Buying your first vehicle can feel intimidating and maybe even a little overwhelming, but understanding the process ahead of time can help you shop confidently. Financing, insurance, hoping that your research has been thorough enough, there are several decisions to make.
We made this guide to to break down the vehicle buying step-by-step for first-time buyers in Goldsboro and Eastern North Carolina so that you can buy with confidence.
Common Concerns for First-Time Car Buyers
When you are buying that first car, the world of auto financing feels like it is full of unknowns. Is this the right decision? Will this car last me a long time? Those are all normal questions and concerns to have and we hope to help settle some of those worries in this post. A few things you do want to keep in mind while you search are:
- Understanding Monthly Payments
- Building Credit Through Financing
- Choosing a Reliable Used Vehicle
- Avoiding Hidden Fees
- Understanding Insurance Costs
- Finding Affordable Down Payment Options
Lets see if we can help break these common concerns down a bit.
1. Understanding Monthly Payments – Your monthly payment on a vehicle includes your vehicles sales tax, DMV & dealer fees, your APR, and the car itself. Your APR (Annual Percentage Rate) plays a large factor in your final payment. The lower the APR the less it affects your payment. The APR is determined by your credit score/history. As a first-time car buyer it is more common to have a higher APR than someone who has financed several vehicles before. When thinking about your monthly payment, you need to consider your monthly insurance premiums as well. If you have had a license for a while and are a fairly safe driver you will see that reflected in your monthly rates. It’s good to include this in your vehicle budget so you make sure to stay in your comfort zone.
2. Building Credit Through Financing – Like we mentioned previously, your first auto loan may have a higher APR than say someone who financed several vehicles. However, if you make that first car payment on time each month it will help to build your credit and when it comes time to finance that next vehicle you are in a much better spot to qualify for a better APR!
3. Choosing a Reliable Used Vehicle – This can be difficult because we don’t know the unknown. Since we cannot know the future its important to do your research about vehicle reliability and to test drive the vehicle that you land on. If your research shows that a certain make and model has costly transmission issues after a certain mileage point then you of course want to do your best to avoid that particular vehicle in your searches. However, anything can happen, you don’t know you need a new lightbulb at home until you flip the switch and one goes out. So, regardless of the vehicle you choose, you may also want to explore any vehicle service contracts the dealership has to offer to help give you added peace of mind.
4. Avoiding Hidden Fees – There are fees that you have to pay when you buy a vehicle. You have to pay your vehicle sales tax, your DMV fees, and if you are buying through a dealership you will have to pay the Dealer Admin Fee (commonly called the Doc Fee). If you happen to be financing you also have to pay interest (which is factored into your payment). However, some dealers will add additional fees such a a “prep fee” or “advertising fee” that they may not disclose until near the end of the sale as a way to boost profit. Pay attention when you are presented the pricing structure for your vehicle along with the payment options. Dealers may also include vehicle service contracts, which are optional, but as we mentioned before this may be something you want to include with your purchase.
5. Understanding Insurance Costs – Your vehicle insurance cost is a huge part of your vehicle purchase. Many people pay their insurance premiums month to month just like their car payment and you should absolutely factor this in to your monthly budget. Keep in mind, if your car payment is $500 per month and your vehicle insurance is $250 a month, then your monthly budget for that car (not including fuel or maintenance) is $750 a month. Always make sure to get a quote from your insurance prior to finalizing your car purchase.
6. Finding Affordable Down Payment Options – When you are a first-time buyer auto lenders may more greatly limit the amount of money they allow you to finance even if your income supports a higher budget. Which means if a lender approves you at $20K total financed and the vehicle you are looking at comes to $23K total financed, you would need to cover that $3K difference. So to find a more affordable down payment in this case would be to find a car that is closer to the approved total financed amount. If you have a current car you can trade this can be a big help for first time buyers and it counts towards your down payment if its paid for.
How Much Should a First-Time Car Buyer Spend?
One of the first things you need to figure out as a first-time buyer is your monthly budget. This important step is often at least partially overlooked.
Your monthly budget isn’t just your vehicle’s monthly payment. It’s a bit more.
- Monthly Payment
- North Carolina Vehicle Insurance
- Gas
- Maintenance
- NC Registration/Taxes
A good rule of thumb is to try and keep your total car expenses under 15-20% of your monthly income. So when you are looking around for that first vehicle, don’t just shop on monthly payment alone. Keep those other factors like insurance, gas, and maintenance in mind.
Browse our budget-friendly vehicles for first-time buyers
[Affordable Vehicles Under $25K]
Is New or Used Best for a First-Time Buyer in Goldsboro?
Which vehicle makes the most sense for your budget and needs?
- Warranty
- Newest Technology
- Lower Maintenance Early On
- Lower Payments
- Lower Insurance
- Slower Depreciation
Besides looking at new vs used, as a first-time buyer you also need to think about what vehicle type makes the most sense for you. A reliable used SUV, a fuel-efficient sedan, or maybe a practical truck. Every person is different and every person’s vehicle needs are different. Find what works best for you.
Understanding Credit Scores & Financing.
Can You Get Approved with No Credit History?
Yes, it is possible to purchase a vehicle with limited or no credit. The finance terms you receive will be reflective of your credit score/file. Your credit score is basically a numerical representation of how likely you are to repay borrowed money. Our finance team regularly helps first-time buyers here in Goldsboro, Wayne County, and surrounding Eastern North Carolina areas.
What is APR? – APR is the Annual Percentage Rate, which is the total annual cost of borrowing money to purchased a vehicle. It’s expressed as a percentage. It includes both the interest rate and any additional fees or charges associated with the loan.
Your score, along with your credit file, can affect your interest rate (APR), down payment amount, loan term, and need for co-signer. All of these items play into that monthly budget we mentioned early. A 9.99% rate on a vehicle will give you a lower payment than a 19.99% rate on the same vehicle. Here is an example. For $20,000 as the total amount financed here are how some different rates would change the payment.
| Amount Financed | Term (in months) | APR | Monthly Payment |
| $20,000 | 72 | 9.99% | $371.96 |
| $20,000 | 72 | 19.99% | $482.93 |
| $20,000 | 72 | 29.99% | $609.07 |
See what we mean? For the same amount financed ($20,000), and the same term (72 months, 45 days until first payment) that difference in APR makes a substantial difference in your monthly payment. You can check out our Payment Calculator if you want to see how different rate, down payments, loan amounts, and terms would change your monthly payment.
Choosing the Right Vehicle
The right vehicle for your neighbor, might not be the right vehicle for you. Your lifestyle and needs help to guide you in the direction. Factors to always consider when choosing that vehicle are its reliability, fuel economy, insurance costs, and the overall affordability of the vehicle. Keep that in mind as you choose the vehicle that best meets your lifestyle needs.
Are You a Student from ECU, Wayne Community, or surrounding college?
- Compact Sedans
- Small SUVs
- affordable used cars
Eastern NC Family?
- SUVs
- Safety-Focused Vehicles
- Seating Capacity
Are You a Commuting to or from Goldsboro?
- Fuel-Efficient Models
- High Reliability
- Comfort
What Documents Do You Need to Buy a Car in NC?
You will need a few things when buying a vehicle here in Eastern North Carolina. It’s good to bring the following with you when you visit the dealership.
- Driver’s License
- Proof of Income
- Proof of Residence
- Proof of Insurance
- Cosigner (if applicable)
- Trade-in Information (if applicable)
- Down Payment Options
What Should I Look for During a Test Drive?
During your test drive you want to make sure that the vehicle is comfortable to you but you also want to make sure it is safe. We see a lot of wildlife out here in Goldsboro and Eastern North Carolina on our rural drives to and fro so how the vehicle handles and fits you should definitely be something you consider.
- Can you easily see our of it?
- Does it accelerate well?
- Does it brake well?
- Is the technology intuitive?
- Is it noisy and distracting?
Here at Doug Henry Buick GMC our test drives are able to include both city and highway speeds. Which gives you an added bonus of know how your vehicle will handle when its times to merge, or exit, or in stop and go traffic.
Don’t Forget the Vehicle History Report
Ask for that CARFAX report! If you are looking at a used vehicle there is a chance it has been involved in an accident. Honestly, most accidents are minor damage, which is usually cosmetic including dents or scratches to the vehicle body. A CARFAX also lets you know where the vehicle has spent its life thus far. If the vehicle has spent its life here Wayne County or anywhere in North Carolina then you know what kind of weather conditions it has been a part of. However, if your CARFAX shows that the vehicle you are looking at spent several years in say New York, then you know that they see a lot more snow, and thus a lot more salt on their roads. Salt can have negative effects on the car’s under carriage so make sure to take a peak if you see that the car you are looking at is from a different climate region.
Common First-Time Buyer Mistakes
Nobody is perfect, and we all make mistakes. Some of the most common ones for first-time buyers are ones that can turn that first car into a less than perfect experience.
- Buying too much car
- Skipping the test drive
- Focusing just on the car payment
- Ignoring insurance costs
- Not researching
- Extending your loan term longer than needed
Every purchase cannot be perfect, but you can do your best to make sure you make the best decision for yourself, or your family. We hope our guide has helped shed a little light on what to do and look for when financing your first car. No matter if its a short commute to Seymour Johnson AFB, or if you’re going to spend a lot of time on the rural roads of Wayne County we want you to have a strong understanding of the process as well as an affordable and reliable car, truck, or SUV.
FAQ
How much should I put down?
There is no perfect amount, but many lenders do like to see 10-20% of the amount financed as a down payment. If that is not something you can do, you can always plan to put down enough to cover your taxes and fees. (This varies depending on your state, and amount you are financing)
Can I buy with no credit?
Yes, though your terms and selection may be limited based on your credit profile.
How long should my loan term be?
This is partly determined by your credit profile and vehicle selection. However, you shouldn’t choose a term that puts you in a bind financially, or take a longer term when its really not needed.
Should I buy new or used first?
This really depends on the terms provided by the lender. Sometimes new vehicles can have factory sponsored rebates that can help a first-time buyer. However, many newer vehicles can carry a higher sales price and a larger depreciation at time of purchase. Used vehicles will depreciate as well, but their biggest depreciation happened when they were purchased for the first time. So it really depends on what fits your budget and needs the best.
Conclusion
We hope our first-time car buyer guide has helped shine a little bit of light on what you can expect buying your first car. The first-time auto loan can be a scary thing no matter if you are a first-time car buyer here in NC or if you have stumbled upon us from elsewhere, but, it doesn’t have to be.
If you are local to Goldsboro NC (or Eastern NC) and are looking for auto financing for your first vehicle, be sure to give us the opportunity to assist you.
