Tips for teens looking to buy a car

January 5, 2009 · Filed Under Personal Finance

A teenager feels a lot of happiness when he gets his driving license. He feels like buying a car for himself right away but faces a hard time when he looks for one in the market. He is not mentally prepared about the costs and responsibilities that await him, otherwise he might choose to wait a little longer. Here are some tips for the teenagers when they try to buy their first auto.

A teenager always feels inundated when he sees the car commercials. But he cannot buy one because he does not have the money readily available, especially when the cost of the insurance, gas and a down payment taken into consideration. If you want to get a good deal from the car loan company, always put 20 percent down on the car, and take a loan for the rest of the balance. The time period should not go beyond 48 months. If you try to push those limits any further, you will start your adult life by being in debt.

Buy a used car, but buy it wisely. If the new car is not in your budget, then it will be best to go for a pre owned vehicle. But be careful in buying a used car. Because if you buy a car with too many mechanical problems, it will cost you more than a brand new car. It is important that you show the used car to a trusted mechanic and get it thoroughly investigated.

Establish credit. A lender will always like to check the credit history of a borrower before offering any new loan. Your chances of getting the loan will be dim if you have a poor credit history because of not paying the bills in time. You must make sure that you are making timely payments on your credit cards or the store cards and the creditors are updating your payments to the credit bureaus. This will show good credit scores in front of the lenders.

Tags: Personal Finance