on your credit card, everything. Record is kept of your arrests, as well. The things you do do not go unwatched.

If you do have some credit, you shouldn’t have too many accounts open. Don’t fill your wallet with credit cards. Just a couple will suffice. And never use over fifty percent of your balance. Pay off the full amount that you used every month, not just the minimum required payment.

  • Income. How much do you make a month. As an eighteen year old, it probably isn’t a lot. Financers require you to make, as a norm, at least sixteen hundred dollars in order for them to loan you money. If you don’t, you’re out the door. So if you’re just slinging burgers at McDonald’s, you might want to look into a cash car.

If you do have an income below the required amount, you don’t have to give up on your dream of buying a new car. You can get a co-signer, and with a co-signer your income will thus increase and you will be able to purchase your new car. Understand that you have to get a co signer that you trust, because they are sharing responsibility with you on this very big thing.

Cheers,

Fashun Guadarrama.

About the Author:

Austin Davis, consumer car repair advocate. "Hi there! I love to help people solve their car repair problems and I hope my site was helpful to you today. Thank you for stopping by."