The problem is that even if you have a solid FICO score, that’s not the kind of score that many dealerships are looking at. They look a special FICO score just for car purchases that’s not open for viewership in the general public. This is a score that only rates you for the kind of behavior you’ve exhibited so far in life buying cars. When first-time buyers show up, they just get turned down for financing. It’s a terrible way to do business, but there it is. There are other hurdles that exist on your way to owning your first car too. If you are under 25 (especially if you are a male teen), getting your car insured can be extremely expensive.
Every car buyers guide needs to tell the first-time buyer this – that as tempting as it all seems, you just must never Get a car paying less than 20% down. Technically you could; but if you go and do it, you’ll be upside down on the car. What this means is this: the moment you drive the car off the lot, it loses value; at that point, you’ll be right away in debt for a larger sum of money than the car you hold in your hands is worth. And that is the situation you need to avoid at all costs. Only buy a new car if you can afford to put down 20% right away. And only if you can pay the car off in four years.
Why four years, you ask? You don’t want to be left paying for your car for five or six years. If you have to do that, it’s a sign that you’re buying a car that you can’t afford. It’s not just the repayment installments that you owe on the car you know – there other things that contribute to the cost of your car ownership experience – things like gas, insurance and maintenance. Far better than buying a cheap new car would be buying great quality used car like a Honda or a Toyota that can give you many years of trouble-free service. Remember, a car that you can’t easily pay off in four years, is a car that’s well above your level. It’s the formula, and it’s what every car buyers guide points you at.