Don't forget to figure in the costs of insurance, gas and maintenance...

Don't forget to figure in the costs of insurance, gas and maintenance when you calculate your monthly costs.  Credit: Getty Images/iStockphoto/fatihhoca

For some 18-year-olds, buying a car is a necessity. It’s typically their first big purchase. The process can be intimidating.

A little advice can go a long way toward getting young folks off to a good start. Experts weigh in.

Get pre-approved for a loan

Why is pre-approved financing important? You likely won’t get the best deal at the dealership. “Dealers now make more from financing than they do from selling cars. The average markup on a new car loan and related products is over $1,900 – an 80% increase since 2010,” says Sonia Steinway, CEO of Outside Financial in La Jolla, California, which provides auto financing. You’ll be in good stead for pre-approval if you’ve held a job longer than a year or have a co-signer.

“Negotiate financing just as much as you would negotiate the price of the car,” say Steinway. She recommends seeking out credit unions. “Many credit unions offer special rates for first-time buyers, including Bethpage Federal Credit Union and Island Federal Credit Union.”

Don’t buy more car than you can afford

Remember the loan costs do not include insurance, gasoline or car maintenance. These expenses will increase your monthly costs. “Be sure to get the true cost of ownership so you are not car poor,” says Lauren Fix, The Car Coach with, which has information useful for first-time buyers.

While it’s easy to shrink your monthly payments by extending the term of your loan over more years, Fix warns against doing so. “The negative side to extending terms -- you most likely will be upside-down on the value of the vehicle. This means you owe more than it’s worth.”

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