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Published on February 20th, 2019 | by Jones

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How to buy your first car as a graduate

Being an adult starts after you’ve graduated. Everything becomes a milestone, from finding your dream job, moving out of your parent’s house, and purchasing your first car.

 

However, buying your first car might seem impossible at the stage when you’ve just started working. But, luckily there are ways which you could buy your own car once you’ve graduated. Here are a few helpful tips on buying your first car.

Create a budget

Your budget should consist of all your monthly expenses. A carefully planned budget can assist you when searching for your car. Your budget will show you how much you can afford to put aside for a car. You won’t only be paying for a car so when you’re creating a budget make sure you think of car expenses such as petrol, maintenance, and insurance.

 

Most people can’t afford to buy a car and often go for vehicle financing which is something you could do. However, it would be beneficial for you to save up for a deposit, that way you can lower the amount you owe the lender and lower your interest rate.

Find a suitable car

You need to choose a car that is right for you and your needs. One key thing to do is look for a car that’s low on fuel consumption. With the rise of petrol prices in South Africa, it would be wise to choose a car that uses less petrol.

When choosing a car also keep in mind the maintenance. Don’t buy a car that has parts which are inaccessible. Since this is your first car and you might not know much about vehicles, a car with accessible parts is a sensible choice.

There are a few other things you need to think about, such as do you want a two-door or four-door car? If you’re part of a big family it would be best to get a four-door. The kind of road you travel on and if you often go on long-distance trips that would guide you to the kind of car you would choose to best suit your needs.

You should also look into which safety features are important to you. Do you need a car with, anti-lock brakes, driver airbags, front passenger airbag? If so shop around and look for a car that meets those requirements.

Obtaining credit

Most graduates don’t have much of credit history. At first, you could only get finance once you had a good credit score. But, now if you’re a graduate looking for graduate finance to buy a car, there are lenders who offer those options. With graduate car finance, you can get a tailor-made package with lower interest rates ideal for graduates.

In order for you to get credit, you should have obtained a university degree or diploma within the last three years. You need to be 31 or younger, be employed and meet the affordability requirements. If you are unsure of anything its best to ask your lender, there are financial advisors who understand and who can offer you assistance to ensure you get the best deal for yourself.

Check your affordability

Before going to an authorised financial service provider it would be best to calculate your expenses. Calculate all your monthly expenses and see how much you have left after paying your living expenses.

Most lenders now also have a vehicle calculator, where you can calculate an estimated amount of how much you will pay for your first car. With the calculator, you can also look at your interest rate and make a decision from your findings. If you’re struggling to save up for a car, there is graduate car finance available for you.

Brand new or second-hand car

Once you have been pre-approved by a lender, you have options on what type of car you would like. You can either buy a brand new car or opt for a second-hand car – both have their own pros and cons. However, always remember that a car is a necessity and not an investment as cars depreciate in value very quickly.

You also have an option of either buying from a dealership, privately, or through an auction. A benefit of having a brand new car is that you won’t have to worry if it’s in good condition as you will be the first driver. But, you could find a fairly new car in good condition at an auction or at a second-hand car dealership.

Insure your vehicle

Once you get your vehicle it’s important that you insure your car. Car insurance is very important, as many cars owners get involved in car theft or an accident. Having insurance allows you to drive with peace of mind.  Bear in mind that your car is still under finance and you would still have to pay should it get stolen.

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