Looking to buy your first car? Congratulations—What an exciting time! On this page, we will be equipping you with what you need to understand the process of buying a car, tips to help secure your first auto loan and ultimately help you drive off into the sunset with your awesome new car.

If you’re in the market for buying your first car, here are the things you need to consider:

• What’s a Good Price for a First-Time Car?
• What’s a Good First Car? — Understanding Your Needs
• Are You Looking to Buy New or Used?
• Where Will You Buy Your Car?
• 3 Ways to Get a Better Loan for Buying Your First Car

What’s a Good First Car? - Understanding Your Needs

Before you even start looking, it’s important to take a few minutes to sit down and identify your needs. We’re not going to point out any specific makes or models that you should look to purchase, but here are a few factors you should consider as a first-time car buyer:

Purpose - Why are you getting the vehicle? Do you just need a car to get to and from work? Maybe you need something bigger to move tools or transport hardware? Maybe you have a big family and need a lot of seats?
New or Used - While getting a brand new car can be exciting, it may not be the best option for first-time buyers. In addition to costing more upfront, new cars depreciate in value more quickly and will cost more to insure. On the other hand, used cars can come with unexpected malfunctions, especially when buying from a private party.
Fuel Type - As the prices of gas and diesel continue to rise, it may be worth considering eco-friendly options.

What’s A Good Price for a First-Time Car?

Rewind the clock to 1963. You walk onto the lot of your local car dealership and there is a sleek new Corvette priced to sell at just over $4,000 MSRP. Unfortunately, it’s not 1963, and here in 2022, that same car will run you $80,000 or more!

With the price of both new and used cars continuing to climb, it can be hard to know what is and isn’t a good price for your first car. To help you out, we’ve created a tool called PNC Total Auto® that can help you get an idea of what vehicles are available on the market, how much dealerships in your area are charging and how those prices compare to the industry at large.

As a general rule of thumb, you should always be able to afford at least 10% of the total cost of your new vehicle upfront as a down payment. So, for example, let’s say you’re looking at a new 2021 Ford EcoSport priced at around $20,000—you should have at least $2,000 in cash for your down payment. If you can’t do that, then you may be shopping outside of your price range.

Getting Pre Approved for a First-Time Auto Loan

If you’re trying to decide how much you can afford to spend on your first car, getting preapproved for a loan is an excellent step. When you are preapproved for a first-time auto loan, the financial institution will likely take into account your credit history, income, and other factors to estimate the amount you will qualify to borrow.
As fun as it can be to look at high-end sports cars or fully decked out trucks, there’s not much point shopping for those if your loan will only cover $20,000.

Are You Looking to Buy New or Used?

We mentioned a few quick points on this debate, but in this section, we’d like to give a little more insight to help you settle the new vs. used debate for your first car purchase. To make the point, we’ll be comparing two Honda Civics—a 2022 and a 2017.

Now, this compact car won’t be the right fit for everyone, but it will help to enforce an idea that will be true for any first vehicle you buy. Without further ado, let’s look at some Civics.


• New 2022 Honda Civic - $22,350 MSRP
• Used 2017 Honda Civic - $11,000 to $18,000

While the 2017 Civic may not have all of the same bells and whistles, it could save you anywhere from 5 to 10 thousand dollars to buy your first car used. It’s important to remember that you can always upgrade later. This is your first car, not your dream car, and not your last car.

Cost to Insure

Depending on where you live and other factors, including age and any previous accidents, this can be a pretty substantial difference. In many cases, the new car will cost almost twice as much to insure. Now, this doesn’t have to be a deal-breaker, but if you’re someone on a tight budget, it’s certainly something to consider.

Whether you buy new or used, it always pays to shop around and find the best deals. You can also generally find savings by bundling other types of insurance (like renters or homeowners).


When you buy a new car, its value drops the second you pull off of the lot. Maybe you’ve heard this before, but how does it actually work? Let us explain.

Once you register a car, it is no longer new but used—this instantly slashes its value. Within the first year of owning a new car, it could be worth 20% less than what you paid the dealership. The car will continue to depreciate for the first five years of ownership until it reaches about 60% of its original value. From then on, depreciation will be based upon the vehicle’s mileage and condition.

Closing Thoughts on the New vs. Used Car Debate

We’ve broken down three key reasons why buying a new vehicle may not be the right financial decision for a first-time car buyer. In closing, we just wanted to make two quick points.

Buying Used - Just because you’re buying used doesn’t mean you have to settle for a suboptimal vehicle. You’ll want to be looking for something that was well taken care of that should continue to be reliable. A $500 car might sound nice on paper, but it doesn’t actually save you money if you’re back to walking again in two weeks.
Buying New - While it may not be the right financial decision for everyone, there is nothing inherently wrong with looking at new vehicles as a first-time car buyer. Consider what your needs are, what your budget is and make the best decision for you.

Where Will You Buy Your Car? - First Time Auto Loan Options

Whether you’re looking for something new or used, there are three options to look at when it comes to where you will buy your first car. You can:

• Buy from a dealership
• Buy from a private seller
• Buy out the vehicle you’re leasing

Each of these come with their own pros and cons, but which is best for the savvy first-time car buyer? Let’s briefly explore each option to see.

Buying Your First Car From a Dealer

As a first-time car buyer, working with a dealership may be your safest option. The process will be fairly straightforward. You will test-drive and inspect the car, negotiate a price, sign the necessary paperwork and then be on your way. While securing payment first is not necessary, it will help the experience go more smoothly and help you get more attention from salespeople.

But why is it a safe option? The main reason is that dealerships are responsible for disclosing problems the vehicle might have or repairing those issues before selling it to you. If you’re buying a new vehicle, you will also receive a warranty built to protect your investment through the first few years of ownership.

Please keep in mind that the price you end up paying will not be the same as the sticker price on the car. While that may be what you pay for the vehicle itself, you will also have to cover fees for documentation, prep and delivery, sales tax and any additional accessories or extended warranties that you may choose to purchase. While buying your first car from a dealership may be safer in some respects, it may also end up being the most expensive because of these additional expenses.

See if PNC's Traditional Auto Loan Options are right for you.

Buying Your First Car From a Private Seller

You’ve been looking on third party marketplace sites and you've found it–the perfect first car. But it’s just an individual selling it. Or maybe you’re even looking to buy a used car from a friend or family member. How does this work?

In short, buying from an individual is very similar to buying from a dealer. You’ll have to fill out some of the same forms and get a loan if the vehicle is more than you can afford.

Here are the key differences to be aware of:

• There are no dealer fees on private sales.
• Private sellers do not have the same obligation to disclose flaws.

There are, of course, pros and cons to this. The biggest pro is that an eager private seller is probably going to give you a much better price than an established dealership. The biggest con is that you’ll have to scrutinize every inch of the vehicle before purchasing to make sure you’re buying a reliable first car and not just inheriting someone else’s car problems.

Tip - Don’t be afraid to ask the seller if you both can take the car to a mechanic for a thorough check prior to purchase, and always run a vehicle history report on the vehicle to see if it’s had any reported issues in the past. These extra steps could save you a lot of trouble in the long run.

See if PNC's Private Auto Loan Options are right for you.

Buying the Vehicle You’re Leasing

If you’re leasing a car, then you’re already familiar with having a monthly car payment, and by having that, you’ve built up some credit history. Well done you!
Naturally, the next step is buying your own car. But you like the car you’ve been leasing. If only there were some way you could just keep that car. Guess what–there is!

If you want to do this, you will need to talk to the finance company you’re leasing the car from to determine whether or not a lease buyout is possible. In some instances, you won't be able to purchase the vehicle until the end of your original lease contract.

See if PNC's Auto Lease Buyout Loan Options are right for you.

The Answer - Where Should You Buy Your First Car?

In the end, there is no right answer. All three of these buying options can be positive and result in you driving away in your first car! The important thing is deciding which route you’re going with and finding an appropriate lending solution that fits your needs.

3 Ways to Get a Better Loan for Buying Your First Car

Whether you want more money for your first-time auto loan, better credit rates, or just more options, here are three ways you can make that happen.

1. Increase Your Down Payment

If you’d like to reduce the overall cost of your first-time auto loan, saving up for an increased down payment is an excellent way to accomplish that. We talked previously about making sure you have at least 10% cash to put down when buying your first car, but what happens if you have more?

There are three key things to note–it helps you negotiate a better interest rate, helps you build equity faster and it decreases your monthly payment moving forward.

2. Building Your Credit

Unfortunately, this is not a quick solution to getting a better loan; but building strong credit is the key to getting the most out of any loan opportunity. During the pre-approval process, your credit score and history will be one of the largest factors in determining what size loan you qualify for.

If you have a credit card or have previously had a loan, then you have at least some credit history. You can improve your credit score as needed by paying off debt and making consistent on-time credit card payments. As you monitor your credit report, you will see a positive change over time.

The better your credit, the more money and better rates banks will likely be willing to loan you because they can be confident that you will pay it back in a timely fashion.

3. Cosigning Your First Auto Loan

Having a cosigner on a first-time auto loan allows you to benefit from a friend or family member with a higher credit score than your own. By agreeing to take full responsibility for any debts you are unable to pay, a cosigner gives you access to a larger loan and often significantly lower interest rates.

If you have low or no credit and do not apply for financing, using a cosigner on the purchase of your new vehicle may be your only option. Be aware that some people may not wish to be cosigners on such a major purchase because of the direct link it has to their own credit.

Closing Thoughts for First Time Car Buyers

Buying your first car can definitely be an exciting experience, but it is a major life decision as well. We hope we were able to answer your questions and provide some practical advice to help you through the ins and outs.