Successful First Time Car Buying
For young people just arriving at the age when they can begin driving a car or those rapidly approaching this milestone in their life, much of many conversations with their parents turn to them getting their own car.
If you’re a parent about to engage in this type of subject matter with your son or daughter (As I have now for a couple kids), there are some very real reality checks you need to bring very much to light with your child.
First and foremost, and not to overstate the obvious, is the question of how do you plan on paying for the car? Of course, if you’re the type of parent who has the financial means and is going to just buy the car for your child, then you probably would have no need for this article. But, for those of us who firmly believe that our children should participate and learn these life’s lessons, you’ll want to read on.
One detail that you want to make sure that you bring home to the thought process of car buying for your son or daughter is that as long as they own the car; they are going to be paying for the car… even if they pay cash. Cars are an expense… they are a monthly hit to everyone’s budget… so they’ll never really stop paying for the car… and boy don’t we know this!
Get beyond the price of the car in your discussion of the financing. Be sure to make sure they and their budget fully understand such items as insurance, gas, maintenance… and those times when things break that aren’t planned for.
Let’s get back to the financing angle for the point of our discussion. You’ll want to insist that your first time young adult car buyer be in a comfortable position to put at least 20% down of the purchase price. Also, don’t allow them to consider financing beyond the 48 month mark. In fact, insist on this.
With finances and budget being very tight with first time young buyers; doing this will help get them into their car in a much better financial position. If they violate these basic parameters they may end up upside down in their car for the entire life of the loan, so stay firm and insist on this as their part of the deal.
A vehicle is not an investment… it is a depreciating asset. So, your young person needs to be sure that they fully understand the magnitude of this monthly expense. And that continually paying for a car that isn’t even worth market wise what you owe, is a very bad strategy. I’ve seen time and time again people that disregard these simple rules find themselves in an uncomfortable financial position when it comes time to trade. So stand your ground on this with your kids.
The assumption that this article is based upon is that your first time buyer is looking at purchasing a used car since this is by far the majority of the cases. But, if you are looking at the possibility of a new car for the first time car buyer then I must tell you that there are a whole other set of rules that apply that will keep you from spending way to much on a new car.
If it is indeed a new car purchase, you’re still in the right place. That is if you visit my website. Once there you’ll find all the tips, tools, and personal advice that’ll you’ll need to ensure that your car purchase is a good one for you.