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First-Time Car-Buying Deconstructed

buying a car
Milkos on Deposit Photos

Before making the biggest purchase of your life, you have to ask yourself, “Is this the right choice for me?” There are hundreds of different cars all varying in price and interest rate. Knowing how to correctly look at car listings can save you hundreds of dollars and years of making payments — and you might want to ask yourself if having a car is actually necessary.

Analyzing the car facts

With down payments and interest rates, buying a car has to be a carefully thought-out decision. The key is to buy the best car possible while paying for it in the shortest amount of time. You want to make sure the interest isn’t too high, where the car payment is affecting your day-to-day life. A rule that many follow is 20/4/10.  Make a down payment on a car for 20 percent, your loan shouldn’t exceed four years (so have the car financed at a maximum of 4 years) and don’t let the total monthly vehicle expense exceed 10 percent of your gross income (including insurance).

This rule puts the buyer into a position to get the best possible car without spending years paying it back or paying too much month to month. You have to be smart when looking at different car offers. Just because the monthly rate is low doesn’t make paying that rate for eight years a good idea.

If you are looking into used cars, look more into the car than just the price. Some cars can be the same exact model but have different prices because one is more damaged than the other. Try and get as much information as possible for used cars. Asking questions like has the dealer serviced the vehicle? And have the tires been replaced? Will help you see what the true value of the car is. You don’t want to run into the situation where you have to take your cheaper, used car into a body shop and pay more to get it fixed than buying the higher-priced used car.

Alternative rides

After you look into getting a car and you don’t find a price that’s right for you, you might want to look into alternatives. While in the past buying a car was the only option to transport yourself from place to place, technology and growing cities have made living without a car possible. City light rails and commuter rails make it easier to move around your local area. You also can use Uber or Lyft to get to a friend’s house or meet up with others at a restaurant. And for days you do need a car, you can use a carshare service where you rent a car by the hour. If you live in a city with efficient public transport and access to car pick-up services, this might be a viable option that can help you save thousands of dollars that you could you use for a car you want down the road.


Choosing if and what car to buy shouldn’t be a quick decision. Take your time and create a budget that gets you a nice car without making you broke for years. A car should be a tool that enhances your day, it shouldn’t be something that punishes you financially. Look at the overall picture of the time and money you will have to put into the car you want and ask yourself a question: Is this investment worth it? Whatever the answer is, I hope you get to your destination.

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