- Budget Wisely: Set a realistic budget that includes not just the purchase price but also ongoing costs like fuel, maintenance, and insurance.
- Do Your Research: Compare different car models and features to find the best fit for your needs and lifestyle.
- New vs. Used: Decide whether a new or used car suits your situation better, weighing the pros and cons of each.
- Check Financing Options: Explore loan options ahead of time to understand what you can afford and ensure a smoother buying process.
- Factor in Insurance Costs: Consider the insurance premiums for different vehicles as part of your decision-making process.
You’ll achieve countless milestones in life, but few are as exciting as buying your first car.
Already got the keys to your first car and wondering if you missed a step? Secure your success by getting a car insurance quote now.
Or, if you're gearing up to buy, keep reading for essential tips to guide your journey.
Purchasing a vehicle symbolises your hard work paying off, your ability to take on responsibility, and your newfound freedom.
However, buying a car is no child’s play; numerous factors must be taken into account.
This is why it’s essential to research various factors that go into not only buying a car but owning one too.
From there, you’ll be able to make intelligent and decisive choices.
Allow us to assist you in your car purchasing journey by covering the top five things to consider before buying your first car, including car insurance.
Your Budget
Another year, another shiny new car model with better specs and tantalising tech upgrades.
You wouldn’t be the first to fall victim to the FOMO (fear of missing out) of not owning the latest and greatest in vehicular excellence.
But one sobering reality is that your bank account might not be set up to handle such an expense.
Your budget exists for a reason. It isn’t there to be a buzzkill; it actually helps you set realistic expectations about what you can afford to spend on your new vehicle.
Buying a new car involves spending more than just on the vehicle itself.
You’re looking at other expenses, such as financing fees (if you’re not buying the vehicle in cash), fuel costs, repairs, vehicle insurance and regular maintenance.
Having a set budget allows you to plan around the cost that comes with having a car.
A car is an investment and a life-long financial commitment, so having a budget stops you from overspending on the vehicle and prevents you from failing to meet other financial obligations due to this overspending.
Budgeting also allows you to save for other goals like buying a house, planning a holiday trip or saving up for retirement.
What’s also important to remember is that cars are depreciating assets and will lose value the minute they’re driven off the dealership floor.
Therefore we’d caution against spending more than necessary on a new car, and a budget can help you do so.
Your Lifestyle and Needs
How you live, and your personal needs majorly influence the type of vehicle you drive.
Take someone with a large family, for example; they’d need to buy a minivan or SUV with plenty of storage and seating space to accommodate themselves and their tribe comfortably.
On the other hand, a single person or someone with a smaller family will cope just fine with a compact vehicle or a sedan.
The next thing to consider is the types of conditions you’ll be driving in.
Driving in a city with congested traffic means you’d best choose a small, comfortable and fuel-efficient car.
Not to mention parking; an area with tight parking would better suit a smaller vehicle.
However, if you drive in off-road conditions or have ample parking, it’d be better to opt for a vehicle with four-wheel drive (4X4).
It’s also important to consider your lifestyle activities.
Are you an avid outdoorsman (woman or person; we’re all about inclusivity here) who enjoys activities like surfing and camping?
In that case, you’ll do just fine with a vehicle that caters to these hobbies by supplying you with ample cargo space or has unique features like a roof rack.
Lastly, if you're a go-green enthusiast, you’ll likely want a car that reflects that.
A hybrid or an Electric Vehicle (EV) produces less emission, meaning less pollution to the environment, plus they’re fuel efficient, so you'll save on petrol costs.
These are just some factors that will help you narrow down your choices and find a car that fits your lifestyle.
Car Financing
Unless you plan on buying your new car in cold, hard cash, you must consider financing options.
This will require you to shop around for the best deal in terms of interest rates and loan terms to find the most affordable option.
The interest rate on your loan will determine how much you’ll end up paying back in addition to the vehicle’s initial cost.
And the loan amount and duration will affect your financial situation for that given term.
A longer loan term guarantees a lower monthly repayment. Still, the downside is that you’ll pay more interest throughout the loan.
These two factors are essential because they tell you whether or not you can afford the monthly payments on the car and help you plan and set realistic expectations.
For the next several months, if not years, your monthly car payment will take up a considerable chunk of your income, so it’s vital to ensure you can afford it.
It’s crucial to make your payments because, until you’ve fully paid off the car, technically, it still belongs to the seller/dealership.
Failure to do so may result in repossession; we highly doubt you’d want that.
One of the best ways to keep car financing costs down is with a large deposit.
A larger deposit can reduce the amount needed to finance the purchase, leading to lower monthly payments and less interest paid over time.
Car Insurance
As a first-time car owner, one of the most important things to understand is car insurance and how it benefits you.
Car insurance for a first-time car owner is as critical as destabilising a live bomb; if not done correctly, the results could be catastrophic.
Having insurance protects you from significant financial loss in the event of an accident.
If you’re found to be at fault in a collision accident, you could be liable for repair costs for damaged cars or property and medical bills for any injuries sustained.
The basic insurance policy almost every insurance provider offers is Third-party liability, which is highly affordable.
However, this coverage doesn’t extend to you and your car.
That’s why comprehensive insurance comes highly recommended.
A comprehensive coverage policy can pay for any repairs to your car after an accident or other non-collision-related incidents like theft, vandalism and damage caused by natural disasters, regardless of who’s at fault.
Comprehensive insurance, however, can come at a slightly higher cost.
Given the nature of the coverage, it’s not surprising that it is the most expensive option. However, factors like your age, driving and insurance history, and type of car can impact your insurance premiums.
While choosing the cheaper option to save money on premiums may be tempting, this could expose you to significant financial risk.
To find the best deal for your unique risk profile, consider shopping around for quotes from different insurers to find the best coverage to suit your budget and needs.
Comparison websites like Hippo can aid you in your search for the perfect price.
We strongly recommend choosing a level of coverage that offers adequate protection. Doing so will give you peace of mind, knowing you’re covered should the unthinkable happen.
Choosing the Right Car Dealership
Choosing which car dealership to buy your first car from is like a game of Eenie Meanie Miney Mo, but much more severe.
Dealing with a dealership can either enhance your buying experience or turn the process into a nightmare.
So, do your homework beforehand to save yourself the hassle of dealing with incompetent or shady dealerships.
If the dealership sells used cars, ensure the vehicles are certified, have undergone a pre-inspection, and have been refurbished.
Next on your to-do list is researching and reading reviews from previous clients.
Look for consistent positive feedback about the buying experience, customer service, and after-sale service. If there are any issues or complaints, pay close attention to how these were handled.
While we’re on the topic, customer service is equally important in determining your decision.
Is the salesperson assisting you friendly, patient and willing to answer your questions?
Are they patient and willing to help you find the right car for your needs, or are they pressuring you to make a purchase for their own benefit and not yours?
You need to feel confident that you're getting what you want and that the dealership will be there for you should you have any concerns.
You’ll also need to consider the location of the dealership.
A dealership closer to your home is convenient for test drives, paperwork, and future maintenance or service needs.
However, don’t let location limit your search if a more reputable option is available.
Conclusion
Buying your first car is an exciting but considerable undertaking that should be approached with care and thoroughness.
It's a process that extends beyond just picking a model you like.
It involves careful budgeting, understanding your lifestyle and needs, navigating car financing, getting the right car insurance, and choosing a reliable dealership.
By making informed decisions on these aspects, you can get a vehicle that suits your needs and aligns with your financial capabilities.
Remember, the thrill of driving off in your first car is incomparable.
Still, the satisfaction of knowing you've made a wise and well-thought-out purchase truly lasts.
Make another wise, well-informed decision. Click here to start your journey toward a smart insurance quote!
Remember these five critical considerations, and you'll be well on your way to successfully buying your first car.
The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply. Premium is risk profile dependent.
Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.
Team Pineapple
Team Pineapple comprises our company’s top talents, who are dedicated to creating clear, high-quality content on essential vehicle insurance topics. This diverse group, including actuaries, accountants, data scientists, and insurance professionals across South Africa, collaborates to produce enlightening and empowering articles.
Each piece is thoroughly researched, factually accurate, and rigorously reviewed to ensure quality.
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