Buying a new vehicle is exciting for first-time buyers. The choice of vehicle is a foregone conclusion for some and a long search for others. However, it helps to have a checklist and guide to make an informed decision as buying a vehicle involves a considerable amount of money.

• If you are a person with no established credit history, there are a number of barriers that could get in the way of you owning a new vehicle. Your payment options, who will finance you, insurance quotes, managing gas, maintenance, and unexpected expenses will have to be worked out. It is advisable for first-time vehicle buyers to opt for a vehicle that is affordable and can be paid off within 48 months. It is sensible to be in a position of not owing more than the worth of the new vehicle. It is important to consider the safety of the vehicle as well.
• There is no remorse period after buying a new vehicle. Some people erroneously think that they can shop for new vehicles after already buying one and exchange it. This is an unethical way to do business and is not entertained by most dealerships.
• As you have never bought a new vehicle, there are certain barriers and concepts to keep in mind while looking out for a new vehicle. The biggest barrier is the lack of credit history, which makes it difficult to get a first car loan. Also, lenders are more willing to finance new cars than used cars. Insurance must be added in the annual cost budget as it is illegal to drive without insurance. It is to be noted that insurance rates for teens and single males are normally expensive.
• Most young adults who have not yet established credit because their parents have been footing the bill have to understand the subject of vehicle financing and the importance of credit history. Lenders usually want to see an established pattern of paying bills before approving a loan for a new vehicle.
• It is important to establish credit by being responsible and repaying the loan on time. It might require a waiting period of six months to a year to buy a new vehicle while your credit is established.
• When lenders reject a new vehicle loan application, a co-signed loan can help establish credit. In such cases, the loan would be in the name of the buyer and the parents of who has co-signed the loan. Any default on this type of loan would leave the co-signer in jeopardy. Sometimes dealers trick the co-signee into signing the wrong line of the loan papers so that the loan ends up on the cosigners’ name. This is known as a straw purchase. Legally both parties have to be present and sign at the same time and any corrections should be made then and there. It is advised to never leave the income section blank on the application as the dealer could quote an incorrect number just to get the application through.