null A Complete Auto Financing Guide for First-Time Car Buyers
Buying a car for the first time can feel like a rite of passage.
Maybe you’re transitioning from borrowing your parents’ car as a
teenager to having complete autonomy—emphasis on auto—to
purchase a vehicle that best fits your needs, lifestyle and budget.
Or, perhaps you’re tired of leasing vehicles every couple of years and
are ready to buckle down and drive something you can call your own.
As exciting as buying your first car is, it can be a bit
overwhelming. There are a number of steps in the car-buying process
that will require research, knowledge of your credit history and
paperwork to provide and/or fill out at the dealership. If you plan on
buying your first car soon, here are some answers to questions you may
have before you begin your car-buying journey.
How can I get auto financing to purchase a car?
Financing your first car purchase involves borrowing money from a
lender or receiving financing from a finance company and entering a
contract to pay the money back over time, usually in monthly car
payments. Getting financed through a bank, credit union or finance
company are typically the most common ways of purchasing a vehicle.
While car buyers with higher credit scores typically qualify for more
traditional auto financing options, car buyers with bad credit or no
credit history established can still qualify for subprime financing.
To know which types of auto financing you may qualify for, you need
to have a good understanding of your credit history. This can be done
by checking your credit report and credit score, which are usually
available through the three major credit reporting bureaus: Equifax,
Experian and TransUnion. You may obtain one free credit report from
each of the big three credit bureaus every 12 months, by visiting annualcreditreport.com.
What’s the best way to start the car-buying process?
Do your research. When you’re buying a car for the first time, it’s wise to do
as much research as possible before making your first car purchase.
Conducting a thorough assessment of needs (i.e. more space, gas
efficiency, etc.) will help you narrow your car search and determine
which vehicle best suits your needs. In addition, browsing
dealership websites and reading online reviews on sites such as
Kelley Blue Book or Consumer Reports is a good way to gain valuable
insight into the features and benefits your potential car has to
offer. The more you know beforehand, the more confident you’ll be
when it’s time for you to make your first car purchase.
Establish a budget and save for a down payment. Knowing how much car you can afford is another important
step in the car-buying process. Evaluating your monthly expenses
(i.e. mortgage or rent, utilities, student loans, cable and
Internet, etc.) can help you determine how much of your budget can
be allocated towards a down payment and monthly car expenses. This
article provides some great tips on how to save
and budget for your car purchase.
Start your credit approval. Once you’ve done your research and established a budget,
it’s time for you to start shopping around for financing options. As
we mentioned earlier, you may want to check your credit report and
score to determine the auto financing you may qualify for. If you
have a positive credit history, you may qualify to get preapproved
for a traditional auto loan. If you’re a first time car buyer with
bad credit or no credit history established, you may qualify for
subprime financing. Credit Acceptance is an indirect subprime
finance company that works with more than 12,000 car dealers across
the nation to help credit-challenged car buyers get approved for
financing. Once you fill out the form on our
website, we will connect you with three enrolled dealers in your
local area that can help you start your credit approval to purchase
What documents should I bring to the dealership?
Once you’re ready to make your first car purchase, there are items
you should bring with you to the dealership:
Pre-approval certificate (if you qualify for more traditional
financing, such as from a bank)
Proof of residence, income, bank account and insurance
Title and current vehicle registration (if you are trading in
Should I buy a new or used car?
This totally depends on your needs, preferences and budget. If you
want to save money and don’t mind doing some extra research (i.e.
checking the vehicle history report, car service records, etc.),
buying a used car may be the better option. However, if you’d rather
skip all the extra legwork and don’t mind spending a little more
money, buying a new car may be the right choice for you.
Credit Acceptance enables enrolled dealers to offer vehicle financing
on nearly any new or used car for first-time car buyers with little to
no credit history established. And, with on-time car payments, you can
improve your credit and move on to traditional financing. Simply fill
out the Start
Your Credit Approval form on our website to get started!