We all have a dream car. However, most people do not start by buying their dream car. They start with a car they can afford and work towards their dream car.
In this article, we shall explore when to buy your first car. Get comfortable and put your seatbelt on.
Buying your first car needs planning. To plan better, you need to understand the current state of your transportation life.
Are you using public transportation? Public transportation may be cheaper and affordable, but its downside is you cannot control your time. A matatu takes time to fill up before leaving the stage, or if you board the ones picking people along the road, you cannot tell how long it will wait at a given stage. Therefore, when using a matatu, you have to give yourself more time allowance.
Secondly, matatus use a specific route. The matatu route might be far from your destination; hence, you have to connect using another matatu or pick a boda to take you for the rest of the journey.
If the matatu is becoming cumbersome, maybe it is time to consider a car.
On the other hand, you may not use the matatu often. You might have family members, colleagues, and friends who have vehicles, and they give you lifts from one place to another. Sometimes, you might even borrow their car to run your errands.
The challenge with this is you also do not have the liberty to control your time and activities. You will have to synchronize your life with that of the people who are assisting you. Depending on other people’s schedules can be an inconvenience.
In addition, you might be Ubering as a means of transport. While Ubering can be convenient, it has its drawbacks, too. You can control your time, but you are always riding with strangers. Furthermore, jotting from place to place in an Uber might be costly.
Nevertheless, if the transportation means you are using are inconveniencing your time and your schedule or are expensive, it might be time to consider purchasing your first car.
When buying your first car, the money question is the elephant in the room. When making any significant financial commitment, it is always wise to start from the budget. A budget allows you to plan so that a single financial decision does not adversely affect your life financially.
There are two ways you can prepare yourself financially to acquire a car. You might choose to save towards buying a vehicle, which might need you to cut back on some of your expenses to create more money for saving.
The second option would be to find a side hustle whose proceeds you shall direct towards saving for the car.
Two significant costs come with car ownership: initial purchasing and ongoing expenses. Most people get caught flat-foot when they buy their first car because they fail to factor in the ongoing expenses.
Nonetheless, the initial cost is the biggest obstacle to overcome first. The budget might be sub a million or a little over a million shillings for a first car.
Saving up a million shillings can take some time, especially if you earn an entry or junior-level salary. Therefore, you might look to finance the vehicle.
There are different financing options:
● Banks - Commercial banks offer different financing options to their customers. Some finance the total amount, and some finance the purchase partially. Every bank has its terms and conditions.
● Sacco loans - Sacco loans are offered to the members of the Sacco. They also vary from Sacco to Sacco, with every Sacco having its terms and conditions concerning car financing.
● Car dealership financing - Some dealerships also offer in-house financing options. Their conditions also vary.
● Asset financing companies - Asset financing companies specialise in financing assets, and vehicles are some of the assets they finance.
● Credit Unions - Credit unions operate like Saccos in that they only extend loans to their members.
The most important considerations when looking at car financing are the interest rates, the payback period, and any other hidden fees.
Do not be in a rush, or do not be rushed by a car salesman or a bank salesperson. Do comprehensive research to find the financing plan that works for your circumstances. You can start this research on Money254, where we shall help you compare different car financing products.
Read Also: 6 Key Steps to Saving for Your First Car
After successfully purchasing a car, there are other costs to consider. These are ongoing or maintenance costs. They include but are not limited to, fuel costs, parking fees, car wash charges, insurance, servicing charges, and unprecedented repairs.
While budgeting for a car, you have to ensure that your budget can accommodate all these expenses. With the current hike in fuel prices, you have to anticipate even more expensive fuel in the future. It would not be practical to commit a considerable sum to buy a motor vehicle that will only be packed at home because running it has become very expensive. Therefore, think through your decision thoroughly.
Your lifestyle and life stage influence the type of car you will consider for your first car.
If you are a person who wants a car that you can have road trips over the weekend with friends. Then, you are looking at a vehicle with some status. Therefore, your entry-level car might be a bit costly.
On the other hand, if you have a young family, you are looking at a car with a big sitting capacity and ample space to accommodate your family and their traveling luggage. A minivan might be the car you are looking for.
Furthermore, you might be looking for a car that you will use to commute to and from work and maybe double down as an Uber in the evenings and over the weekend. Here, you are looking at a very fuel-efficient vehicle.
As much as you are looking for an entry-level vehicle, the way you intend to use the car weighs heavily on the decision of the car you will choose to buy and, hence, the amount needed to purchase the car.
In addition, you have to keep in mind lifestyle changes. You might be single but are looking to start a family. In several years, your children might have grown to a certain age, hence different needs. Such lifestyle changes also contribute to your car purchasing decision-making.
Buying your first car can be an emotional decision. You might be nudged towards considering the option because most of your friends are driving or because you are just mildly inconvenienced by the other means of transport.
It is a great idea to delay the commitment to buy your first car and focus on building other areas of your life, such as improving your professional qualifications by returning to school or investing to create a new income stream.
Secondly, consider your long-term goals. Buying a car out of emotion might be a short-term goal that might derail your long-term goals.
Before committing to your first car and all the expenses that come with it, evaluate to ensure it is necessary.
How, then, can you tell that you need a car? You have to realise when your transportation means are inadequate. If your current transportation is leading you to lose out on significant things such as business, family time, and work, consider upgrading to a car.
You might also reach a stable financial position and can now afford a new car. This might be because of a promotion, a business growing, or having finished to offset a loan. When you reach a stable financial position to afford a car, go for it.
In addition, the car might be the short-term goal that builds up to the long-term goal. For instance, having a car and using it as a part-time taxi might be the extra income stream you are looking to build.
Read Also: Smart Ways to Cut Down Car Costs
Research is paramount when it comes down to which car to buy. Please do not hold back on researching the vehicles in the market, their models, year of manufacture, fuel consumption, availability of spare parts, and how they drive. You must immerse yourself in the research to make the best decision possible for your first car.
Also, consider whether to buy a new vs. a used car. A new car might be more expensive, but the maintenance costs might be low. In contrast, a used vehicle might be cheaper but have higher maintenance costs. Your research will inform how you choose.
But more importantly, seek advice from car experts, friends, and family who have been driving for a while. They know the nooks and crannies when it comes to car ownership. Consult with them before making a decision.
Buying your first car is an exciting achievement. However, you have to make significant considerations before committing to it. Most important is ensuring you can afford to buy and maintain the car comfortably. Do not rush into the decision. Take your time and find a financing model and a car model that suits your specific needs.