Do these 3 things before closing this tab:
1Fix the driver behind crashes, sound loss and screen glitches2Repair Windows errors before they cause bigger problems3Scan for outdated or missing drivers - takes under a minuteSome links on this page are affiliate links: if you buy through them we may earn a commission, at no extra cost to you.
‘
When you finally reach the age where you can afford to buy your own car, you’re excited. You’ve probably been saving for a while to come up with the down payment on your car. Maybe your parents are loaning you some money for a down payment. The thing is, once you drive that car off the lot, you’re going to have to pay a car payment. And, most car payments last for at least 3-4 years. It’s important that you know you can afford the monthly payment.
You also have to worry about things like gas, insurance, and maintenance. Here, we’ll talk about how much you should spend on your first car. We’ll also talk a bit about whether you should put a ton of money down or whether it makes more sense to keep that cash in the bank.
As an Amazon Associate I earn from qualifying purchases.
Do You Want a Used or New Car?
A year ago, it made a lot of sense for first-time car buyers to get a used car. They were a lot cheaper than a new car. And, a lot of people could either pay cash for the vehicle or get a small monthly payment. That has changed a bit.
Today, even used cars are rather expensive. This is because a lot of people trade in their cars after just a few years. So, not only are the cars still relatively new, but the dealerships and banks need to make money on these cars. By the time you look at what you’ll be paying by the end of your car loan, it might make more sense to just spring for a new car.
Popular on Amazon
- CEL Doctor: The ANCEL AD310 is one of the best-selling OBD II scanners on the market and is recommended by Scotty Kilmer, a YouTuber and auto mechanic. It can easily determine the cause of the check engine light coming on. After repairing the vehicle's problems, it can quickly read and clear diagnostic trouble codes of emission system, read live data & hard memory data, view freeze frame, I/M monitor readiness and collect vehicle information
- Sturdy and Compact: Equipped with a 2.5 foot cable made of very thick, flexible insulation. It is important to have a sturdy scanner as it can easily fall to the ground when working in a car. The AD310 OBD2 scanner is a well-constructed mechanic tool with a sleek design. It weighs 12 ounces and measures 8.9 x 6.9 x 1.4 inches. Thanks to its compact design and light weight, transporting the device is not a problem. The buttons are clearly labelled and the screen is large and displays results clearly
- Accurate Fast and Easy to Use: The AD310 scanner can help you or your mechanic understand if your car is in good condition, provides exceptionally accurate and fast results, reads and clears engine trouble emission codes in seconds after you fixed the problem. This device will let you know immediately and fix the problem right away without any car knowledge. No need for batteries or a charger, get power directly from the OBDII Data Link Connector in your vehicle
- OBDII Protocols and Car Compatibility: Many cheap scan tools do not really support all OBD2 protocols. AD310 scanner as it can support all OBDII protocols such as KWP2000, J1850 VPW, ISO9141, J1850 PWM and CAN. This device also has extensive vehicle compatibility with 1996 US-based, 2000 EU-based and Asian cars, light trucks, SUVs, as well as newer OBD2 and CAN vehicles both domestic and foreign. Pls confirm with our customer service whether it is compatible with your vehicle before purchasing
- Home Necessity and Worthy to Own: This is an excellent code reader to travel or home with as it weighs less and it is compact in design. You can easily slide it in your backpack as you head to the garage, or put it on the dashboard, this will be a great fit for you. The AD310 is not only portable, but also accurate and fast in performance. Moreover, it covers various car brands and is suitable for people who just need a code reader to check their car
But that isn’t an option for everyone. Not everyone has the kind of money to buy car cash. And maybe a new car just isn’t in the cards for you. You know your finances. And, you should have an idea of what your finances will be for the next few years. These are the things that will determine whether you buy a new or used car.
What Does Your Financial Picture Look Like?
Before you decide how much to spend on your first car, you need to look at your finances. There are several things you need to think about, including:
Free tools Windows power users keep installed
One-click scans. No signup required.
- How much do you make? Look at how much you clear every week or two weeks. Does a good portion of your pay come in the form of tips or commissions? If this is the case, it’s not guaranteed income. Look at what you’ve made on average for the last 6-12 months.
- Do you live on your own or with your parents? If you’re living at home, you have more money to spend on your monthly car payment. However, you may not be living at home forever. Odds are, in the next few years, you may want to move out on your own. If this is the case, you don’t want a really big car payment holding you back. This is something to keep in mind when you decide on what kind of car to buy and how much to spend.
- What are your other expenses? If you’re paying things like rent and student loans, you won’t have all that much to spend on a car payment. This is something to keep in mind when car shopping.
Is There a Certain Percentage of Income You Should Spend on Your First Car?
When you’re trying to figure out how much to spend on your new car, there are some rules you can follow. If you’re super cautious, you may want to stick to no more than 10% of your income. So, if you make $40,000 per year, you don’t want to spend more than about $4,000 on a car. This means you won’t be able to get a new car.
Also popular on Amazon
- 【Find Out Why Your Check Engine Light Is On】 The FOXWELL NT301 OBD2 scanner diagnostic tool helps you read engine trouble codes (DTCs), view code definitions, and understand what may be causing your check engine light. Simply connect this car scanner to your vehicle's 16-pin OBD2 port to start diagnosing. Whether you're a first-time car owner or a DIY mechanic, this OBD2 scanner helps you identify potential issues before deciding on your next repair step
- 【Read & Clear & Check Engine Codes with Confidence】 After completing a repair, use this car code reader to clear eligible engine trouble codes and turn off the check engine light. If the underlying problem remains, the light may return. Permanent DTCs cannot be erased directly and clear only after the vehicle completes the required checks. This code reader for cars and trucks helps you check repair results without making an unnecessary trip to the shop
- 【Check Your Vehicle's Readiness Status at a Glance】 Get a clearer picture of your vehicle's readiness status with the NT301's one-click I/M Readiness hotkey. Red, yellow, and green LED indicators, along with audible alerts, make it easy to check monitor status before a scheduled vehicle inspection. Readiness results help you understand your vehicle's status
- 【See What's Happening with Live Data】 Go beyond basic fault codes with this car scanner diagnostic tool featuring real-time engine data and graphing. Monitor supported parameters such as engine RPM, coolant temperature, fuel trims, and ox-ygen sensor readings to help investigate performance issues. The NT301 also provides supported OBD2 functions such as O-2 sensor and EVAP-related tests, with availability depending on your vehicle
- 【Broad OBD2 Compatibility for Everyday Diagnostics】 The FOXWELL NT301 vehicle code reader supports standard OBD2 protocols, including CAN, ISO9141, KWP2000, and J1850. This auto scanner works with most OBD2-compliant 1996 and newer US-market cars, SUVs, and light trucks, including supported gasoline and diesel vehicles. Coverage and available functions vary by vehicle. Please confirm compatibility before purchase
However, you could get a decent used car. If you have the cash, then you can shop privately. This opens up the idea of negotiating. So, if you find a car you really like that’s $5,000 you may be able to talk the owner into selling it for less. This isn’t really possible when financing a car through a car dealership.
If you are a bit more comfortable with your money, you can probably afford to spend about 20% of your annual income on your first car. If this is the first time you’re buying a car, you are probably young. That means your income may not be as high as other people shopping for cars. And, there’s nothing wrong with that. You’ll have your whole life to buy second and third cars. You only get one chance to buy your first car
. So, if you make about $30,000 per year, you wouldn’t want to spend more than about $6,000 for your first car. This would buy a decent used car. Or, you could put a couple of thousand down and then make monthly payments.
Also popular on Amazon
- 【A MUST-HAVE SCANNER TOOL FOR DIYERS】 - VDIAGTOOL VD10 car code reader is an incredibly useful, handheld obd2 scanner for each car owner or hobbyist, even for those with little to no experience when it comes to vehicle mechanics! Similar to a fixd car diagnostic tool, using this car diagnostic scanner is extremely easy. All you have to do is attach it to your car OBDII port and you can diagnose car problems in seconds! Read Codes (DTCs); Clear Codes; Live Data; View Freeze Frame; I/M Readiness; Vehicle Information.
- 【KEEP ENGINE IN GOOD STATUS】 - VDIAGTOOL check engine code reader brings a fast access to scan, read the car fault code, show its definition on the screen instantly, troubleshooting to find the root causes of problems, erase the engine fault code and turn off the MIL (Malfunction Indicator Light). Similar to a fixd car diagnostic tool, this car code reader helps ensure your engine stays in top condition.
- 【READ/CLEAR CODES & DTC LOOKUP】- No search online & saving your time, this vehicle car code reader retrieves generic (P0, P2, P3, and U0), manufacturer specific (P1, P3, and U1) codes, pending codes and displays DTC definitions based on the built-in database(more than 3000 codes) on the TFT screen, find out the root causes and clear the codes after fixed.
- 【ENHANCED OBD2 SCANNER WITH LIVE DATA & RETRIEVE FREEZE FRAME】 - This diagnostic scan tool for accurate diagnosis enables you to retrieve data from vehicle sensors, such as Engine RPM, Intake air temperature, Short/Long term fuel, Misfire data and etc. The freeze frame is stored in the PCM together with the diagnostic trouble code (DTC) related to the fault. Comparable to a fixd car diagnostic tool, the VD10 car code reader car scanner can be a valuable & practical diagnostic aid and also greatly help when diagnosing intermittent problems.
- 【I/M READINESS for THE S-nn-0-g CHECK】- OBDII vehicle may not pass the annual inspection unless the required monitors since reset are complete. So you should at least read the readiness monitors and make sure they are ready. This car obd2 scanner diagnostic tool is equipped with I/M readiness function to check the operations of the e-m-issi0n system on OBD2 compliant vehicles, run I/M monitor readiness test, checking if the pass vehicle s-m-0-g inspection.
If you really want to splurge, you could spend about 35% of your annual income on a car. However, this is not smart. Anything could happen in the next few years that could affect your ability to make your monthly car payment. If you miss just 1-2 payments, the bank can repossess your car. You don’t want that to happen. Not only will you lose your car, but you can also ruin your credit.
How Much Should You Put Down on Your Loan?
If you decide to finance a new or used car with a car dealership, you’ll need to get a loan. Even people with great credit have to put something down. So, if you have a couple of thousand to put down on your first car, great. The finance officer at the dealership will do what they can to get you into a car. They’ll work the numbers and, based on your credit, will let you know how much you qualify for.
There is one thing you need to be careful of. The finance officer may try to push you into a car that you can’t afford. Just because you qualify for a certain amount of money does not mean you need to spend that much. Don’t let the finance officer bully you. If you feel too pressured, have your parents go to the dealership with you. The salespeople are less likely to take advantage of you if you have another adult with you.
Also popular on Amazon
- 【Comprehensive Performance Testing】V011 OBD2 Scanner provides a complete diagnostic solution, giving you a thorough understanding of your vehicle's condition. It supports a variety of performance tests, support 9 protocols,👍automotive fault clearing，including fast reading of DTCs, access to electronic emission readiness, turning off CEL or MIL, resetting monitors, reading live data and retrieving the vehicle's VIN, freeze frame, sensor data, data streaming, diagnostic reports, onboard monitoring, live data streaming, and more. With these features, you can monitor your car's performance in real time and discover potential problems before they become major issues.
- 【Convenience and Savings for All Users】Designed with user-friendliness in mind, the V011 OBD2 Scanner is perfect for both novices and seasoned car enthusiasts. The intuitive app helps you interpret the check engine light, and suggests possible fixes. This can help you avoid unnecessary trips to the repair shop and prevent you from being overcharged for repairs. The product also includes helpful how-to guides and video tutorials, empowering you to clear the check engine light yourself and save significantly on repair bills.The fault code can only be cleared after the car is repaired. ⚠️ Notice：lf the car is not repaired,the fault code can only be cleared by the computer in the 4s shop.
- 【Intuitive Data Visualization】Understanding car diagnostics has never been easier. The V011 OBD2 Scanner displays detected data in clear, easy-to-read charts. Whether it's engine coolant temperature, engine speed, vehicle speed, or control module voltage, the visual representation helps you quickly grasp your car’s status. Even beginners can compare these readings against normal values to determine if their car needs any repairs.
- 【Broad Compatibility】The newly upgraded V011 OBD2 Scanner supports over 96% of car makes and models, making it one of the most versatile diagnostic tools on the market. It is compatible with a wide range of brands including Toyota, Honda, Chevrolet, Ford, Mercedes-Benz, Jeep, BMW, Porsche, Subaru, Nissan, Cadillac, Volkswagen, and Lexus, covering vehicles from 1996 to the present. This ensures that almost any vehicle owner can benefit from its extensive features. The device also supports multiple languages, including English, German, Spanish, Finnish, French, Italian, Dutch, Portuguese, and Chinese, ensuring accessibility for a global audience.
- 【Advanced Bluetooth 5.4 Connectivity】Say goodbye to the hassle of traditional wired connections. The V011 OBD2 Scanner features an upgraded Bluetooth 5.4 system, providing faster and more reliable connections. This seamless connectivity ensures you can start diagnosing your vehicle without any delays.Tips: 1. The car must be started (power on and ignition), 2. The mobile phone Bluetooth is turned on. Note that Apple phones only need to turn on Bluetooth, do not connect Bluetooth in the phone settings to turn on OBD Home, the APP will automatically connect (this product is only suitable for OBD home)
Depending on what kind of car you buy, you should expect to put down about 10% of the purchase price. So, if you’re buying a $20,000 car, make sure you have about $2,000 to put down. Sometimes, dealerships run special promotions where you don’t need to put any money down. Be careful with these specials. They usually end up charging you such a high-interest rate that it costs you much more in the long run.
The Tool Desk
Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →How Long Should Your Loan Be?
Most auto loans are for about 4 years. The problem is, for first-time car buyers, the finance people try to push you into a loan that is 5-6 years. When you do the math, these loans just don’t make sense. If this is your first car, you probably haven’t been alive long enough to screw up your credit. If you have a decent credit score, there’s no reason why you shouldn’t be able to get a loan for 4-5 years.
Finance companies love to stretch loans out for as long as they can. This means more interest for them. That means more money out of your pocket. Don’t let them pressure you. If they want to put you into a car, they’ll find a loan that works for you. If you get a car loan for 4-5 years, you can always trade it in for a new car in a few years. But, if you have a 6-year loan, you won’t have much equity after 2-3 years. This means you might not get any real credit on a trade-in.
Also popular on Amazon
- Multi-Functions - Practical Multi-Functions OBD2 code reader features built-in OBD2 DTC lookup library, which help you to determine the cause of the engine light, read code, erase code, view freeze frame, I/M ready, vehicle information, data flow, real-time curve, get vehicle speed information, calculate load value, engine coolant temperature, get engine speed.
- Wide Capability - Supports 9 protocols compatible with most 1996 US-Based, 2000 EU-Based and Asian cars, and newer OBD II & CAN domestic or import vehicles. Supports 6 languages - English,German, Dutch, Spanish, French, Italian.
- 2.8" LCD Display - Designed with a clear display 2.8" Large LCD screen - white backlight and contrast adjustment. No need any battery or charger, OBD reader gets the power directly from your vehicle through the OBDII Data Link Connector.
- Compact Design - Car diagnostic scanner is equipped with a 2.5 feet long cable and made of a very thick flexible insulator.There are 6 buttons on OBD2 Scanner:scroll up/down,enter/exit and buttons that quick query VIN vehicle number& the DTC fault code.
- ABS / Airbag codes NOT Supported - It is able to read and clear check engine information which is part of OBDII system, but it cannot work with non-OBDII systems, including ABS / Airbag / Oil Service Light, etc.
Remember – You Have to Include Gas, Insurance, and Maintenance
Buying your first car is more than just a car payment. You need to think about how much you’re going to spend on things like gas and tolls. Depending on how much and how far you drive, this could be at least $100-200 per month. You also need to pay car insurance. If you’re financing a car, you need to carry full coverage.
For newer drivers, insurance is very expensive. You might have to spend at least another $300 per month on auto insurance. This may be as high as your car payment. Check to see if it would be cheaper to jump on to your parents’ insurance. It could make it an awful lot cheaper than having it on your own. You also need to consider how much you’ll spend on maintenance. Things like oil changes, repairs and the like can cost a few hundred dollars a year.
