Chapter 1. Set your Needs
Decision Factors
Ah, the wild world of car buying, where you embark on a journey filled with more choices than a kid in a candy store. It's like trying to pick the perfect ice cream flavor—except the stakes are higher, and you can't just lick-test every option. You've got to navigate through a jungle of makes and models, weighing the pros and cons of new versus used, sifting through online reviews like you're searching for buried treasure, and dodging the endless barrage of flashy dealer offers like you're in an action movie.
So, before you dive head first into this automotive adventure, take a few minutes to
ponder your deepest desires and practical needs. Consider things like your ideal budget (because, let's face it, we're not all rolling in dough), how you plan to use the car (road trips to the Grand Canyon or just a quick run to the grocery store?), how long you're willing to commit to this four-wheeled companion, and whether you have a secret crush on a particular brand or model. It's like matchmaking, but with cars.
Now, I know what you're thinking: "But I've already got my heart set on that sleek sports car I saw in that movie once!" Hold your horsepower, and to take time for a reality check and consider all the other fish in the sea (or cars in the lot). Car manufacturers are churning out new models faster than you can say "vroom vroom," and what you thought was just a clunky old jalopy might actually be the perfect fit for your needs and budget. So, keep an open mind, because you never know—you might just find your automotive soulmate in the most unexpected place.
Think about questions like:
- How many people and how much cargo do you need to carry the great majority of the time?
- You may be used to a large SUV that can carry eight people and tow 6,000 pounds, but do you still need that vs. renting something on the occasions when it's needed?
- How many miles do you drive on a weekly basis and how much are you spending on fuel, insurance, maintenance and repairs vs. what you would prefer to spend?
- You may be used to a large vehicle, but does it make sense to drive a 4,000+ pound vehicle to carry one person on a daily 50-mile commute when there are many smaller, more economical options offering the same or similar comfort?
- How important is it to have the latest style, convenience and safety features? If it is, then a new or almost new vehicle that will extract a premium price may be best.
- Would it be in your best financial interests to get a vehicle that just meets your needs rather than exceed them? If so, you could put the the money you'd save on monthly expenses into a savings account and enjoy watching it grow rather than disappear.
Not sure whether you really need, want, or can afford a new car right now? If your current car is reliable and safe, consider not buying another one until you can make a larger down payment and save significantly on interest charges. Consider one of the options below, or a combination of the two.
A. Rejuvenation—Fix up your car with all or a portion of your down payment
You might be surprised about how much these investments can improve the look and feel of your car, and how much you'll enjoy having no car payment!
- Major tune up, including all fluids and belts
- Professional detailing, inside and out
- Touch-up paint and repair damaged trim
- New headlights and taillight bulbs, and polish or replace plastic covers
- New seat covers
- New tires and shocks
- New aftermarket Bluetooth, rearview camera, audio, and navigation system
B. Deferment—save for a larger down payment
A larger down payment can reap significant rewards. For example, financing a car that has an out-the-door price of $30,000 looks like this:
- Price: $30,000
- Interest Rate: 7%
- Term: 48 months
- 20% down payment: $6,000
- Monthly Payment: $574.71
- Total interest cost: $3586.07
Instead, put the $6,000 down payment plus the $574.71 monthly payments into a high yield savings account and enjoy these results:
- Saved the original $6,000 plus around $600 interest
- Cumulative monthly savings of $13,793 plus up to $1,450 interest
- Total: $21,843 for a down payment
- Reduced monthly payment from $574.71 to $195.33 and total interest cost of $1,218.82—a savings of $2,367.25
- If you're still comfortable with the $575 per month, you can still buy a much better/newer car costing closer to $50,000!
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Priority Checklist
Review the Priority Checklist below, choose your highest priorities, enter them into a Set Your Needs worksheet and let those be your shopping guide. If you take the time and effort to do this, the chances of making the best choice will greatly increase.
Body Types
- Sedan
- Coupe
- Hatchback
- Convertible
- Wagon
- SUV/Crossover
- Van/Minivan
- Truck
Brands/Models
Unless you are sure about some brands and models you prefer, it may be best to leave this open and just choose a body type. Then, when you search for reviews, ratings, vehicles for sale, etc., any favorites will appear along with similar vehicles which meet your needs, perhaps with other benefits such as better warranties, free service plans, rebates, discounts and low interest rates.
- Check the frequency of repair history and reliability for makes/models that you're interested in at Consumer Reports (subscription required) and/or J.D. Power.
- For information about vehicle manufacturers, their brands, and manufacturing locations, see Appendix 3.
Power Types
See Appendix 1 - Power Types for details along with the pros and cons of each type:
- Internal Combustion Engine Vehicle (ICEV) - Gasoline
- Internal Combustion Engine Vehicle (ICEV) - Diesel
- Battery Electric Vehicles (BEV)
- Hybrid Electric Vehicles (HEV)
- Plug-in Hybrid Electric Vehicle (PHEV)
- Flex-Fuel Vehicle (FFV)
- Fuel Cell Electric Hydrogen Vehicle (FCEV)
Transmission Types
See Appendix 1 - Transmission Types for more information. Automatic or manual are the only options, but there are very few cars still available with a manual transmission.
Drive Types
See Appendix 1 - Drive Types for more information along with pros and cons of each type to help you decide:
- Front Wheel Drive (FWD)
- Rear Wheel Drive (RWD)
- All Wheel Drive (AWD)
Age
- New
- Used - Certified Pre-owned (CPO)
- Used 2-3 years old
- Used 4-5 years old
- Used more than 5 years old
Price Range
- Less than $10,000
- $10,000-$15,000
- $15,000-$20,000
- $20,000-$25,000
- $25,000-$30,000
- $30,000-$35,000
- $35,000-$40,000
- $40,000-$45,000
- $45,000-$50,000
- $50,000-$55,000
- $60,000-$65,000
- $65,000-$70,000
- $70,000-$75,000
- More than $75,000
Safety
- Blind spot monitoring and lane departure warning: These safety features can help to prevent accidents by warning you if there is a vehicle in your blind spot or if you are drifting out of your lane.
- Rearview camera: A rearview camera can help you see what's behind you when you're backing up, making parking easier and safer
- 360-degree camera systems: Get a bird's-eye view of your surroundings for easier
- parking and maneuvering in tight spaces.
- Pedestrian and object sensors: Alerts you to nearby objects with audible warnings.
- Driver-assistance features: Advanced driver-assistance systems (ADAS) like adaptive cruise control, lane departure warning, stability control, and automatic emergency braking can help prevent accidents and make driving safer and less stressful.
Comfort & Convenience
- Heated and ventilated seats: These features are becoming increasingly popular, especially in extreme climates. Heated seats provide warmth on chilly days, while ventilated seats keep you cool on hot days.
- Sunroof or moonroof: A sunroof or moonroof lets in natural light and fresh air, making the cabin feel more open and airier.
- Panoramic sunroof: a larger sunroof that extends over the front and rear seats, providing even more light and a more open feeling.
- Massage seats: Massage seats can help to relieve tension and stress while you're driving.
- Adjustable lumbar support: Adjustable lumbar support can help to improve posture and prevent back pain.
- Noise cancellation: Noise cancellation systems can help to reduce road noise and other unwanted sounds, making the cabin a more peaceful place.
- Keyless entry and start: Keyless entry and start systems allow you to lock and unlock your car and start the engine without having to take a physical key out of your pocket or purse.
- Remote start: Remote start allows you to start your car from a distance, which can be helpful on very hot or cold days by starting the climate control system.
- Power-adjustable seats: Power-adjustable seats allow you to nd the perfect driving position with the push of a button.
- Heated steering wheel: A heated steering wheel can provide warmth on cold days, making your driving more comfortable.
- Parking sensors and automated parking: Cars can now park themselves, taking the hassle out of parallel parking or tight garages.
Technology & Infotainment
- Android Auto and Apple CarPlay allow you to connect your smartphone to your car's infotainment system, so you can use your apps hands-free.
- Navigation systems: A built-in navigation system can help you get to your destination without having to rely on your phone or a separate GPS device.
- Large touchscreens: Many cars now have central touchscreens that control everything from climate to navigation to music. But the best user interfaces are a combination of buttons for the most used functions and touchscreens for everything else.
- Digital instrument clusters: Traditional analog gauges are being replaced by digital instrument clusters that can be customized to display whatever information you want, from fuel efciency to a g-force meter.
- Head-up displays (HUDs): HUDs project driving information like speed, navigation, and even warnings onto the windshield, keeping your eyes on the road. Some advanced HUDs are full-color and can display a wealth of information.
- Natural language voice assistants: Cars are becoming smarter, with built-in or smartphone app voice assistants understanding natural language commands like "I'm cold" or "Navigate to the nearest coffee shop."
- Remote vehicle control: Control various aspects of your car remotely, like starting the engine, pre-conditioning the cabin, or checking the battery level, using your smartphone app.
Fuel Mileage
- Any
- 10+ MPG
- 20+ MPG
- 30+ MPG
- 40+ MPG
- 50+ MPG
