The Car Buying Decision

by Don Elliott on April 28, 2011

When the time comes to buy a new or used car, the decision making process can be overwhelming. What make of vehicle should you buy? And then, which model do you choose? Do you need a car, a truck, an SUV, or some combination of those types? Is front-wheel drive better than rear-wheel drive? What about all wheel drive – do I need that?  What’s the best gas mileage vehicle? What are the financing options? Basically, what is the best used car value for you and your family?

Before you stop at the first car dealership or jump on the Internet, take some time to evaluate your needs and your budget.

There are three factors that should be resolved before actually choosing which car is right for you.

Make a list of what you want

Starting with the car your are driving today, ask yourself what features of that car fit your basic lifestyle and then what features are missing that you would like to include in your next car. Write it down! On average, people own their cars between 5 and 8 years. Be realistic about your choices. Circle the items that will benefit you every day. Cross off the features that would be nice to have, but would not be as important over the life of the car. For example, owning a four-wheel drive SUV would be great to take on your annual ski vacation, but the cost of gas for a long daily commute might offset that advantage.

New CarWhen making your list, it is okay to combine items or to include options that might have to be added as an aftermarket item. A friend wanted to buy a sports car while going through a bit of a mid-life crisis. However, she regularly had 3 or 4 passengers. She chose a sporty red sedan. She added heated seats after she bought her car. They weren’t available as a standard item on the car she chose but very important to her.

Paying the price

91% of people buying a new car take advantage of some type of financing to help pay for their vehicle. Making the best financing decision is almost as important as choosing the right car. Your options here are considerable:

  • What is the actual purchase price including taxes and title fees?
  • How much cash can you invest?
  • What is the interest rate and term of the car loan or lease?
  • What is the monthly payment?
  • Where will you borrow the money? The bank or credit union? Dealership financing? Home equity loan? Friends and relatives?

All of these are negotiable and can affect how much car you can afford.

Cost of ownership

Many car buyers overlook the cost of ownership when shopping for a new or used car. Most manufacturers offer some life cycle cost data on their websites. Those costs include fuel, regularly scheduled maintenance, tires, and items not covered by the new car warranty. Obviously, new cars cost more than used cars, but the cost of ownership is less.

Used cars have potential for additional costs that should be considered at the time of purchase. Having a qualified mechanic inspect whatever car you choose and advise you about expected costs is always a good idea.

Now, with your list in hand, it is time to find the best used car value for you. Let the shopping begin!

Send us a comment if this process was helpful for your car buying experience.

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