Entering your twenties is one of the most exciting moments of your life. You're no longer a teenager, you're out of high school, you're legal, and the list goes on. With the rest of your life in front of you as you roll into and through your twenties, it seems more and more "adult" decisions have to happen. Buying your first car is probably the first significant financial investment you'll make. It can be easy to get lost in the excitement. At the same time, the car buying process can be an overwhelming one, and you'll want to be sure of what you are getting yourself into.
Is Buying a Car in Your Twenties Smart
Like everything in life, buying a new car has its pros and cons, whether in your twenties or fifties. The difference is that your life is just beginning in your twenties. As they say, "the world is your oyster." People in their twenties have this admirable wild ambition for life and have visions of grandeur to party with their friends, travel the world, buy a house, all while starting their career. These are amazing life experiences, but where does the priority fall in getting a new vehicle?
Many would argue that getting a car (even if a used car) that comes with a car payment and interest rate isn't one of the smartest financial decisions because often, twenty-something year-olds don't fully understand the reality of what life costs. On the other hand, people will say it's an excellent opportunity for you to understand financial commitments while building your credit score for your future, in addition to the credit card most 20-somethings have to help with creating good credit.
Understanding if You Can Afford to Buy a New Car
Okay, okay, every 20-something year-old has dreamed of having that uber-cool Jeep or convertible car; I mean, who hasn't? Everyone who turns 16 most likely tried to convince their parents it was the only vehicle option for you, only to find they had a different outlook. You ended up with a two-toned coloured vehicle where one colour was rust, but to them, it was mechanically sound and got you from point A to point B. Things are different now because you are considering buying your own vehicle. If this is your first time buying a brand new car, you may still need your parents to cosign an auto loan; keep that in mind before you knock the vehicle they bought you.
Start by breaking down your expenses to determine what you can afford for an auto loan, and do yourself a favour by being realistic. If you know you enjoy going out to dinner, and picking up Starbucks every morning, include those items in your budget; it will only help you. Don't start off by saying you will cut those out to afford a car loan because, truthfully, if you're that close on budget, you'll want to reconsider the purchase of a new car and look at used vehicles. Pro tip: never rule out buying a used car. There are tons of great options available for certified pre-owned cars at FFUN Cars
You may still live at your parents' house, but you have goals to move out one day, don't you? Along with the cost of rent, your personal finances include the cost of groceries, post-secondary tuition or student loan debt, and entertainment. Plus, besides the loan for your next car, there is also the fuel cost and vehicle maintenance such as oil changes. Call your local insurance company to see what it will cost for car insurance. Knowing your budget will help you determine if you can afford the cost of a monthly payment for a new car or if you need to look for an older car that doesn't have the high purchase prices that brand new ones do.
Find the Right Vehicle
As you are breaking down your finances and understanding what you can afford for monthly car payments, start making a list of your lifestyle needs and what car features you need to accommodate them. Since this is (most likely) your first car purchase, try not to go too crazy with wanting to have every bell and whistle because the more upgrades you have, the higher the sticker price becomes.
Enlist an experienced car buyer to help you through this process. There is no doubt your parents have bought a few cars in their lifetime, use that to your advantage and ask for their input. Visiting car dealerships can be overwhelming, and when a salesperson knows it's your first car, they are eager to use all of their cheesy sales tactics to make the sale, despite them telling you they have your best interest in mind. Or you could experience the no haggle pricing and convenience of buying your car with us, where you can avoid the commission salespeople.
When it's Time to Purchase Your Car
The decision has been made, you're going to buy your first car. Congratulations, that's a huge step, and we're here for you every step of the way. Well, that's if you want to avoid traditional car dealers and do it at your convenience, whether that’s online or in-store.
We're awesome at what we do and want to share some pointers. Before you begin the adventure of buying a car, whether online, through a dealership or via a private seller, know what you're working with for budget. When we say budget, we don't mean what you can afford; we mean what lenders will actually give you for loan terms. You may have thousands in disposable income, but that's not all banks and credit unions look at when determining the amount to lend out. Since you are only in your twenties and still working on building your credit score, you'll most likely qualify for less than someone more established. It's not a bad thing; it's just how the world of financing works. If you are confident you can afford more, this is your big moment to go to your parents and ask them to co-sign. Hint: bring some flowers or coffee home to butter them up for what you are about to ask. If you do have thousands of dollars available every month, consider paying for a vehicle in cash or use it towards a hefty down payment. Guess what? You don't have to go to a financial institution to get approved. You can do it right now, right here, and it only takes two minutes. Young people are all about fancy technology, so why not take advantage of our super cool technology that's the first in Canada to offer car loans 100% online?
We're going to say it, and we want you to know we don't like to, but you need to accept that depreciation is a real thing on vehicles. If you are buying new from a dealership, its value drops as soon as you roll off the lot. Don't take it personally, though, it happens to everyone and isn't a result of your age. At this point, we would usually tell you to consider a trade-in, but we're going to assume (sorry if we shouldn't) that you don't have a vehicle that could be traded in and used toward your next car. With that said, definitely sell it privately as a teenager is waiting to pick up their first car as if it is some sort of 16-year-olds right of passage.
Admit it; if you're in your twenties, you spend a lot of time on your phone. Even older generations are spending more time on their phones, too. As we partake in more and more human interactions virtually, the anxiety builds when having to speak face to face with someone, hence why buying a car online is so appealing to the younger demographics. Millennials and GenZs don't like the idea of conflict, so purchasing a vehicle through a dealership could send them into an anxiety-ridden spiral when negotiating with a cheesy old-school car salesperson.
Some would say (and we won't argue) that buying a car from FFUN Cars is the number one way for twenty-somethings to buy a vehicle. If you're in your twenties and need a new car, give us a try. You can buy at your own pace without all the harassment and pressure, save time (and gas money) going from dealership to dealership, and save money on the purchase because we don't mess around with negotiating or jacking up the price.
Upgrading your old car for a new one is exciting, especially when shopping around and taking a bunch for test drives. Stick to the basics of buying a car, though. As you look at vehicles, ask about resale value as certain brands and makes such as a Toyota Corolla or Honda Civic have great resale value. Do yourself a favour, and check out the massive inventory at FFUN Cars and the amazing car prices that don't have any hidden fees. What you see for sticker price is what you pay. So, come on over - online or to the store. We can’t wait to meet you.
