Teen Drivers - 6 Tips for Financing Your First Car

Do you need a car to get to school and other extracurricular events? Want to finally put that newly acquired driver’s license to good use? If so, you might be ready to begin financing your first car. It can be intimidating to get a new one especially when you’re still a teenager but don’t worry as we’ll be sharing with you some tips on how to make that happen.

1. Stick to a realistic budget

The cost of a car can be expensive for someone your age so you’ll want to set something realistic. Think where you’re going to get the money from --your part-time job? Parents? Allowance savings? This will decide how much budget you can allocate for your first car. You might also want to learn about financing as this will allow you to have better options since you have a financial institution to support your car purchase.

2. Consider used cars

The best option for a first time car owner with a tight budget is to go for secondhand. You can find a reasonable used car for a good price these days. You just have to know where to look! Thankfully, we have the internet to help make the search easier. Do a quick search for second hand car sales in your area and pay them a visit. Look around for models they have available and take that into consideration with your budget.

3. Borrow from your parents

Another option for affording that car is to borrow from your parents. Let’s be real here. It’s not going to be easy getting approved for a bank loan especially if you don’t have that much credit history yet. Your parents might be able to apply for financing on your behalf. Or if they have the means, let them pay for the car in full and you pay them back every month with a certain amount. It’s cheaper to pay for a car upfront than to pay every month with interest. Another way they can also help is by co-signing the loan. This will increase your chances of getting approved since their credit history will be taken into account as well.

4. Think outside the box

You probably already have a part-time job which will help with financing your car but what if your earnings are not enough for the monthly payments? Easy! Find more sources of income. Again, with the internet, it’s easy to do that these days. You can sell goods for profit or get more odd lucrative jobs such as housesitting, babysitting, dog walking, running errands. This will help you earn money fast and pay for that car.

5. Get an auto loan

You have to be at least 18 years old to apply for an auto loan. This is another way you can finance a car. What’s good about it is that the requirements for getting one are not as rigid as certain institutions. You don’t need to have a long credit history and there’s a good chance you’ll get approved. The only downside to this is that the interest rates can be high. You can still get an auto loan, just make sure you pay it off as soon as possible.

6. Look into special financing

Car manufacturers know that a good chunk of their market are students so they have special financing for this particular demographic. Look into these programs and you might just qualify for a loan. They’re not going to look at your credit history alone but also your GPA, income, and down payment. These programs are also available at auto lenders.