If you’re new to car buying or haven’t made a purchase in many years, it can be hard to know where to begin. How do you find the car that will exactly suit your needs for years to come? It just takes a little research and planning. When you know the kind of car you want, you can then decide whether you want to buy a new car, lease a new car, or buy a used car.
Step 1. Assess Your Needs
The “right car” depends on who you are and what you expect from a car. Some of us like to make a statement with our cars (“I’m rich and hip” or “I’m earth-loving and retro”). Some like to go for spirited drives on weekends (“Give me more horsepower and a loud engine”). In those cases, practicality tends to take a back seat to how the car makes you feel.
But for those who need a vehicle for daily duties, functionality should trump flash. Here are some practical considerations to keep in mind:
- How many passengers do you need to carry?
- What type of driving do you do? Is it primarily highway, surface streets, off-road?
- Do you have a long commute and, because of that, is fuel economy important to you?
- Do you need all-wheel drive?
- What are your must-have features? Think backup camera, leather seats, Apple CarPlay, etc.
- What safety features are important to you? Do you want blind-spot monitoring, lane departure warning and automatic emergency braking, for example?
- What cargo capacity do you need?
- Will you be using children’s car seats?
- Will you be doing any towing?
- How much garage or parking space do you have?
Step 2. Set Your Budget
Unless you’re paying cash for your car, you’ll need to think about financing your purchase or lease. How much can you really afford to allocate toward a car payment each month? The general rule is that your monthly new-car payment should not exceed 15 percent of your monthly take-home pay. A used car will be less expensive, but the same rule should apply. If you’re looking to lease, aim for a monthly payment that’s less than 10 percent of your take-home pay. You’ll also want to factor in an additional 7 percent of your monthly income to cover fuel and insurance costs. Knowing your budget beforehand will help you when negotiating your next car or truck.
Not sure what kind of vehicles fall under this monthly payment? Take a look at the Edmunds affordability calculator, which lists vehicles that fall into the price range you’ve predetermined. Keep in mind that the prices on the results page will change based on the trim level, options, taxes and finance fees.
Step 3. Decide If You Want to Lease or Buy
Leasing and buying each have pros and cons, and how you feel about these may help guide your decision on which route to take.
For example, a lease requires little or no money down and offers lower monthly payments. But when the lease ends, you have no car and will need to go shopping again. On the other hand, buying a car is more expensive initially, and the monthly payments are higher. But when you pay off the loan, you will own a car that you can drive for as long as it runs.
Here are a few more factors to consider when deciding between leasing and buying:
- You can drive a more expensive car for less money.
- You can drive a new car with the latest technology every few years.
- Most repairs will be covered under the factory warranty.
- There are no trade-in hassles at the end of the lease.
- You have more flexibility to sell the car whenever you want.
- You can modify the car to your tastes.
- There are no mileage penalties if you drive a lot.
- Your car expenses will be lower in the long run provided you pay off the car and keep it a while.
Step 4. Consider Other Cars in the Class
Do you have your mind (or heart) set on a specific car? Many shoppers do. But in today’s ever-changing marketplace, new cars are always hitting the showrooms, and one that you’ve never even considered could be right for you. Edmunds lets you research and compare similar cars to find the one that truly fits you best.
If you already have a car in mind, you should still review other comparable vehicles in the same class to make sure you haven’t overlooked an even better choice. You can do this by choosing the same vehicle type, as listed in our Car Finder tool, and setting the parameters that are important to you. Once you settle on a worthy prospect, you can easily check for detailed information on pricing, specifications and features. You can also compare vehicles you chose to more easily contrast features and specifications.
If, on the other hand, you only know what type of vehicle you want — an SUV for example — you can consult the corresponding Edmunds “car type” section. It lists the most researched vehicles in the class and their ratings, along with the top-rated picks from the Edmunds editors.
Step 5. Weigh the Costs of Ownership
Some cars may be cheaper to buy but more expensive to own. Even if two cars have about the same price, one might depreciate faster or cost more to insure and maintain.
Before you commit to a car, you should estimate its long-term ownership costs. These include depreciation, insurance, maintenance and fuel costs. Edmunds has a great evaluation tool: True Cost to Own® (TCO®), which presents this information in an easy-to-read format. It can help you make a smart decision up front that can save you thousands of dollars over the life of the car.
Step 6. Find Cars for Sale
The old method of car shopping had you visiting dealerships in person to see inventory and find out if the cars had the options you wanted. Now, using the dealer inventory tools on Edmunds, you can quickly cover more ground and save money. Once you have an idea of the car you want, you can easily see its availability.
If you don’t find what you want in your immediate area, select a greater distance to search. You also can filter your search to find cars in a specific color, with different options or with Edmunds Special Offers.
Edmunds Special Offers apply to new-vehicle leases and purchases and give you an upfront, guaranteed price on a specific car. Once you’re ready to lease or buy, we recommend getting a few of these offers since the prices may vary from one dealership to the next. You’ll usually hear back from the dealership via an email or phone call soon after you request a special offer. This is the time to verify that the car is in stock, schedule a test drive, and ask any additional questions. If you’re not ready to complete the deal, just make a note of which dealerships have the vehicle you want, and contact them when you’re ready.
Step 7. Set Up a Test Drive
Now that you’ve found a car that seems as if it might be a good fit for you, call, text or email the dealership’s internet department to schedule a day and time for a test drive. Dealerships’ internet salespeople are great allies: They cater to informed buyers, tend to be more upfront with pricing, and they’re familiar with Edmunds Special Offers.
By making a test-drive appointment with your local dealerships, you ensure that the car will be waiting for you when you arrive. We recommend test-driving about three different vehicles so that you don’t limit your options. Try to schedule a few appointments back to back; it will make comparing the cars easier and give you a graceful exit from the dealership. While the salesperson will want to talk numbers after a test drive, you might not be ready.
Step 8. What to Look For in a Test Drive
A car might seem to have all the features you want, but the true test takes place when you are in the driver’s seat. You should test-drive the car the way you would drive it during your everyday life.
If you commute, try driving the car in both stop-and-go traffic and at highway speeds. If you trek to the mountains, see if you can find some nearby steep hills to climb. Drive over bumps, take tight corners, and test the brakes in a safe location.
Get in and out of the car several times and be sure to sit in the back seat, especially if you plan on carrying passengers. Check out the cargo space. If you plan on using children’s car seats, bring yours along to test for fit and ease of installation. Take pictures of the cars so you can reference them later.
While you are evaluating the car, don’t be distracted. Take your time looking everything over. A good salesperson will respect your need to experience the car and will let you focus on the driving experience.
Turn off the stereo so you can listen to the sound of the engine. You can evaluate the sound system when you return to the dealership. If the conversation does turn to questions about whether you’d like to talk about purchasing or leasing, you can say that you’re still in the test-drive stage.
Step 9. Pick Your Car
After test-driving several cars, the choice should be clear. If it isn’t, sleep on it. In the morning, you might have your answer. If not, you might need to take a few steps back and drive more cars. It’s better to take longer in the shopping phase than have buyer’s remorse later.
While making the right decision is important, it’s also good to realize that there isn’t one perfect answer. Today’s cars are safer than ever before. They get better gas mileage. They have amenities at a lower cost than in the past. In short, there could be several good vehicle choices, and the final decision is really a matter of individual taste.
Step 10. Time to Buy or Lease
Now that you’ve done research that, we hope, makes you feel confident you’ve found the right car for you, it’s time to become a car buyer or lessee. Here are articles that will take you through the actual car-buying or car-leasing process, including brief refreshers of some steps: “10 Steps to Leasing a New Car”, “8 Steps to Buying a New Car” and “10 Steps to Buying a Used Car.”