Buying your first car

The idea in plain words

A monthly payment is only part of what a car costs. Add insurance, fuel, maintenance, registration and the value the car loses each year, called depreciation. A longer loan lowers each payment but raises the total interest you pay, so a car that looks affordable monthly can be expensive overall. Insurance protects you from large unexpected costs, and what you pay depends on factors such as age, driving record and the car. Learning this before a dealership is the cheapest way to learn it.

Your plan

1. List all the costsWrite the payment, insurance, fuel and repairs in one monthly total.
2. Compare loan lengthsSee how a longer term changes total interest.
3. Play the dealershipPractice negotiating and spotting tricks in a game.

Try it with our free tool: Loan payoff calculator.

Handpicked resources

• NGPF Used Car Dealership Game

  Explore deceptive sales tactics and total cost of buying a car.

  FreeGame & simulation

  Select Shady Sam’s Slick Wheels in Arcade.

• Khan Academy Car Buying, Housing, Insurance

  Self-paced tests, examples and practice around housing, vehicle loans and insurance.

  FreeCourse & lessons

• NGPF BUMMER! Insurance Game

  Understand insurance choices and unpredictable setbacks.

  FreeGame & simulation

  Select BUMMER! in Arcade.

• MoneySKILL Housing and Auto Lessons

  Distinct modules on renting, homeownership, car purchases, insurance and household risk.

  Hidden gemFreeCourse & lessons

• Shady Sam’s Slick Wheels

  Spot deceptive car finance and dealer sales tactics.

  Hidden gemFreeGame & simulation

  Individual game is selected on publisher Arcade page; URL points to collection.

Knowledge check

Educational practice, not financial, tax or legal advice.