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Bottom Line Up Front

  • When you're buying your first car, you've got the advantage of time—use it to research the right car for your needs before you start shopping.
  • Remember that a car costs more than its listed price. There are fees, insurance, gas, maintenance and repairs to consider. 
  • Fine print matters! Make sure you read everything you sign thoroughly. 

Time to Read

5 minutes

July, 22, 2022

The thought of buying your first car on your own is exciting. With modern tools and the right strategy to back you up, you can get behind the wheel of your own car without much trouble. Here’s what you need to know as you approach the buying process.

Budgeting and Saving

Whether you plan to lease or take out a loan for your car, you’ll need to create a budget to understand what you can afford for monthly payments. To get an idea of your budget, it’s recommended that you spend no more than 10% of your monthly income on your monthly car payment. 

With that number in mind, use our Car Affordability Calculator to figure out the vehicle price you might be able to afford. It helps to know your timeframe for purchasing and how much of a down payment you can afford to put forward, especially considering how that will shape your monthly payments. Work toward that number by setting aside funds in a savings account. 

You should also be mindful that your budget should also consider costs for vehicle registration fees, insurance, gas, maintenance and repairs. While you can avoid monthly payments altogether by paying cash up-front for the entire cost of the car, that’s often not possible for many first-time car buyers.

Finding the Perfect Match

Now that you have a budget, it’s time to start researching cars. If you want a car that will meet your needs today and in the future, you’ll want to do more than choose a car based on how it looks. Think about why you need a car. Do you need to drive to school…and fit in tight parking spots? Will you be moving away from home…and need cargo space for all your stuff? Do you plan to carpool…and need seating space for your crew? Factors like these influence the type of car you should look for.

To learn more about the features and safety ratings of cars, try using sources like Navy Federal Credit Union’s Car Buying Service, powered by TrueCar.1

New vs. Used vs. Lease

Sometimes a new car is the most expensive option, but that spending comes with savings in other areas. For example, you can expect to have low maintenance costs for the first few years and spend less on gas. If you qualify, you may be able to take advantage of better rates on loans, too. 

At the same time, buying a used car has many advantages. It can cost much less to get comparable features when buying used over new. Plus, insurance rates are typically lower.

If you’re thinking about leasing, it can be a great alternative to buying that lets you access the perks of owning a new car while making smaller monthly payments. One problem with leasing cars is that you’ll cumulatively pay more to keep leasing cars compared to buying a car and eventually paying off your loan. 

Test Driving

Just like it’s better to try on clothes before you buy, it’s a good idea to drive a car before you sign on the dotted line. Some dealers even offer the ability to get a vehicle driven to your home for more convenient and safe test-driving. 

Try to test-drive several models so you can better compare the handling and experience of each vehicle. If you’re test-driving a used car, be sure to ask the seller details such as when the last maintenance was performed and if anything is broken. For answers to questions regarding past accidents, title history and mileage, request a CARFAX® Vehicle History Report™2. And, don’t be afraid to look under the hood or even below the car to check for leaks, rust and other issues.


Unless a seller tells you that a price is final, you can expect to negotiate on the price of your vehicle purchase. For the best results, try following these negotiating tips:

  • Get preapproved. Before starting negotiations, see if you qualify for preapproval for an auto loan from a trusted lender. With a preapproval in hand, you’ll have proof of financing that’s as good as cash. It will also put a cap on your budget and give you the advantage during a negotiation. 
    If you don’t have strong credit history, you may need a co-signer to qualify for the loan. A co-signer is essentially somebody who vouches for you and is usually a parent who’s employed and has a healthy credit history. Note that if you fail to pay back your loan, your co-signer will be on the hook for your payments.
  • Come prepared. Know the market value of the vehicle you’re buying so you don’t overpay. You can also use the pricing of competing dealers and models to help bring down the price of the car you want. Use online resources to aid you in conducting pricing research. 
  • Know the features you want. Consider your needs up-front and don’t get talked into anything that compromises your budget.
  • Be vocal about any issues you have. If a car seemed to have issues or failed to live up to your standards, let the seller know. They may be willing to discount the price or throw in a bonus to keep you interested.
  • Don’t give away the maximum price you’ll pay. Otherwise, it’s possible that will be the minimum price offered.
  • Walk away if you’re getting a bad deal. There are many vehicles and dealers out there—find one you trust and feel comfortable buying with.

Closing the Deal

At this point, be sure to thoroughly read over everything you’re asked to sign. Ask questions about anything you don’t understand or that seem different from what you agreed upon. 

If everything checks out, then it’s time to get your keys and enjoy your new ride!

Car-Buying Made Easy

Find more information on the car-buying process from Navy Federal Credit Union. 


Next Steps Next Steps

  1. Before you get started shopping, get preapproved for an auto loan3 so that you know which cars fit your budget. (Remember, being preapproved for a loan amount isn’t the same as being able to afford those monthly payments along with the rest of your bills. Double check your budget!)
  2. Know which features are absolute must-haves, which are negotiable and which you don’t need at all so that you’re prepared when you start shopping. 



TrueCar operates the Navy Federal Car Buying Service. Navy Federal is not responsible for any offer, purchase, lease, or service provided by or through the Navy Federal Car Buying Service.


CARFAX Vehicle History products and services are based only on information supplied to CARFAX. CARFAX does not have the complete history of every vehicle. Use the CARFAX search as one important tool, along with a vehicle inspection and test drive, to make a better decision about your next used car.


Credit and collateral subject to approval.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.