A New Set of Wheels

If you've decided that it's time to buy a car, you probably can't wait to head to the dealership to start your test drive. But before you even think about makes and models, there are other things to first consider. They're not nearly as much fun as that test-drive, but they'll help you make better car-buying decisions.

If you've decided that it's time to buy a car, you probably can't wait to head to the dealership to start your test drive. But before you even think
Table of Content

* 1. A New Set of Wheels
* 2. Financing: Where will you turn?
* 3. Used or New?
* 4. Buy or Lease?
* 5. Choosing the Car

about makes and models, there are other things to first consider. They're not nearly as much fun as that test-drive, but they'll help you make better car-buying decisions.

Begin the buying process by looking at your finances. You'll automatically narrow your choices when you figure out how much money you can realistically spend.
The budget

No one likes to make a budget, but it could be the most useful thing you do when it comes to purchasing a new automobile. Think about it this way: If you have no idea how much you can spend, you may wind up buying something you can't afford. If you don't have the money to make your payments, your car could wind up being repossessed, leaving you with no car and loads of debt.

To avoid that scenario, use conservative figures to determine how much you can set aside for a car payment. Naturally, you're going to have the purchase price. If you have a down payment, either from the sale of a current car, trade-in, or savings, factor that into the equation.

Every car needs insurance, and you'll also have maintenance and repair expenditures. Your insurance agent can quote you some rates, and check with Consumer Reports and other online resources for repair histories on different cars.

Give yourself plenty of wiggle-room in your monthly budget. Most importantly, be sure you don't sacrifice savings for retirement or the kids' college educations just to get a nicer car. It might be short-term fun, but it could spell long-term disaster.