As a first-time vehicle purchaser you might be tempted by advertisements that state as a first-time buyer you can get a special finance package on a lease or for financing of a new vehicle. BEWARE OF THIS! Often you will get a worse deal using this strategy because of your status as a first-time buyer you often have little credit history. This means you will have to pay a higher Annual Percentage Rate than normal because you have not proven your ability to pay this vehicle off.
Going through a dealership for financing might be your only option if you do not have a good credit history, but you can still negotiate and do not have to settle for their first offer. If you have good credit you should try other financing options such as a bank, credit union, or finance company because you will get a much better deal. Keep in mind that dealerships are middlemen in the actual financing of your loan.
Remember: Any deals you make you want to establish credit for yourself and you must be the primary person responsible stated on the finance contract to start building your credit. If your credit cards are under your parent’s name or you have your parents pay for things and you pay them back; this does not establish credit for you because the responsibility for payment on the contracts does not lie directly with you.
Also, keep in mind how much you will have to pay for insurance on the vehicle you want to purchase. Males under the age of 25 pay the most for insurance so this fact can hit you hard in the pocketbook on any vehicle you want to purchase. Also, if you are in school and you get good grades you might be eligible to receive a discount on your insurance costs through your insurance company.
In the end, be wary of dealership special offers and remember you are not tied to them as an only option for financing in most cases. Shop around and do some homework, go to consumerguide.com and other websites and get some information before you walk into the dealership. Therefore, you will have some ammunition plus you can save yourself some money and begin building credit for yourself.