Car Buying Questions - What's the Best Car for a First Time Buyer?

Justin Reynold
August 16, 2009

Justin Reynold
http://www.insider-car-buying-tips.com

One of the most common car buying questions I personally receive or find asked on message boards and/or forums is, "What's the best car for a first time buyer?" It's a great question to ask, but it usually seems to be followed up with, "Should I go with the BMW or the Dodge Viper?"

The best advice I can offer in this situation is to look for the smartest car for a first time buyer and not literally the best car. Even customers with long and well paid credit histories are not able to purchase those types of cars and it's in your best interest when buying your first car to consider cars that you can...

1) Get approved for.

It's highly unlikely that any lender would loan the type of money it would take to buy one of those cars to a first time buyer. Even if a lender would loan that type of money the interest rate would be high (as is the case for most all first time buyer auto loans), which in turn would lead to an outrageously high monthly payment.

2) Comfortably afford.

As mentioned, monthly payments for high end cars for first time buyers can be huge and even though you may think that you can comfortably make an $800 to $1,200 a month car payment, I'd venture to say that it would be less than one year into your 5, 6 or even 7 year loan before you realize how big a payment that truly is.

So, what is the smartest "best" car for a first time buyer? Based on what we've covered above, it would be a car that you can easily get approved for and comfortably afford. In addition, you'll want to look at a car that serves your needs (i.e. gets you to work, to school, can hold all the kids, gets good gas mileage, etc.) and not so much your wants (i.e. lifted truck, flashy sports car, etc.), although you may still be able to find one that serves both, your needs should be priority one.

Keep in mind when buying your first car, that you are using this as a stepping stone to build some credit so that the next time around you can go after the car, truck or SUV that you want, but can do it affordably with lower rates and ultimately lower monthly payments. A funny, but relevant, saying to keep in mind is "that you are just dating your first car and not marrying it."

The best car for a first time buyer will be one that...

1) Serves your needs.

2) Is easily affordable.

You definitely don't want to get more car than you can easily afford and face late monthly payments and/or a repossession.

3) Helps you to build your credit.

Twelve months is typically considered the minimum amount of time that you'll need to make payments on a car before you are no longer considered a first time buyer. That being said, twelve months does not build much credit depth and I'd recommend more like 18-24 months before you consider trading.

4) Can be traded out of in a relatively short period of time.

As mentioned above, I'd recommend building at least an 18 month payment history, but with a $30,000 car the depreciation (negative equity) that you'd incur in that short period of time can make it near impossible to trade out of. The newer and more expensive your car the more negative equity you'll have and the faster you'll accrue it.

Stick with something that's in the $10,000 to $12,000 range and have the vehicle inspected prior to purchasing to make sure it is reliable. Less expensive cars will depreciate at a slower rate and therefore be easier to trade out of.

5) Lastly, on your quest for the "smartest" best car for a first time buyer, I'd recommend negotiating the best deal, using a 20 percent down payment and financing for a shorter term, like 48 months or less. These three will greatly reduce that negative equity factor that's had such a great, negative impact, in recent days, on car sales and car buying transactions.

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Justin has nearly twelve years experience in the car business and is currently employed as a Finance Manager for a new and used car dealer. He has been involved with tens of thousands of car buying and car sales transactions. If you've got questions, then he's got answers. You can ask your questions here:=> http://www.insider-car-buying-tips.com/car_buying_questions.html