Now that you’ve finally bought your first car, what do you do with it? Actually, you’ve got to take a few steps. Here’s exactly what you need to do:
Insure The Vehicle
Actually, if this is the very first car you’re going to own, you need insurance before you buy a car. A dealer won’t let you drive away without auto insurance, so you’re not allowed to drive a privately owned vehicle with no insurance, either.
Running a vehicle with no liability insurance is illegal in most countries. And if your car is financed, the lender will usually require full insurance coverage to cover their investment in the event of a total loss.
If you have an auto insurance policy you can move or apply insurance to your vehicle. Even if you don’t have auto insurance right now, you would want to look around before you buy it. You will buy a contract that begins on the day you buy the car.
What’s With The Distance Insurance?
Many times, dealers will try to sell you unnecessary insurance. It is particularly true if you don’t put down a big down payment when you purchase your vehicle.
Remember earlier that we were thinking about depreciation? As soon as you get your car off the lot, it’ll be worth less than it is now. So if you make a small or no down payment, you may be upside down automatically. If you wreck your car while it’s still upside down, your regular car insurance will pay for what the car was worth at the time of the accident. This could even be less than the total amount due on your auto loan!
Gap insurance is a form of insurance that would cover the “distance” or difference in the value of the auto and the remaining balance left on the loan if you paid. A small down payment or gap insurance could make sense as anything that happens within the first few months of the vehicle would be covered.
Gap insurance also makes sense if you have a 3 to 5 year loan. The longer your term, the slower you’re going to pay down the principal of the loan. That means you might be upside down for a longer time. (Of course, if you plan to fund your vehicle for more than three or four years, you will first challenge the initial buying price!)
Also, dealers can sell a void insurance scheme when you close your car. But you can also purchase gap insurance independently, either through your regular auto insurance company or as an additional policy.
Sign Your Car
You’ve probably seen the dealer’s lots of cars driving around with paper license plates. They’ve always got a famous date on them. This is the last day on which the dealer-issued registration is valid. Upon this point, the vehicle driver will have his own license with the state to legally drive the car.
When you’re shopping around for a car, check out the DMV or BMV website for your likely registration costs. Some cars are worth a few hundred dollars! If you need to, reduce your down payment so that you have enough money left over for this additional cost.
Also, check with your DMV to see what you need to bring in to register your car. You will often need to have a current driver’s license, proof of address, and possibly an additional form of identification.
You will leave it in the car until you get the paperwork. And be sure you’re going to have to pay for the annual registration and license renewal bill! After you purchase the vehicle, the average expense would be much lower, much of the time. You figure out as you sign how big they’re going to cost, and add them to the budget as a one-off expense.
Take Good Control Of The Engine
The best way to make sure you get the most of the miles out of your first car is to take good care of it. Consult the owner’s manual of the vehicle (you may find this online if your used vehicle is missing) and figure out whether you can expect to do routine repairs on the car.
Then find a mechanic that you like to work with for your repairs. It’s a good idea to work with a local mechanic who knows your car and its history. And when you find someone you trust, you can lean on them for advice on when to perform major regular maintenance, such as replacing timing belts and other things that will help your car last as long as possible.
Again, once you buy your car, you should be budgeting for maintenance costs every month. Even if you’re buying new ones, the cost of tires, oil changes, brake pad changes, and other regular items can add up really quickly!