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Celebrate Life Moments

Here's how to graduate to your first grown-up car

Celebrate the next chapter of your life with a new ride.

This story is part of the Chase Guide to Buying a Car.

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Graduating from college is so much more than saying goodbye to homework, and wearing sweatpants. Earning a diploma is a one-way ticket to adulthood. Soon after, you'll land your first job, move into your own space, and be able to make serious purchases, like a car.

But between determining your budget and finding a make and model you love, you have to admit that buying your first car is nerve-wracking—especially if you know very little about cars.

Don't panic, help is on the way.

Tanya Sanders, managing director for Auto Business Operations at JPMorgan Chase, has helped many people navigate the rough roads of car shopping. Here are some of her tips for buying your first grown-up car.

1. Do your research

Sanders recommends combing through industry standard resources and user-generated reviews to save you the time—and the headache—of visiting numerous dealerships.

Once you find a few models that tick all the boxes, talk to friends, family members, and colleagues with similar models for their opinions.

"By the time you get to the dealer, you'll already know what you're looking for," Sanders says.

2. Prioritize practicality

Who wouldn't want to cruise around in a sexy, fast car? But when it comes to your own ride, Sanders urges you to prioritize practicality. Sure, heated seats and fast acceleration are cool features, but you ultimately want a car that's safe and satisfies your needs.

When researching cars, think about what your lifestyle requires. How long is your commute? Will you need to drive in the snow? Other factors to consider include seating capacity, miles per gallon, and value retention.

3. Factor in your student loans

More than 44 million Americans hold approximately $1.4 trillion in student loan debt, and if you're one of them, you're probably wondering how a car fits into your finances.

"Many students are coming out of school with a lot of debt, which is also important to consider when determining your monthly payment," Sanders says.

Be sure to include your student loans in your overall budget. Repairs are inevitable, she explains, so it's important to factor in emergency fees, too.

4. Whatever you do, don't overspend

If you paid off your loans or graduated debt-free, you can buy any car your heart desires, right? Not so fast.

"The most common mistake I've seen is getting a car you can't afford," Sanders says. "When we talk about affordability, we're considering the price of the car and how you'll be using it."

Road trips and frequent recreational use will put more wear and tear on a car, so it's important to consider costs like gas and repairs.

She recommends spending no more than 15 percent of your monthly income on your car. If you have debts beyond a mortgage or rent, keep expenses closer to 10 percent each month.

5. Give it a spin

Before you put a down payment on your ride, take a test drive.

A recent study by Chase Auto reported 76 percent of customers want to test drive a car before buying it—and for good reason. You might have found the perfect grown-up car on paper, only to find it doesn't feel right during the test drive.

For a basis of comparison, Sanders recommends trying two to three models and testing each one on road types you'll frequent. A cruise around the block is hardly sufficient if you spend the bulk of your time on highways.

What are you supposed to look for during a test ride? While steering, braking, and accelerating are important, it's also worth tinkering with the amenities, such as a navigation system or Bluetooth sound system.

6. Don't overlook pre-owned cars

Just because you're buying a car doesn't mean it has to be brand new. In fact, a used model can be the best bang for your buck.

New cars can lose up to 50 percent of their value in the first few years, after which the depreciation rate slows down.

"When you buy a used car, the upfront depreciation is paid for," Sanders explains. "The car is already an asset."

She adds that certified pre-owned cars are often the best of both worlds and frequently come with an extended warranty.

This is intended for informational purposes only.

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