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What Should You Be Looking for in Your First Car?

If you are like most young people, you dream about the freedom that you will get, when you finally reach that magical age and can apply for your driver's license. When the day arrives, you will also be looking for a set of wheels that you can call your own but will quickly find out that there's a lot involved. As there are many potential hurdles to overcome, how will you buy your first car as a teenager?

Finding Your First Car

With a car of your own, you will be able to head to the beach on a summer's weekend, take your friends for a ride or use your vehicle to commute to your dream job. Yet you need to find one first, and then work out how you're going to both pay for it and get it on the road.

You may be lucky and have a financial resource that you can tap into, but otherwise, you'll undoubtedly need to focus on the cost. You must take into account not just the price of buying your first car, but also the cost of running it. In particular, you will have to pay attention to the insurance, due to your age and perceived risk.

Buying Second-Hand

While new car manufacturers have some special incentives available and you may be able to take advantage of a no deposit program, many people in your situation will focus on a used car. If you are shrewd, you will find something that is still relatively new yet a lot cheaper than something with zero miles on the clock. After all, you may be able to pick something up with many extras and upgrades without having to pay a premium.

Remember, the insurance premium will partly reflect the value of the vehicle unless you opt for third-party coverage. This will typically pay for damage to another person's property but not to your own, should you be responsible.

First-Time Car Buyer Loan

Many people in your position may have little credit history, simply because they have not had the time to build it up. This drawback may make it more difficult but not impossible, but what do you need to know about buying your first car with no credit?

Some lenders will use alternative credit scoring factors. Therefore, they may consider the fact that you have a bank account in your name or receive a monthly cell phone bill. If these are in good order, this may go in your favour. Often, however, they'll understand that having no credit is not the same as having bad credit and may be more sympathetic.

Can you get somebody to co-sign next to your name? This person will usually be somebody close to you, but you will have to be ultra-reliable and always on time with your repayments. If not, the co-signer will be liable, and you could damage their credit history as a result.

Costs: Insurance, Tax and Fees

Insurance premiums can be a nightmare for teenagers. These companies use many different factors when they work out each premium, and you may want to get a quote or two before you buy. The smaller the engine and the cheaper the vehicle, the better, but companies may consider where you live and what you do as well. Nevertheless, some insurers will offer a discount if you use onboard telemetry. This technology will keep an eye on your driving habits and let them know if you are less of a risk.

These days, car tax and fees can also come into the picture. The government will levy a tax against your vehicle based on how efficient it is from an emissions point of view. If you can afford to buy an all-electric model, then you won't need to pay any tax at all, but otherwise, be careful and check the emissions rating of any used-car first. The older and less efficient it is (and especially if it is a diesel), the more you may pay.

If you live in London (and soon, some other major cities), you may have to pay a premium to drive a polluting vehicle every day. The Ultra Low Emissions Zone will soon extend to cover all Inner London, and if you need to drive within these streets every day, you should buy a vehicle that conforms.

Warranty

If you can, buy a vehicle that has an existing manufacturer's warranty. Some companies offer a programme that lasts for five years or more, so if you buy a two-year-old version, you will still have several years of warranty left. Remember, most of these warranties will only cover parts that are not "consumable," so you still have to budget for brake pads, or oil filters and other items. You may be able to buy an extended warranty from certain companies to give you additional peace of mind.

Budgeting

Budget carefully and ensure that you have enough cash to run this vehicle through the year ahead. Take into account petrol, tax, fees, consumables, parking and an annual service visit. If you do a lot of mileage, you need to apportion the cost of replacement tyres through the year as well.

Being Practical

Try to be practical when you are buying your first car. While it may be tempting to get a sports car of some kind so that you make a good impression when you're out on a date, do you really need to? A vehicle like this may cost more to insure and will probably cost more to run and maintain. Look for something that is reliable and has good fuel efficiency first.

Safe and Sound

Finally, never forget safety. While you will always want to drive within the limits of the vehicle and follow the Highway Code, you will want to know if the car itself is safe. You can check its' safety rating before you buy through a company called Euro NCAP.

In Closing

If you are sensible, practical and plan carefully, you can get behind the wheel of your first car soon after you score that coveted driver's license.