Tips for Picking and Paying for the ‘Right’ New Car

Ways for you to make the car buying process easier

Buying a new vehicle takes time, research and eventually money. So when the occasion comes to purchase a new car, it’s not a choice that should be made lightly. To help consumers, AAA offers a checklist of factors to consider when looking for the ‘right’ new car.

When shopping for a new vehicle, AAA recommends the following:

Determine What Is Affordable. Before considering any specific makes or models, sit down with the household budget and determine what is affordable before visiting a car lot. AAA’s financial services experts advise that no more than 15 percent to 20 percent of your total monthly budget should go to all car-related expenses. Consider the value of your trade-in and how much cash you want to put towards the vehicle purchase. Consult with a AAA insurance agent to get a rough estimate of premiums on the type of vehicle being considered.

Evaluate Driving Habits. Take a realistic look at how the vehicle will be used. What types of trips will it be used for most frequently? How many passengers will the vehicle need to carry? How long of a commute will it need to accommodate? Will the vehicle be driven on the highway? Will you need extra cargo space?

List Needed Features (Current and Future). Make a list of all required features the new vehicle should include, being careful to separate ‘wants’ from ‘needs.’ How much seating? How much cargo? Minimum fuel economy? When making the list, think about needs today and those several years down the road. Could children be in the future? Could the commute lengthen?

Consider Depreciation Costs. The biggest yearly expense to new cars is depreciation. Research how much the models being considered depreciate within the first few years and consider a model that has a track record of holding its value longer.

New or New to You. Look at pricing options for both new vehicles, as well as models that are one to two years old. There are benefits to both new and slightly used models. New vehicles typically come with longer warranties, buying incentives from the automaker, the latest features and are widely available. Slightly used vehicles might offer a price break, but it can be more difficult to find the ‘perfect’ vehicle with the exact features a buyer is seeking and does not have buying incentives from the manufacturer.

Review Warranty and Maintenance Costs. Review the length of the warranty of vehicles being considered and exactly what it covers. Investigate the maintenance costs associated with the car by reviewing its recommended maintenance schedule and calculating new costs of regularly needed maintenance items. If the buyer consistently uses the same repair shop, ask how the cost of maintaining the new vehicle will compare with the current vehicle.

Investigate Safety Ratings and Features. Check the safety ratings of all models under consideration from National Highway Traffic Safety Administration (NHTSA) and Insurance Institute for Highway Safety (IIHS). Evaluate the safety features available on each model. If using a car seat for a child, check the accessibility to the vehicle’s LATCH system and the ease of installing a child passenger safety seat.

Don’t Limit Choice to One Vehicle. Narrow the choices to two or three vehicles that meet all the criteria, but do not narrow it down to only one. By allowing flexibility, buyers have more negotiating room and a better chance of finding the best possible price.

Financing is Key. AAA financial services experts advise that consumers gain a distinct advantage in the car buying process by arriving at the dealership with financing in hand. Carefully and thoroughly shop loan options and available interest rates in advance. Inching down a loan’s interest rate even a percentage point or two can save hundreds of dollars over the life of the car loan. Match the length of the loan to the length of ownership. Select your loan term based on how long you plan to own the vehicle and make sure your loan has no prepayment penalty.