The car shopping experience should be exciting, especially for a first-time car buyer. However, with the average price of new and used cars rising exponentially, financial concerns can quickly drain all the fun out of the purchase. Choosing the right vehicle (and one that fits the budget) can be a challenge for a young car shopper. Another roadblock is getting approved for an auto loan with minimal credit built up. Even though it seems overwhelming, first-time car buyers can ensure success by researching financing options and taking advantage of automaker discounts and special financing programs.
Tips for First-Time Car Shoppers
Having no credit can be as much of a challenge as a bad credit score for a young car buyer. First-time car shoppers may not have built up enough credit to qualify for auto loan approval, and even if they are approved, interest rates will likely be much higher than average. This doesn't mean this group is destined to take the bus or Ubers forever. A cosigner such as a parent can help a first-time car shopper get approved for auto financing. It's also smart to shop around between lenders and get pre-approved before heading to the dealership to buy a car. The following automakers offer assistance with financing and/or college grad discounts to make the new car purchase as smooth as possible.
Toyota's First-Time Buyer Program
Vehicles like the Toyota Corolla and the Toyota C-HR are excellent options for first-time car shoppers thanks to their affordable price tags and reliability. Toyota helps car buyers with limited credit purchase these vehicles with the Financing for Limited Credit Program. This program eliminates the need for a cosigner for qualified applicants. To qualify, you must have a credit score of 610 or higher and no overdue accounts, collections, repossessions, or foreclosures on your credit report. You must also submit three personal references, proof of a full-time job for at least six months, and a down payment of at least 10% of MSRP or selling price.
In addition to the Limited Credit Program, Toyota also helps recent college grads purchase a vehicle by offering special rebates, competitive interest rates, and lease terms. Car buyers who graduated in the last two years or who will graduate in the next six months are able to take advantage of a $500 rebate when they finance or lease through Toyota's Financial Services. College grads who lease a Toyota will also get a waived security deposit.
Ford's First-Time Buyer Program
The Ford EcoSport makes an excellent first car thanks to an MSRP under $20,000 and impressive MPG numbers. Ford's Flex Buy program can make the purchase of an Ecosport or any other Ford vehicle a reality for first-time car buyers on a tight budget. Available for buyers who finance through Ford Credit, this program provides a special payment structure that gives lower payments for the first three years of the loan. Flex Buy financing offers terms of either 66 months or 75 months and discounts the first 36 months of payment by 15% or 18%. Later payments are adjusted to make up the difference.
Ford understands that college students and recent grads are pinching pennies. The Ford Drives U offer gives current college or trade school students, alumni, or incoming college freshmen $500 Bonus Cash toward the purchase or lease of a new Ford or Lincoln. Alumni who have graduated within three years are also eligible to receive $250 Bonus Cash toward the purchase of a Ford Certified Pre-Owned Vehicle when financing with Ford Credit.
Honda's First-Time Buyer Program
College grads have a lot on their plates as they juggle starting new jobs and paying off student loans. An affordable vehicle like the Honda Civic or the HR-V can provide reliable transportation and make adjusting to adult life a little easier. Honda wants to make purchasing a vehicle as stress-free as possible for these young shoppers through its College Grad Program. Honda Financial Services offers $500 in savings on the purchase of a new vehicle, as well as the option to defer the first payment for 90 days, flexible finance and lease plans, and a good way to build credit.
GM's First-Time Buyer Program
First-time car buyers are ready to carve their own path in life. The new Chevy Trailblazer is an affordable small SUV that can assist young car buyers in chasing their big dreams. To help make a new vehicle a reality for college students and recent grads, GM offers college discounts on many eligible Chevy, Buick, and GMC vehicles including the Chevy Trailblazer. Additionally, college students, grad students, and recent grads who qualify can defer payments for the first 90 days when they use the GM College Discount program to finance a vehicle through GM.
Hyundai's First-Time Buyer Program
Hyundai offers an ideal balance of affordable and fun to drive vehicles that first-time car buyers will be excited to own. Options like the Hyundai Kona, Venue, or Accent satisfy the needs of young drivers and Hyundai is happy to lend a hand to this ambitious group. Thanks to Hyundai's College Grad Program, current college students or college grads who got a diploma in the last two years (or will graduate in the next six months) and can offer proof of employment will enjoy $400 bonus cash towards the purchase or lease of a new Hyundai. While it may not seem like much in the grand scheme of a car purchase, $400 in savings can be put towards necessary evils like rent or groceries.