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How to Buy a Car That's Right for You

There are many things to consider when buying a car. If you at this site because you are trying to save money, my first bit of advice is to buy used. I know people hate dealing with used car salesmen, but the savings can be significant.

Ok, the first piece of advice may have been put in jeopardy by the recent "employee price discounts" offered by nearly all American car companies. I still think it's better to buy used, and over time you will see the low price of new cars drive down the price of used cars. Think of it this way: Why would anyone buy a 2-year-old car with 30,000 miles on it for $9,000 when they can get the same model, but brand new, for $10,000? They will obviously buy the new car. The decreased demand for the used car will drive its price down. Simple economics.

My second piece of advice is to consider insurance. For many drivers, this is still the number one annual cost of owning a vehicle. I say use common sense. If you are making under $30,000/year, do not buy a sports car. In rural areas you will usually pay between $2,000 and $3,000 each year to insure a sports car. In metropolitan areas you'll probably be paying $5,000 - $7,000. I'm talking about lower-end mass-market sports cars, like the Ford Mustang GT, the Pontiac GTO, or the Dodge Charger. Corvettes, Vipers, and exotics will likely cost you much more, even if they are used.

Fuel economy has become an increasingly important factor when buying a car. As we saw with the hurricane in the New Orleans area, gas prices can soar in the blink of an eye. Many parts of the country could be facing $3+ per gallon for the near future. This does not mean you should go out and buy a hybrid. These cars are very popular right now, which translates into them being more expensive than they should be. Even with high gas prices, your savings will probably not equal the added price you pay for the car. I would advise buying a small car if you do not need to transport a lot of people or cargo. Small cars not only get the best mileage, but they also tend to be the lowest priced.

Chances are the best car for most people viewing this site will be a small used car, or a small new American car with an employee discount. Try looking in the Consumer Reports Buying Guide (available at your local bookstore) to see which models are most reliable and best fit your needs.