Car Buying Guide

Car Buying Guide

Besides your home, a car is probably one of the most important and costly purchases you will make. Like in anything, preparing yourself before you start can make the buying process much easier. Knowing exactly what you need (and what you want) and the limits imposed by your budget will make the car-buying process go a lot smoother and help you avoid the infamous car-buyer’s remorse along with other car owner woes.

Decide on the price first

Some people may have saved enough money to be able to pay cash for a new car. Others must finance the purchase. Take a careful look at your budget to determine how much you can afford to spend as a down payment on a new car and how much you can spend on monthly payments.

Once you’ve decided on your price range, decide what type of car you need and want. It may be painful to make that distinction in your mind, but in the long run, financial security is worth more than a fancy leather interior. When making this decision, also consider how many people you are planning to take (do you have kids or are you planning to have kids? Do your friends frequently bum rides off of you?) and what you plan to do with the car (personal commuting, taking the kids to baseball practice, going skiing/snowboarding in the mountains, etc.) While a sports coupe might be just what you need to get back and forth to work in style, a larger vehicle may be in order if you lead an active lifestyle and require space for outdoor equipment, or if you have kids to haul to school and back.

Knowledge is power (and it will save you money)

Once you decide on the type of car you need, it is time to do your research to narrow down the choices. A number of publications and online resources such as our New Car Information Center can provide comparative information and ratings and reviews of the vehicles you select. In addition, never forget to simply ask around in your family and friend circle to see what they like and dislike about their cars.

Things to look for and compare in your selection of new and used cars:

• Safety
• Reliability
• Features/Options
• Fuel economy
• Ownership costs
• Warranties/Recalls
• Car Title History

Safety

Consider the safety features offered. Many auto makers are now offering side airbags for both the driver and front passenger, while base sedans such as the Honda Accord even offer side curtain airbags for rear passengers. Keep in mind that side-impact collisions, aka “t-bone” accidents, are usually the most dangerous, and side curtain airbags offer excellent protection in passenger cars.

Other optional safety features include built-in child safety seats, anti-lock brakes (ABS), and traction control. ABS and traction control help keep your car’s wheels from locking up and the car skidding out of control if you have to suddenly brake very hard or if you encounter ice or snow patches on which you have to brake.

Visibility: consider whether the car has good outward visibility, and whether or not the gauges on the instrument panel are easy to read. Some cars have large blind-spots in the rear-quarter sections, and some are difficult to see out directly behind. Some more luxurious cars boast rear-facing backup cameras.

Crashworthiness: The U.S. Department of Transportation (DOT) and the Insurance Institute for Highway Safety (IIHS) run crash test and safety programs, comparing how well each vehicle protects the driver and passengers in many different types of crashes. To research the safety features and crashworthiness of your next car, click here. For the top safety picks for 2009 as well as safety information on all new and used cars, visit IIHS.org and also see safecar.gov as well for comprehensive information on airbags, rollover protection and other car safety issue.

Reliability

A number of sources including ourselves compare maintenance/operating costs on vehicles and have compiled information about repairs that are likely with particular models. Information is also available on the number of complaints filed about particular cars as well as recalls. For example, see our breakdown of the 5-year total ownerships costs for a 2009 Scion tC, (simply pick your car at the top instead of the Scion to see that car’s data).

Regarding lemons: If you buy a "lemon" that needs constant repairs, you may be protected by "lemon laws" in your state. The car manufacturer may be required to refund your money or repair the vehicle. Maintain a file of every repair order, receipt, and letter of complaint. (Click here for lemon laws by state)

Features/options

Consider your particular needs when analyzing different vehicles. For instance, if you need a lot of trunk space for hauling groceries, soccer equipment, or boxes of supplies for your office, you’d be wise to choose a sedan with a larger trunk or even a crossover SUV, versus a two-door sports car with a trunk barely big enough to swallow a set of golf clubs.

Will others be riding in your back seat? How often? You may want to choose a four-door model over a two-door one. Sit in the back seat yourself and see if there is enough leg room for your passengers.

What size engine do you need? Smaller engines may give better fuel economy, but larger engines will give you more performance. If keeping costs low are a priority and you simply want a comfortable and nice ride, the base engine offering in most any car will suffice, as current engine and transmission technology allow for even low-horsepower automatic cars to be quite spiffy and easy to pass with on the highway. If you can afford an couple extra grand and know you can’t live without a fast car, go ahead and spring for the V-6 or V-8 you’ve always wanted. If you plan on towing anything with your vehicle or if you’re going to be hauling lots of stuff, once again, don’t be afraid to look for the bigger engines as having a car or truck that can’t cut the mustard when it comes to doing what you need, you will sorry for downgrading. If you’re unsure, take whichever vehicle you’re considering for a test drive with various sized engines

When shopping, consider the standard features. All the cars of a particular make and model come with a standard package of features. Optional features usually add costs to the car. Some models have more standard features than others. For instance, some models include a multi-CD changer and sunroof as standard, while for others it’s a significant premium over the base model. Once again, try to make the distinction between what you want and what you really need. Air-conditioning for the most part standard on every base model out there.

Consider what items contribute to the resale value of the car. Items which may enhance the value of a used car include: automatic transmission (or for some sports cars, a manual transmission), a powerful V-6 or V-8 engine, ABS, traction control, power windows, power door locks, alarm/keyless entry, remote-adjustable mirrors, sunroof, tilt steering column, and aftermarket wheels.

Decide ahead of time what features you want in a car to avoid being swayed by package deals at the dealership which may add to the price of the car, and is something you didn’t even know you wanted.

Where to find out which car comes with what? Online sources such as our Car Specs Guide can help you compare the cost of different options. Select the features/trim level of the car you want, and weigh the cost of these options with their usefulness. Add up the options to determine generally how much they will cost you. You can also evaluate the different options that are available, and point out details that are important to you. Many car makers offer "option packages," which include popular options, such as a sport package or touring package, but also may include some features you may not want or need. To get the option you do want, you may have to buy those you do not want.

Fuel Economy

Mandated by federal law, fuel economy has improved over the years. The average fuel economy is now more than 28 miles per gallon. Federal law requires an Environmental Protection Agency label to be placed on the window of every new car, listing average fuel economy for city and highway driving according to EPA tests. The ratings are intended to be a comparison between models. Depending on how and where you drive, your actual mileage may not match the estimates.

Fuel costs are projected to keep rising in the future, so keep that in mind regardless of the current low(ish) gas prices. If you want to stay within your budget and just want a comfortable and nice car to take to work/school and don’t have any unique automotive needs, the base engine offering in most any car will suffice, as current engine and transmission technology allow for even low-horsepower automatic cars to be quite spiffy and easy to pass with on the highway. With a small to mid-sized four-cylinder sedan you’re looking at getting around 30MPG on average, while a small crossover vehicle with a four-cylinder engine will get you around 22 to 27MPG average.

If you’re buying a truck or SUV and plan on tackling rugged terrain or will be hauling a trailer, power and performance will be high up on your list so don’t be afraid to look at large displacement gasoline V-8’s or better yet, diesels. For sheer towing performance, diesel beats gasoline hands-down. Regarding diesel engines: don’t be afraid to look at the new clean diesels being offered on some European cars as well. They get excellent mileage (easily up to 40mpg on some models) and the days of stinky and noisy diesels bellowing out black smoke are long gone. You can neither smell, feel nor see modern diesels in action. The extra torque is there though, and many drivers in the states already prefer diesel due to their increased power as well as economy.

Ownership Costs

If you buy a new car, you should expect to pay more than the usual MSRP. The total cost of ownership of a vehicle has other costs in addition to financing costs. These ownership costs include insurance, depreciation, operating costs like fuel, maintenance and repair, and state registration fees. Click here to see the true ownerships costs for your next car.

Warranties/Recalls

Compare each car's warranty coverage, which may vary widely among car manufacturers. Consider the length of the warranty, mileage limits, and deductibles. Some cars have basic warranties which cover the entire vehicle, while others have limited warranties. You have to know which parts of the car, and services are covered by the car warranty. Make sure that everything you need is included in the automobile warranty. After all, it is a part of the cost that you are paying for when you purchase a new vehicle. Look up specific warranty information by car

Car Title History

The vehicle title history will give you a detailed account of any car's past, from its first registration up until the last DMV record. It is sometimes called a Vehicle History Report, VIN Check or VIN search. No matter what it is labeled, it should be a must for anyone considering purchasing a used car.

Note: a new car is of course new in the sense that it doesn’t yet have a title history which could be damaged, so if you’re looking only at new cars, you don’t need to worry about checking title history.

Using the car's unique 17 character Vehicle Identification Number (VIN), you can check the title history of any car manufactured after 1981 on various online sources to reveal the full history of the car, with problem areas, mileages, owner transfers, DMV records and much more. Other vital info will include: odometer fraud, flood/fire damage, ownership transfers, DMV registrations, emissions testing (passing or failing) and title changes. It is essentially a report card for a used car, and it contains everything you need to know before you buy.

Our personal favorite for checking car title history is CARFAX.com. A singe car title report will run you $29.99, but a 30-day non-recurring membership with unlimited searches/reports is only $39.99. We’d highly recommend checking the title on any used car you are planning to buy, whether it’s with CARFAX or a similar service.

Picking a Car!

Do not narrow your choice to just one car -- choose three or four that suit your needs and your wallet. One of the biggest mistakes new car shoppers make is being so set on buying a certain type of car that they lose the power of negotiation.

A number of cars are "twins;" they have the same engine and chassis but different names and styling. One model may be less expensive or offer more standard features than its twin. By narrowing the choice to several, you maintain your bargaining power. Thus, if you are not able to get the car you want at the right price, you can negotiate on another car.

Take a test drive

Now that you are ready to visit a showroom, it is time to test drive the cars that interest you.

Too many buyers forget this critical step. Only by taking a test drive can you determine if the car suits your needs and tastes and has good visibility in every direction, an important safety consideration, as well as how the whole experience “feels.” If your spouse or someone else will also be driving the car, take them with you to the showroom so they can do a test drive, too.

Some important things to look for:

• Visibility. Can you see the end of the hood and the trunk? Does any part of the car block your vision? Can you easily see all the mirrors?
• Steering wheel position. Are you comfortable behind the wheel? Is it easy to adjust the steering wheel, the seat, and mirrors?
• Seating. Does each passenger have plenty of head and leg room? Check rear seats, too. Fasten the safety belt in each position. Each belt should fit snugly across the hips; shoulder harnesses should ride comfortably across the shoulder.
• Engine. Does it accelerate smoothly? Does it have enough "passing power?" Slow down and speed up a few times to check out the responsiveness of the engine. Does the engine idle smoothly, or does it appear to race?
• Ride. Is the ride smooth? Does it offer responsive handling that makes you feel comfortable in all road conditions?
• Braking. Take the car out to a stretch of empty road, accelerate to about 40 mph and make an emergency stop. Does the car stop in a straight line without pulling to one side? Do the brakes lock up?
• Noise levels. With windows closed, listen to the noise level. Listen for engine noises when accelerating. At lower speeds, listen for road noises and tire sounds. At highway speeds, listen for wind whistling outside the windows.

After the test drive but before you decide on the car and sign any papers, remember to be already decided on how much money you can spend and what type of car best suits your needs.

Buying the Car

This is it, the moment you’ve prepared for—you’re about to get some new wheels! Do you want the best tips on how to negotiate and beat the dealers at their own game and avoid the slick scams many get taken with? Or are you buying private party? We have the inside scoop on how to get the your car for the best price using proven and simple buyer’s strategies, but we inform you on how to approach and make sense of dealer financing—it’s very simple once you know the basic financing lingo and terminology and what they’re trying to accomplish.

• Getting the best price (Negotiation techniques and tips to avoid common car seller tricks and dealer scams)
• Getting the best financing rate (Everything you wanted to know but were afraid to ask about how to handle negotiations with the finance person at the dealership so you don’t end up paying more over the long run and don’t get taken with various back-end sales including extended warranties and gap insurance)
• Buying vs leasing (What’s better for your situation, leasing or buying a car? What about “lease with option to buy” contracts? What if you buy all cash? What if you can buy zero-down? That and more explained)
• Credit glossary (All the credit terms and phrases used in the loan/credit industry as well as consumer credit terms you may not, but should, be familiar with)
• Finance glossary (All the finance terms you’re likely to come across, and what they mean)