Should I Buy a Car? The Ultimate Test to Decide if You’re Ready

Should I buy a car? That’s a BIG question. And it’s one that you might be asking even before you get your driver's license

A car is one of the most expensive purchases most of us make in our entire lives, coming in just behind a college education and a house. How do you know if you’re ready for that kind of financial commitment? Especially if you’re still a teenager!

Don’t worry; we have a litmus test to help you decide if buying a car is the right move for you. Here’s everything you need to consider if you’re asking "should I buy a car?"

Can I Qualify for an Auto Loan?

Unless you can afford to pay cash for your car, which is getting less and less likely as inflation is growing faster than wages, you’ll need an auto loan.  

Qualifying for a loan can be tricky when you’re young because you haven’t had time to build up a good credit score. Your credit score tells lenders how risky it is to loan you money. If you don’t have any credit (because you’ve never had monthly payments before), you can’t prove that you’re responsible enough to pay back your loan. 

The good news is that lenders will let you get a co-signer: someone with good credit to guarantee that you will make your payments. Maybe your mom, dad, grandma, or grandpa can co-sign your auto loan. Not only will this help you buy a car, but with the loan being partly in your name, you’ll start establishing good credit of your own as you make your payments on time!

How Much Do I Need for the Down Payment on a Car?

Even if you can get a loan, you typically need a down payment. The down payment is a big one-time payment toward the value of the car. The required down payment is usually between 10% and 20% of the car’s value, depending on the lender and your credit. 

You might want to shop around local dealers to see how much of a down payment they require.

Can I Afford the Monthly Payments for the Car?

How much will your monthly car payment be? It depends on factors like:

  • The price of the car

  • Your down payment

  • Your annual percentage rate (APR)

  • How many months your loan term will be

  • Your local sales tax 

You might need to talk to a local dealer to get estimates for some of these figures. And you can plug them into an auto loan calculator to get a monthly payment estimate. 

Do I Have the Money for Additional Expenses?

Unfortunately, the monthly payment isn’t the only expense of owning a car. You also need money to pay for gas, auto insurance, and regular maintenance checks (like oil changes and tire rotations). And you need to pay license fees and car registration fees, which vary by state. 

Can I Handle Emergency Expenses?

One last financial consideration when you’re asking "should I buy a car?": emergencies. 

Unexpected expenses are a fact of ownership. You will have something in your car break down at some point. Or you might get a speeding ticket. Even if a defensive driving course keeps the ticket from negatively affecting your driving record, you will still have to pay the ticket fines. Or (heaven forbid), you could end up having to pay out-of-pocket costs for a car accident at some point.  

No one wants any of these expenses, but we all get them sooner or later. So make sure you’re prepared. Do your best to build up a savings account to act as your emergency fund so you’re ready when these expenses pop up. 

Only you can decide if you’re ready to buy a car. But we hope our guide helps you with your big decision. 

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