My First Car (Loan)

Ashleigh Smith, Marketing Coordinator, Fargo South, Member FDIC

Buying your first car can be nerve-wracking, but it doesn’t need to leave you with fried nerve endings. By approaching the task realistically and with a couple sidekicks, you can have your car, and drive it, too!

Soon after graduating college, I was looking to solidify my transition into adulthood by purchasing my first vehicle on my own. At first, I was excited, dreaming of a shiny, black SUV. After a couple days of searching online and seeing the huge price tags, I got discouraged. Then, I got realistic. Buying your first car is overwhelming and I realized that I couldn’t do it alone, so I called in reinforcements that I could trust. My grandpa and my personal banker.

My process was broken down into three main steps: Financing, Choosing and Enjoying.

Financing the Car
When you are looking to buy your first car, the first thing to consider is budget. What you think you can afford and what you can actually afford, I learned, are two totally separate things. I sat down with my grandpa and looked over my spending to create a budget. This gave me a realistic view of how much I could truly afford to spend, not cutting myself short of saving for emergencies.

After I determined a monthly payment that I could live with, I went and talked with my personal banker. Using that amount, she determined a range that I could spend on a vehicle. I opted for the lowest total purchase amount, as it would be with me having a 3 year loan, rather than a 4 or 5 year. At that point, she pulled my credit report to help determine the interest rate I would qualify for. I didn’t have any credit history – so my grandpa offered to co sign on the vehicle loan so I would qualify for a lower interest rate.

With the ease of knowing I was pre-approved, I started confidently searching for my dream (within the budget) car.

Choosing the Car
There are several features of a car that can affect your budget, both at the time of purchase and in the future. Monthly and annual upkeep costs are influenced by the car’s place of purchase, brand and year.

Here is a list of questions to ask yourself when looking at a car:

  • Are maintenance records available?
  • What year is the car? How will that affect my loan?
  • How will the type of car affect my insurance?
  • How will the brand (foreign or domestic) affect the cost of repairs?
  • Do I want to buy from a private seller or through a dealership?
  • What type of gas mileage does the car get?

Talk through these questions with your sidekicks. Chances are, they have been through this process before and can help you make your decision.

Enjoying the Car
After all the tough decisions I had made, it felt great holding the keys to my brand new-ish car! Below is a picture of myself and my grandparents, just after college graduation.

Ash & Grandparents

No matter where your car buying journey takes you, you can have peace of mind knowing that an FIB&T personal loan expert is only a phone call (or short drive) away!