Buying a car for the first time is an important milestone, but budgeting for it can be overwhelming. Between deciding what’s affordable and comparing insurance and financing options, there’s a lot to consider. Use these budget-friendly car shopping tips to simplify the process and keep your finances intact.

Decide What You Can Afford

Before hitting online classifieds or nevada car dealerships, understand what you can spend without adversely affecting your finances. A good rule is to not spend more than 15% of your net income on a car payment—but the spending doesn’t stop there. When shopping for a new car, don’t forget about registration, insurance, fuel, and maintenance expenses. If you’re saving for something else or managing other debts, consider lowering the percentage to give yourself additional financial flexibility.

Save Up to Put Money Down

The bigger the down payment, the less you’ll have to borrow from a bank or credit union. Saving at least 20% of the vehicle’s purchase price will lower your monthly payment and reduce the interest paid over the loan term. For example, if you’re considering a car priced at $20,000:

· A 20% down payment would be $4000.

· You’d borrow $16,000 to finalize the purchase.

By putting more money down, you’ll save each month and qualify for more favorable financing .

Consider the Total Cost of Ownership

While most shoppers focus on the sticker price, that’s not always the best strategy. When buying a car for the first time, budget for:

· Insurance costs, which may vary depending on your driving record and car model.

· Fuel expenses. Are you buying a hybrid or EV (electric vehicle)? If so, you’ll save.

· Repairs and maintenance (tires, oil changes, and emergency fixes).

· Tax, title, and registration fees.

These costs may add hundreds to your yearly bill, but they’re necessary. Use an online calculator to estimate costs for the models you’re thinking of buying.

Shop for Great Financing Rates

If you’re like most people, financing is the only way to afford a new car—and shopping around for great rates is crucial. 60-month loans are common, as are 72-month ; certain lenders offer 84- and 96-month auto loans at higher rates. These loans may continue long after the manufacturer’s warranty expires. Short-term loans are a safer and more sensible approach.

Don’t accept the dealership’s first offer; instead, compare options from credit unions, online lenders, and banks. Lower interest rates will save you thousands over the loan term, and even a small difference can have a big impact.

Get Preapproved for an Auto Loan

Getting preapproved for a loan lets you know how much money you can borrow, the interest rate you’ll pay, and how much negotiating power you’ll have at the dealership. With preapproved financing, you’ll avoid costly surprises and stay away from options that aren’t in your best interest.

Consider Buying a Used Car

We’ve all heard that new cars lose much of their value the minute they’re driven off the lot—up to 30% within the first year! Buying a reliable pre-owned car that’s just a year or two old can save you thousands of dollars.

O or certified pre-owned cars are a good option as they include manufacturer warranties and have been thoroughly inspected. Not only will you save when purchasing, but you’ll also pay less for registration and insurance.

Do Your Homework

A little knowledge is a powerful thing when buying a car, especially for first-timers. Research brands and models that fit your budget and lifestyle, then look up reliability ratings, consumer reviews, and resale values. Edmunds, Kelley Blue Book, and other tools will help you determine market prices for models you’re considering. If you’re buying used, ask for a vehicle history report and check it for title issues, previous accidents, and maintenance records.

Negotiate Professionally

Whether buying used or new, don’t accept the dealer’s price before bargaining. Dealers have some leeway, especially if you’ve done the research and know the vehicle’s value. If a deal seems too good to be true, it probably is—and it’s okay to walk away.

Expect the Unexpected

Even with reliable cars, unexpected costs like battery replacements and flat tires can arise. Creating an for transportation expenses will prevent financial stress in the future, and it will make paying these costs a little easier.

How to Avoid Mistakes When Shopping for a Car

While buying a car is a straightforward process, first-timers can (and do) make mistakes. Follow these tips to avoid purchase pitfalls.

· Set a budget and stick to it. Don’t be tempted by pricey features and extras.

· Compare insurance costs. Coverage costs vary, and it’s best to compare quotes from several providers.

· Think about the future. Before buying a car, think about lifestyle choices that may affect your decision, like family plans and career changes.

By following these easy tips, you can avoid potential errors and come out ahead.

Bonus Tip: Maximize Your Test Drive

Now that you’ve done your research and found a dealer, it’s time to get behind the wheel. Dealers work closely with serious shoppers, offering full access to vehicles for inspections and test drives. If you want to get a feel for your options, tell the salesperson you’re gathering information and haven’t decided yet. Good salespeople know cars inside and out, and they’ll give you the information and guidance you need.

Buying a Car Should Be Simple

Once you’ve learned about your options, secured financing, and researched the costs of car ownership, it’s time to sign on the dotted line. Re-reading the contract and asking questions is a good idea, as is negotiating for additional discounts and promotions.

Buying a car for the first time is an exciting experience, but it doesn’t have to be difficult. By planning, saving for a down payment, doing your homework, and following the other tips on this list, you will put yourself in a position to find a vehicle that fits your budget and meets your needs. Happy shopping and be safe out there!