1 Set Your Real Budget
The #1 mistake: buying more car than you can afford. A car should cost under 15% of your take-home pay (including insurance, gas, maintenance).
Example: $25,000 Car, True Monthly Cost
⚠️ Don't Max Out Your Approval
Being approved for $40K doesn't mean you should spend it. Banks approve amounts that could stress your budget. Stick to 15%, not their max.
2 New vs Used
Used is almost always smarter. New cars lose 20-30% in year one. A 2-3 year old car saves you $8-12K while still having 90% of its life left.
💡 The Sweet Spot
Buy 2-4 years old with 25,000-50,000 miles. Someone else took the depreciation hit. Modern cars easily last 200,000+ miles.
3 Best First Cars
Reliable, affordable to insure, good safety ratings:
Honda Civic
Reliable, great MPG
Toyota Corolla
Most reliable, low insurance
Mazda3
Fun to drive, upscale
Honda CR-V
Practical SUV, holds value
Toyota RAV4
Reliable SUV, versatile
Hyundai Elantra
Great warranty, value
⚠️ Avoid These as a First Car
Luxury brands out of warranty (BMW, Mercedes, Audi), sports cars (high insurance), vehicles over 100K miles without service records.
4 Get Financing First
Get pre-approved BEFORE you shop. This gives you bargaining power and protects you from dealer markup on rates.
Where to Get Pre-Approved
- Credit unions — Usually best rates
- Your bank — Convenient, existing relationship
- Online lenders — Capital One, LightStream
💡 Building Credit
No credit? Consider a co-signer or a smaller loan with higher down payment. Making on-time car payments builds your credit for future purchases.
5 Inspect Before Buying
ALWAYS get a pre-purchase inspection (PPI) from an independent mechanic. $100-150 can save you thousands.
Quick Self-Check
- Check for uneven panel gaps (accident sign)
- Look under the car for leaks
- Start the car cold — listen for noises
- Test all electronics, A/C, heat
- Check tire wear for alignment issues
- Get a vehicle history report (Carfax/AutoCheck)
⚠️ Walk Away If...
Seller won't allow a PPI, there's a salvage title, odometer doesn't match records, or anything feels "off." Trust your gut.
6 Negotiate & Close
Know the CarGence Real Value before negotiating. Start 10-15% below asking, target 5-8% below.
Key Phrases
- "What's your best out-the-door price?"
- "I'm ready to buy today if the price is right"
- "I've done my research — similar cars are selling for [X]"
- "I need to think about it" (always okay to say)
💡 F&I Office
Say no to extended warranties, paint protection, fabric coating, and GAP insurance from the dealer. These are overpriced. If you want them, buy third-party later.
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