Is a new car in your future?

Getting started |

Keep these tips in mind to find the best new (or new-to-you) car

The prospect of purchasing a new car is overwhelming for many people. But armed with targeted information and a little patience, you can make the process work for you. We’ve compiled tips and resources to help you confidently and efficiently navigate the changing car retail landscape.

The first step is determining the best car for your lifestyle and priorities

Think about the kind of vehicle you need

  • Commuter/work vehicle – Look into fuel efficiency, compact size and a smooth ride.
  • Family vehicle – Consider passenger capacity and any desired safety features.
  • Workhorse vehicle – Explore vehicles with large cargo areas or towing capabilities.

Identify your priorities for a car or truck

  • Environmental impact and/or efficiency – Focus your search on fuel-efficient and green vehicles.
  • Safety – While most new cars include advanced emergency braking, you may desire other active safety features such as forward collision warning, blind spot warning, and lane departure warning.
  • Lower cost – Explore purchasing a used car, a fuel-efficient car or a new car with fewer features (base model).
  • Reliability – Access reviews from customers and relatively impartial sources.

Find a car that fits your budget

Focus on total cost of ownership

When considering your car-buying budget, calculate the total price of car ownership (car principal, loan interest, sales tax and insurance) instead of simply looking at the monthly car payments. Then, examine your household income and budget to see how much you can afford to pay in a lump sum or through monthly financing options.

The method of payment influences your final cost

The most common payment plans:

  • Paying cash for some or all of the cost – The more you invest upfront, the less interest you’ll pay.
  • Leasing – Leasing may make sense for certain people who finance a new car frequently (every three years or less).
  • Financing through a loan – While every circumstance is different, you might consider a traditional rule of thumb called the 20/4/10 rule (which also can help inform your budget for a car).
    • Make a down payment of at least 20 percent on a car.
    • Finance it for no more than four years.
    • Pay 10 percent or less of your gross household income for car loan principal, interest and insurance.
    Check out a handy calculator to help you project monthly payments based on purchase price, loan interest, etc.

Consider pre-approved loans

Pre-approved loans from a bank or credit union offers flexibility and simplify price negotiations. For example, with the Everence express auto loan, you apply for an auto loan based on the maximum amount you want to spend. Once you’re approved, you’ll receive a check on which you can fill in the final price and give to a dealer to purchase a car.

Plan for additional car fees/costs

According to Consumer Reports and Edmunds.com, here are some additional fees and costs to consider: 

  • Destination fee – charged by dealers.
  • Title and vehicle registration fee – charged by the state to register a vehicle.
  • Sales tax – percentage varies by city and state.
  • Document “doc” fees – cost charged to prepare documents.
  • Advertising fee – increasingly common, but you can challenge it.
  • Insurance – check with your insurance agent to see if your rates will increase.

Research consumer and independent vehicle reviews

Now you’re ready to research ratings, rankings and customer reviews on specific vehicle makes and models. We’ll get you started with some popular sources.

  • Consumer Reports – longstanding source for impartial in-depth rankings, testing and reviews. Available through public libraries, by subscription or via online membership for full access to reviews.
  • U.S. News & World Report – offers rankings and reviews of cars and trucks.
  • Edmunds.com – newsstand publication turned online resource – consumer and editor reviews.
  • Kbb.com – (Kelly Blue Book – car valuation and review resource) – consumer vehicle and editor reviews/ratings.

Identify where you’ll buy your car

New cars

  • Dealerships offer the opportunity to test drive cars, but be prepared to negotiate a reasonable price – or walk away.
  • Auto buying/pricing programs rely on pre-negotiated prices with dealers.
    • Costco, Wal-Mart, AAA and other retailers offer auto buying programs.
    • TrueCar.com and similar services show actual prices other customers are paying. Note: If you enter contact information, dealers will begin contacting you.

Used cars

  • New car dealers – Offer certified pre-owned (CPO) cars that tend to be late-model and low mileage, have been vetted by the dealership and often come with a warranty.
  • Independent car dealers – A broader range of used cars of various years, makes and models.
  • Private sale by owner – You may find a private seller through your local mechanic, company newsletter, newspaper or by using an aggregator website like autotempest.com, which is recommended by Popular Mechanics and compiles listings from eBay, Craigslist and other internet sites.

When purchasing a used car, access information about the vehicle’s history with its vehicle identification number (VIN) through the National Motor Vehicle Title Information Service or through third-party dealers, like CarFax or AutoCheck.

Search when the time is right

The best time to research a new vehicle is before you have an urgent need for one. U.S. News & World Report offers additional tips on the 8 Best Times to Buy a Car.

Equipped with information throughresearch, you’re well on your way to finding the best car to fit your life, priorities and budget.

Everence brand mark

Author

Rebecca Kasparek
Freelance writer

Ready to buy your next car?

It's simple to apply for auto and motorcycle loans from Everence Federal Credit Union and start at 1.99 percent APR.

 

Learn more