There's a lot to think about when shopping for a car or truck. Before you start checking out car buying sites online or visiting your local car dealers' lots, take a few minutes to review this checklist to make sure your new vehicle fits not only your budget but also your other needs.
- New or used? There are benefits to both options. Sometimes, it's easier to find a used car in your price range, though the price of used cars has gotten higher in recent years due to increased demand. A new vehicle may have updated safety features like back up sensors and collision avoidance systems that can help keep you and your family safer. If you do decide to go with a used car, have a mechanic you trust look it over to make sure there are no hidden problems and make sure it has basic safety features like anti-lock brakes and airbags.
- How will you use the car? While your dream car may be a fire engine red convertible, that's not a car you want to commute to and from work in during a snowstorm. When making a list of cars to consider, ask yourself what the car will be used for most? Commuting through heavy traffic to the city where it's tough to park? Driving four kids to school, sports, and music lessons? Hauling lumber and other materials for work? Also think about the weather in your hometown. If you live somewhere where winter ice and snow are a problem, factor that into your decision.
- How fuel-efficient is the car or truck? With gas prices above $3 a gallon in some areas, the fuel efficiency of your vehicle can have a big impact on your budget. Larger, heavier vehicles use more fuel, but there can be significant differences in fuel efficiency among different brands and models of compact cars and sedans too. When shopping for a new car, check the Environmental Protection Agency (EPA) MPG rating on the sticker. Although these stats are usually a bit higher than your actual gas mileage, it can help you compare the relative fuel efficiency of cars you're thinking about buying.
- Does a hybrid make sense for you? Choosing a hybrid or flex vehicle can lower your fuel costs significantly and there are hybrids in most every vehicle class, from small commuter cars to SUVs. In addition, hybrids are better for the environment, can help reduce U.S. dependence on oil, and may be eligible for tax credits. There are some additional factors to think about when considering this option, however. Hybrids can cost as much as 20% more than an equivalent gas-powered vehicle, so think about whether the money you'll save on fuel over time balances that higher initial expense. If you're financing your new vehicle, bear in mind the additional interest you'll need to pay if you borrow more money to purchase a more expensive hybrid.