Guide to Buying Your First Ride

Buying Your First Car: What to Know Before You Drive Away

For many young Canadians, purchasing a first car marks an exciting step toward independence and freedom. But while it’s a big milestone, it can also be an expensive and intimidating process. From deciding whether to go for luxury add-ons like heated seats to choosing between a brand-new or pre-owned vehicle, there are plenty of factors to weigh. By doing some research and carefully considering your options, you’ll be better positioned to find a car that suits both your lifestyle and your budget.

Step One: Set (and Stick to) Your Budget

Before you can start shopping, figure out how much you can realistically afford. Creating a budget is the best way to determine what kind of vehicle fits within your means. Review your income and regular expenses to see how much room you have for a car payment. This will help you decide whether your budget stretches to a used car, a mid-range option, or even a sporty upgrade.

Keep in mind that the cost of owning a vehicle extends beyond the sticker price. Ongoing expenses like insurance, fuel, maintenance, licensing, and registration need to be included in your calculations. Before rushing to the dealership, make sure you’re comfortable with the total cost of ownership and not just the purchase price. By keeping your spending within your limits, you’ll secure a car you love without putting your financial health at risk.

New vs. Used: Which Works for You?

Once you’ve established a budget, the next decision is whether to buy new or used. A brand-new vehicle comes with the reassurance of reliability, requiring only standard upkeep. You can also customize features—like heated seats or cruise control—to suit your preferences, and benefit from the manufacturer’s warranty at no extra cost. The downside? New cars lose value the moment you drive off the lot, which can reduce your return if you plan to sell later.

Opting for a used vehicle often means a lower purchase price, allowing you to potentially afford a higher-end model without breaking your budget. However, used cars typically need more maintenance, which could add extra costs over time. The right choice depends on whether you value lower upfront costs or the peace of mind of a brand-new car.

Buy or Lease: Weighing the Options

The next big question is whether to lease or buy. Leasing is similar to a long-term rental—you pay for the use of the car but don’t own it. Monthly lease payments are generally lower than loan payments since you’re covering the car’s depreciation rather than its full cost. If you enjoy driving a newer vehicle every few years, leasing could be a good fit. Just remember that you’re still responsible for upkeep and repairs during the lease term.

Buying, on the other hand, is ideal if you want to keep your car long-term. Financing a purchase means that, once payments are complete, the car is fully yours. If you don’t have the cash upfront, auto loans make buying more accessible. Speaking with your financial institution can give you a clearer understanding of the buying process, help you explore loan pre-approval, and shed light on additional costs.

And here’s a tip: even if you’re preapproved, you don’t have to accept that financing. Use it as leverage when negotiating with a dealership—they may be willing to beat your loan terms to earn your business. Whether you lease or buy, always review the contract carefully and understand all terms before you sign.

Shop Around Before You Commit

As with any major purchase, research pays off. Compare models that fit your budget and lifestyle to see what makes the most sense for you. Don’t jump at the first option on the lot—visit several dealerships to get a sense of fair pricing for the type of vehicle you’re after. Since prices can vary, knowing the average market value gives you an edge in negotiations and ensures you get a fair deal.

Making It Happen

Buying your first car is a one-time milestone, so it’s worth doing it right. With planning, research, and smart financial choices, you can make it a positive experience for both you and your bank account. ABCU can be a valuable partner in the process, offering financial guidance, competitive loan options, and personalized support to help you secure your first set of wheels. Contact us to get started: 1-888-929-7511.