IDIOTS GUIDE TO BUYING YOUR FIRST CAR

Deciding to buy new or used is the first step towards buying your next car. Your budget is likely to play a big part in your decision, but it’s worth remembering that both methods have their merits. Buying new means you’ll benefit from the peace of mind of a manufacturer’s warranty, which should last for at least three years. You’ll also get to specify your car exactly to your tastes and needs, but remember that you’re almost always likely to lose more money in the long run than if you bought used, due to depreciation.

Used cars, meanwhile, have their own benefits. A used car will almost always be cheaper than its new equivalent and its first owner is likely to have taken the initial hit of depreciation so you don’t have to.

The following simple financial evaluation could assist you select a repayment plane on a bank loan

• The 20/4/10 rule: Put down 20% on a car, finance the car for no more than 4 years, and keep your car payment less than or equal to 10% of your salary would be wise choice to consider.

• The 36% Rule: With this rule, your total loan payments shouldn't take up more than 36% of your salary. This includes your mortgage, car loan, personal loans, student loans, and minimum credit card payments.