Buying a car for the first time, or even the second or third time, can be a perplexing and stressful experience. There’s so much to know and understand.

What is the best first car? Which car is cheapest? Which is safest? What should I pay? How much can I afford? Where can I find cheap cars? How do I get a car loan? Can I qualify? What if I have no credit, or bad credit? What is the car buying process? How will I know if I’m being cheated? How about car scams?

What about auto insurance? Which company has the best rates? Should I buy a new car, or used? Buy from dealer or individual seller? Can I sell/trade my car if I still owe money? How about leasing?

These are all common questions asked by first car buyers — or any car buyer.

We understand the questions and we have the answers.  

This web site is designed especially for first-time or inexperienced car buyers, particularly teens buying a first car. In fact we spend a lot of space on this site helping teenagers find and buy the best car for them. But you don’t have to be a teenager to learn from this site.

We give you the all the answers you need, the expert advice, and the specific knowledge you need so that you can go into your car buying experience with confidence that you’ll make the right decisions, get the best deals, and not get cheated.

Welcome to FirstCarGuide.com.

The simple answer is: Yes, 0% APR car loans are good deals. When you pay no finance charges (interest) on a loan, you save a significant amount of money over the term of your loan — and you reduce the amount of your monthly car payment.

How much do you save with a zero percent loan?

Here’s an example:

Let’s say you buy a new car for $24,000 and you want a 60 month loan. If you were to get an auto loan at a conventional interest rate of 6.5%, your payments would be $470 a month and your total finance charges would be $4175.

If you bought the same car with a 0% APR loan, you would save the $4175 in finance charges and your monthly payments would only be $400 a month, a savings of $70 a month.

Getting a 0% APR loan sounds like a good deal — and it is — but what if the car dealer/manufacturer is also offering a rebate, which is typically offered as an alternative to the 0% loan. You must select one or the other, but not both. Which is better?

How do I buy a car from an individual private seller — not a dealer?

When you buy a car from an individual, you pay with cash, a money order, or a bank cashiers check. The money can come from savings, a checking account, a family loan, or a loan from a bank or financial company. Most sellers do not like personal checks.

Buyers sometimes expect a private seller to “take payments” but any smart seller will not agree to such a plan. It is too risky. As a buyer, it’s better to get your own loan.

Requirements for a car loan

Loans from banks or finance companies require that you have a not-so-bad credit score, have an income sufficient to repay the loan, and have no excessive debts that might interfer with your ability to repay the loan. Loan companies do not want to give money to people who are unable to repay a loan.

Buying a car with bad credit – or no credit

We see this question being asked frequently: “What is the best car to buy?”

Of course, the real answer as to what is the best car can vary, depending on your own personal needs, preferences, and finances. Some people place a great deal of importance on reliability. Others might think safety or cost is more important. And others might feel that the best car should have great looks and high performance. 

Many people believe that to get the best car, you must spend a lot of money — that the best cars are the most expensive one. Strangely, this is just not true. Actually, some of the best cars are the least expensive — and some of the most expensive cars are the least reliable and the least efficient.

One of the best automobiles, overall, is the Honda Civic. Why? Because it has the most perfect combination of all the factors that most car buyers look for — cost, fuel efficiency, reliability, cost of operation, cost of insurance, style, performance, resale value, riding comfort, luxury features, and handling.

Now, we know that the Honda Civic is not the best car for everyone. Some people need more interior room (try the Honda Accord sedan), or more performance, or more luxury, or more cargo space. Some people need a pickup truck. Others want a sports car or convertible. Some just want something other than a Honda (?).

There are certainly other alternative cars that offer the same or nearly the same qualities as the Civic. Following are some of those that have garnered “best car” nominations in their classes by respected automobile reviewers such as Consumer Reports, Motor Trend, Car & Driver, JD Power, and others. We list them here in no particular order.

• Hyundai Sonata
• Hyundai Elantra
• Hyundai Genesis
• Ford Fusion
• Ford Focus
• Ford Taurus
• Honda Fit
• Honda Civic
• Toyota Prius
• Toyota Camry
• Nissan Altima
• Mini Cooper
• Scion tC
• Mazda MX-5 Miata
• Mazda5
• Toyota RAV4
• Honda CR-V
• Acura TSX

Notice that Ford is the only American car maker in our list. Ford has made tremendous strides in improved quality, reliability, and styling.

In summary, the best cars are those with the best combination of qualities that most automotive consumers are looking for.

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Online car buyers exposed to common car scam by criminal sellers

Users of online car buying sites such as AutoTrader, Craigslist, online newspaper classified auto ads, and other non-dealer car sites often find unbelieveable good deals, only to find it was no deal at all, but a common car sales scam.

We often hear the question, “Is this a scam?” from car buyers who have found a “great deal” online. Buyers become suspicious because the price is “too good” and the payment and pickup arrangements seem a little fishy.

Cheap cars advertised on Internet sites can be scams, and it is relatively easy to spot them after the seller has been contacted, but not before. A car-for-sale ad placed by a scammer looks like any other ad — except the price is much lower than normal. They even provide pictures and VIN numbers of real cars (snagged somewhere on the Internet) to make the ads seem more believeable.

As this is being written, this year, 2010, has become the best time to buy a new car in years.

In normal years, we would tell you that the best time to buy a car is when sales are slow at the end of the month, end or the year, or during vacation season. We would tell you that you might still have to negotiate your prices because dealers aren’t just going to give you a good deal because they like you.

BUT……..things are much different now. Sales have been slow for over a year and are still slow right now. As a result, we are now seeing some of the biggest and best car incentives on new cars that we’ve seen in years. Nearly every car manufacturer is now offering a combination of large factory-to-customer rebates, low-interest loan deals, 0% APR loans (even on long 72 month loans), special lease deals, free maintenance, and “secret” factory-to-dealer rebates that dealers usually give to customers.

Why has 2010 become such a good time to buy a car?

Cheap cars can be found in many places — if you know where to look. Following are just some of the places you might find cheap cars:

Independent Used-Car Dealers – Independent used-car lots are a potential source of affordable cheap second hand cars. Many lots have older vehicles that can be real bargains, but might require a little work. You should take care to determine if the price is fair and that the vehicle has no hidden problems. Most used cars are sold “as-is” and come without any kind of warranty or return policy. Check out local used-car lots in your area but also consider large national or regional used-car dealers such as CarMax.

New-Car Dealer Used Car Lots - Many new-car dealers also sell pre-owned cars. Most new-car dealers only offer relatively late model used vehicles that have been taken in trade or are off-lease, and are in good condition — and are relatively expensive. But bargains can be found. Therefore, it doesn’t hurt to check out local new-car dealers but also look at other sources listed below. Some new-car dealers sell “certified” used cars — at a higher price. These cars have been inspected thoroughly and come with a short guarantee.

Buy-Here-Pay-Here (BHPH) Dealers – BHPH dealers are a different kind of used-car dealer that provides in-house financing, usually with no credit check. Most BHPH dealers are local and can be recognized by their “we finance anyone” or “no credit check” banners. Be aware that interest rates are usually very high and payment terms are strict. See “Should I Buy From a Buy-Here-Pay-Dealer Car Dealer” for more details.

What are the most popular used cars — the cars most people are interested in — the best used cars?

We wondered about that question too. Are there certain cars that most people are buying, asking about, seeking information about, and asking for pricing on? What car makes and models are most popular? Are they the best cars to buy?

Well, we went to one of the most-visited used-car web sites, UsedCars.com, and found such a list. Actually, the site compiles a real-time list of the makes and models that their site visitors most often request information about, which is an indicator of the most popular cars.

The most-popular car list can change from day to day, but not by much. A vehicle that is #1 today might fall to #2 tomorrow, and vice versa, because the rankings depend on what online visitors to their web site are asking about and searching for on any particular day.  

Here’s the current list of most popular used cars at the time of this writing:

Figuring car payments is easy if you have the right calculator — it’s not easy math otherwise

Car payment calculation is not simple math. It requires a rather complex business math formula that is not easily done by hand and most people are not capable, or not willing, to take it on. It’s not as simple as dividing loan amount by the number of months in the loan. Finance charges (interest), which change every month, must be accounted for.

It’s much easier to use a hand-held business calculator, such as the HP 12c or HP 17b, or, even better, use an easy online auto loan calculator which does the math for you.

To use a car loan calculator, you must know the amount being financed, the number of months you want to finance, and the interest rate. You’ll also need to know the down payment amount, if any, and the value of your trade-in vehicle, if any. You also need to know the sales tax rate that applies to your home location, not where you buy your car.

Who needs a co-signer for a car loan?

New or first-time car buyers are often surprised at being turned down for a car loan because they have no credit history, which unfortunately has about the same effect as having bad credit.

Lenders want to see that a borrower has a good record with previous loans and credit cards. Without a history of credit, a borrower represents a risk to lenders. If they don’t know a borrower’s history, they take the low road and assume the worst.

It’s a familiar “catch-22″ situation in that you can’t get a loan to establish credit without already having credit. So what is the answer?

Better to Buy Pre-Owned Car, or New Car?

First time car buyers have a choice of buying a brand new car, or buying a used car. Which is better?

There are advantages and disadvantages to either choice. Most people would rather have a brand new car with its new-car smell and latest style, but there are reasons that a new car might not be the best choice. Let’s take a look at the pros and cons of buying new and buying used.

Advantages of Buying New

• You get a brand new car with new-car feel and smell
• You get the latest style and technology
• You get the latest safety equipment
• You get a full manufacturer’s warranty
• You get Lemon Law protection
• You get lowest loan interest rates, if you qualify
• You get the option to lease
• You may get special manufacturer-sponsored pricing and financing

Is it possible to sell a car if you are still making loan payments and the loan is not yet paid off?

This is a very common question with car buyers and owners.

The answer is yes, you can sell the car, but you must get enough money in the sale to pay off your loan, so that your bank can give you a “clear” title to give to the new buyer. This is where problems often arise. Let’s see how.

If you are upside down

If you are still paying on your loan, you still have an outstanding balance, which might be more than your car is actually worth. This means you are “upside down” and would need additional cash, after the sale, to fully pay off your loan. Loan companies want to be paid in full immediately after the sale. They won’t allow you to continue to make payments on a car you no longer have.

Is auto insurance really necessary? Why do I need it?

Since car insurance is so expensive, partiularly for teenagers and other young drivers, it’s natural that this question should come up frequently for first time car buyers.

You need insurance on your car to protect you from the risk of disasterous financial problems resulting from accidents,  personal injury and property damage, and loss by theft, fire, or natural disasters. It may seem pointless to spend so much money on something you may never need. But if you ever need it, you’ll be really happy you have it.

It’s tempting to believe that you don’t need insurance because you are a safe driver and will never cause an accident. However, other people can involve you in an accident that is not your fault. If the other driver doesn’t have sufficient car insurance, your own insurance will take over and pay your repair bills and medical expenses.

You might avoid insurance if you had enough money to cover such problems on your own.  This is called “self-insurance.” However, self-insurance is not legally sufficient in most states and is not practical for most people.

Understanding the basics of auto insurance 

You may go through your entire life and never have a car accident. But the odds are against you. Auto insurance protects you from potentially disasterous costs of such accidents. If you are buying your first car, you must understand how car insurance works and why you need it.

Laws in most states require that drivers have at least a minimum level of liability insurance – repeat, liability insurance – not collision or comprehensive, although lenders and lease companies may require full coverage, including liability, collision, and comprehensive.

Types of insurance
An auto insurance policy might include one or more of the following types of coverage:

Is Cheap Car Insurance Possible?

Auto insurance is one of those irritating expenses of car ownership that has no immediately obvious benefit. We pay and pay, and may never get anything in return. Teenage first car buyers are always a bit startled by the high cost of insurance.

Car insurance is one of the most expensive costs of owning and driving a car, especially for teenagers and other new drivers who can least afford it. 

In this article we’ll show you how and where to find the car insurance company for your first car that has the best rates and provides the best service.

Lease vs Buy? What’s the Difference?

One of the best ways to decide between car leasing and buying with a loan is to directly compare the attributes of each, which we will show you in this article. We’ll tell you about how payments compare, about how fees are different, about advantages, and disadvantages.

Another way to help make a decision between leasing and buying is to compare the cost of each for a specific lease vs. buy situation. For this, you’ll need a special Lease vs. Buy Calculator.

Now, let’s take a look at how car leasing compares with buying with a loan.