Post # 6 How to buy a car.

I was 22 when I got my first car loan. My car payment was $160, insurance was $150(it goes down when you turn 25), my interest rate was 4.5% and my term was for 36 months. 

So the first thing I did was talk to my bank. I am in position where I can't have a cosigner on anything. So building credit has been pretty difficult. But if you have federal student loans then you have had to do the entrance loan counseling, there is a small section that recommends that you pay your interest rate while in school. Well this actually helped me build my credit. "No credit is worst than bad credit", this is what the loan officer at my bank told me, if I hadn't started paying my interest rate then I wouldn't have had any kind of credit. 

Either you will be approved or have to have some type of downpayment. 

I was approved with out a downpayment. I qualified for a $5,000 loan.

But my bank gave me a criteria, It had to be newer than 2000, have less than 100,000 miles  and cost less than $5,000. They do this so if they have to repo the vehicle then they can still make money off of it. 

So it was pretty difficult to find a decent car that met all the criteria in Topeka. I used the auto trader app and found a 2002 Ford Mustang in Kansas City at a small dealership. After the taxes and tags my loan ended up being $5,400. 

So the next time I decided to buy a car I had more a credit built and new what to expect. I looked for 4 months before I called my bank for a loan. I had a down payment of $2,000, I wanted a car with less tan 95,000 miles newer than 2009, four door, automatic and front wheel drive. I test drove over 8 different cars, from Meriden, Topeka, Kansas City and finally in Ottawa.  I didn't want to go high than $200 for my payments and I wanted to keep my car insurance below $140. Just a little tip, the lower the miles on the car the higher the insurance rate will be. I found my 2010 Dodge Caliber in Ottawa Kan. I started my search in December and didn't find it until after spring break. I was $8,000 but since I had $2,000 to put down and I took a loan for $6,500, again I took more than I needed to cover my tags and taxes. My payments now are $195.00, the interest rate is 4.9% and my insurance is $110.00 a month.

So here are the tips,

1. Know how much you can afford
2. Don't forget insurance - Call your insurance agent when you find a car they will give you a quote
3. Watch for cars- Search online, when I was looking I saw that a dealership had a car sitting for months, and they wouldn't budge on the price. Thats a bad sign, its not good for cars to sit for months.
4. Check the dealer reviews- a money hungry dealer isn't a good car dealer.
5. Ask your machinic to look at it- I test drove a Jeep Liberty, I wanted it but I called my mechanic to check it out and he found that it was in a car accident that was not report to the insurance so it didn't show up on the Car Fax.
6. Always ask for a Car Fax- its a bad sign if the dealer doesn't have a car fax.
7. Test Drive- Take it on the highway, drive it around. If you don't feel comfortable don't get it.
8. Inspect the Car yourself- I once test drove a car that had a gear shift that you push in with your thumb, the thumb piece was missing, broken glass on a tail light and the key fob was broken. The dealer refused to fix all of it so I walked away.
9. Trust your instinct- This in is the most important tips.

I hope this helps if you ever need to buy a car.