Your First Automobile: Pros and Cons of Car Financing in 2024

When it comes to buying your very first car, the chances are that purchasing a brand new vehicle outright might be more than your budget can handle. While it might be possible to buy a brand new car in one go, most people tend to opt for alternatives on the market.

For example, some might opt for financing their preferred model – perhaps even going for a second-hand vehicle, especially since you can save plenty of money by going the second-hand route.

That said, it can be challenging to jump right into financing if you do not know what you are doing. There are a few beginner’s pitfalls to watch for, and it will undoubtedly be better if you make preparations before purchasing a new vehicle. You can use services such as those provided by if you are unsure, as it is a great place to start. That said, here are a few things to keep in mind when financing a vehicle.

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On the subject of purchasing a second-hand vehicle

Before getting started with most of the financing tips, there are a few things to watch out for when it comes to buying a second-hand car. A few tips include:

  • Ensure that you bring a mechanic with you – While the car dealership might have a sterling reputation, it never hurts to add an extra layer of security. Having a mechanic accompany you when buying a second-hand vehicle will allow them to provide a much-needed second opinion on matters regarding the car. You never know what potential problems they might find!
  • The test drive is mandatory – While it is technically optional to take the car out for a trip from the dealership, there is a lot that you can figure out by going on a test drive. From potential problems to only not having an enjoyable experience, there is a lot that a test drive can offer.
  • Always build a list of potential dealerships – While you might come across a quality dealership on your first try, it always pays to err on the side of caution. It is never a bad idea to collect potential services that have the model and make that you want. That way, you can get as much information as you can and make an informed decision when you finally compare dealerships.
  • Do not bother with peripherals – When it comes to financing in general, peripherals and accessories can bog down the deal if you are not careful. It would be best to buy the vehicle and purchase accessories another time, as there could be hidden charges through interest.

Do not always go for a longer-term

A longer-term is typically more desirable for those financing a car due to how easy it can be to pay. However, it might surprise you just how much interest can skyrocket for more extended contracts. That said, there is a chance that you might come across a long-term deal with little to no benefit – it all depends on the dealership you are using. At the very least, stay informed when it comes to just how much extra money you have to pay over the months when choosing longer terms over shorter contracts.

Additional fees? Cash is your best bet

Similar to the act of paying for peripherals and accessories, if there happen to be other purchases outside of your car, paying for them in cash is the ideal scenario. While it might be tempting to include them in the financing deal, the amount you eventually have to pay can add up exponentially. By paying cash for any accessories, peripherals, or anything else apart from the car itself, you’ll be saving yourself a lot of trouble in the future.

Is your credit score affecting your financing deal?

Checking your credit score is a best-practice method of keeping risks low when financing a vehicle. While it is still possible to push through with a financing deal on a car even with a low credit score, it could end up, resulting in a higher interest rate. The lower your score, the more likely you are to be charged more. At the very least, it can show you which dealerships make use of your overall credit score when financing your potential vehicle.

While you might not necessarily be able to make significant changes to your credit score overnight, it allows you to search for a financing quote that might not necessarily rely entirely on your credit score.

Financing quotes matter

While you might feel quite lucky to end up with a great deal right at the beginning, it would be better to collect financing quotes before coming to a decision. The same thing goes with searching for second-hand dealerships and finding the best possible deals for you and your dream car. It is never a bad idea to collect quotes as it gives you an idea of how specific elements can affect the overall price of the vehicle you wish to purchase.

If anything appears sketchy, avoid it

If there is anything that confuses you about a financing deal, ensure that you ask questions – and that you get answers. If you are unsatisfied with the response, the dealership is providing. It would be best to look elsewhere.

While they might not necessarily be hiding anything, purchasing a car is all about understanding the ins and outs of the transaction. If a dealership is making it challenging for you to understand the specifics of your purchase, you are better off looking elsewhere for a good deal. Communication matters when it comes to dealerships, which means that any service unable to provide decent answers is not worth your time or money.

Financing a car is not something to be taken lightly, and there are plenty of potential mistakes to be made during the process. However, you do not have to resign yourself to trial and error – the tips above are more than enough to help.