How to Buy Your First Car: Step-by-Step Guide for New and Used Vehicle Buyers

It’s critical for new drivers (and their parents) to establish a reasonable budget. The money available for a down payment and for monthly loan installments will determine the range of car choices. 

One key consideration for teenage drivers is whether the car is meant to see them through high school, college, and beyond, or just to drive locally for a few years. That will determine how new and reliable it needs to be.

With a budget in mind, you can start on the fun part: creating a short list of vehicles. You should focus on practical choices, cars that minimize ownership costs and suit the teen’s needs.

Buying a used car or giving a child a hand-me-down is a natural choice, especially if college costs are on the horizon. We have recommendations for the best used cars under $20,000, with many available for less than $10,000.

But there’s another path: a new car, even if that means a parent has to drive an older model. This strategy isn’t for everyone, but it has its merits.

Combining expertise and data, CR and the Insurance Institute for Highway Safety now provide simple lists of new and used cars, SUVs, and minivans that balance accident avoidance, crash protection, and performance, based on Consumer Reports’ track-testing data. We then take into account each vehicle’s reliability, which we determine from annual reliability surveys of over 300,000 vehicles. The vehicle recommendations are ideal for teens, but they can serve any shopper looking for a vehicle that excels in those areas. These lists are an excellent place to start. 

Parents should resist the temptation to get a sporty, luxury, or large vehicle. A high-horsepower car or one with the latest high-tech features isn’t practical.

Insurance companies penalize young drivers with sporty cars, big engines cost more to fuel and maintain, and extra features tend to carry reliability risks. Car insurance will already be a major expense; don’t make it worse.

For a car loan, most banks require full-coverage insurance. Families should get an insurance quote in advance to get a full picture of the costs.

To reduce the risk of buying a lemon (a car with never-ending problems), identify models with a good reliability record. Check CR.org/reliability for survey-based insights that can point you to cars that hold up well over time.

Parents and teens should go online to read professional car reviews, not something from an influencer hired to hype up a specific model. Pay most attention to areas you’re most concerned about (mpg, reliability, infotainment features) and balance the writer’s perspective with your preferences. For instance, complaints about seat comfort or ride quality can be checked out during your test drive. Your opinions might be different.

A good place to start is with Consumer Reports’ reviews from our team of auto experts.

New cars are presumed to be consistent performers. (For example, each new Honda Civic is expected to drive like any other.) A casual inspection can confirm whether a car is truly in "new" condition.

On the other hand, each used car has led a unique life. Some may have been pampered, others abused. The best used cars tend to be owned by a trusted friend or family member who can share details of the car’s history.

When shopping for a used vehicle, make sure there’s a car-savvy adult on hand. Carefully look the car over inside and out, top to bottom. New or used, always inspect it during daylight hours, when you can spot paint flaws that might indicate repairs or other troubles. Essentially, you’re looking to ensure the car is in the condition the seller claims.

If the car looks good, then it’s time to talk numbers. When negotiating a purchase, it’s essential to have an experienced adult to assist.

Professional car salespeople have been trained to push sales and get the most money for a car. That’s what they do, day in and day out. Many shoppers are outgunned during this phase of car buying, and a first-time buyer usually doesn’t stand a chance going solo.

If you’re buying from a private seller, negotiating is usually straightforward. Research online what the current wholesale price (aka trade-in price) is for the car, which is your target price for what you want to pay. You can use CR’s trade-in estimator for trade and private party sales estimates based on the make, model, trim, mileage, and condition of the vehicle(s) you are interested in. 

A salesman at a used-car lot or dealership will focus on the retail price, also easily found online. Chances are, the car was acquired through a trade-in or at an auction for near the wholesale price and then fixed up, and now the dealer needs to make a profit.

Your goal should be to get as close to the wholesale price as possible, though you’ll probably end up between that and the retail price.

If you choose to finance, shop for and prearrange the loan with a lender so that you know the interest rate. If the dealership can beat that rate, great. If not, then you’re still covered. Once that’s settled, you can use an online calculator to figure out what your payments will be based on the expected purchase price and your down payment.

The salesperson will probably focus on monthly payments, which enables him or her to sneak in added profit. Because you did your homework, you can focus on the total amount rather than what the monthly payments will be.

Negotiate one element of the deal at a time. Establish the purchase price and then move on to discussing financing if you’re interested in what the dealership has to offer. Don’t be talked into unnecessary extras such as rustproofing, a fabric protector, or an extended warranty.

If the seller won’t meet what you consider a fair price, walk away. Every year, more than 40 million used cars are sold. Rest assured, there are plenty of other cars out there to choose from.

Today’s cars are leaps and bounds ahead of those from just 15 years ago when it comes to helping you stay safe on the road. There are braking systems that enable drivers to stop more quickly or steer around obstacles, and advanced driver systems that can help avoid or lessen the severity of a crash.

Standard on all recent and new cars, these must-have features are readily available on used cars: 

• Antilock brake system (ABS): Readily available, antilock brakes prevent the wheels from stopping completely during hard braking. Because the wheels don’t lock up even during emergency braking on slippery surfaces, the driver retains steering control.

• Electronic stability control (ESC): This feature prevents a car from rotating when going through a turn a bit too fast for the conditions, like bad weather. All new cars and light-duty trucks now have ESC. On older cars, ESC may have been optional. Make sure the used car you’re buying has it.

• Head-protecting side airbags: Side and side-curtain airbags have been shown to provide real protection against side impact, such as when a car is T-boned by another vehicle crossing an intersection.

• Backup camera: A backup camera is activated when the vehicle is placed in Reverse. The rear view is displayed on a center console screen, aiding parking and helping to avoid accidents with pedestrians or other cars. 

These advanced features reduce injuries and fatalities. They are readily available on new cars and on late-model used cars. If your budget permits, they are smart investments to help protect new drivers:

• Automatic emergency braking (AEB): This applies the brakes to reduce your speed if it senses an impending crash. IIHS data shows that vehicles with AEB and forward collision warning (which alerts drivers to potential crashes) are half as likely to rear-end another car as vehicles without those features.

• Blind spot warning (BSW): BSW alerts you to vehicles that are in your blind spot. It has reduced lane-change crashes with injuries by 23 percent, according to the Insurance Institute for Highway Safety and the Highway Loss Data Institute (IIHS-HLDI).

• Rear cross traffic warning (RCTW): When you’re backing up, RCTW will issue audible and visible alerts if a vehicle (or in some cases, a pedestrian) is approaching from either side.

• AEB with pedestrian detection: Some modern AEB systems automatically stop your car if they detect a pedestrian in front of it. Certain systems can also detect pedestrians behind a vehicle.

• Forward collision warning (FCW): These systems provide visual, audible, and/or tactile alerts to warn a driver of an impending collision with a car or an object directly in its forward path.

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