Average time: 11 hours for steps 1–10. Spread out your research so you can think about your options as you go. Consider spending 2 hours 3 nights a week for 2 weeks and you’ll easily put in enough time to ensure you’re aware of all your options.
1. Consider your options
Begin by seeing what’s out there: compare car makes and models, prices, trims and color, safety features, reviews, cupholder size – you get the idea.
2. Make a list of what features matter to you
Determine what’s non-negotiable (safety), what would be a nice-to-have (good gas mileage), and what’s less important (sunroof, moonroof, swivel seats). Consider where and when you’ll use the vehicle and choose features accordingly. Commuting to work is different than using a car for business (like a realtor), and city streets are different than rural country roads.
If you want the best of the best, vehicle awards and rankings can help, but be sure you understand exactly what’s being evaluated, and use accolades and rankings as part of the picture, not the whole thing.
3. Determine your total vehicle budget
Before you even scope out different models, you need to have an idea of what you plan to spend – no more than 20 percent of your net monthly income is a good limit, says Kelley Blue Book. U.S. News has a helpful vehicle cost calculator that factors in taxes and loans, too.
Remember to factor in vehicle maintenance, repair costs, gas, and insurance (more on that below). If you’re on a very limited budget, this is what we recommend.
4. Determine whether you’ll shop for a new or used car
Once you know your budget and how you plan to pay, you can decide whether new or used is right for you. To help narrow down your options:
5. Decide whether you’ll buy, lease, or finance
Buy if you have the cash on hand and want to buy the vehicle outright
Lease if you plan to only keep the car for three to four years, travel fewer than 12,000 miles per year, and prefer to be under a manufacturer’s warranty
Finance if you want to make a low down payment (usually about 20%) and have affordable monthly costs and if you plan to drive a lot or put a lot of wear and tear on the car
And if you’re not sure, Edmunds has the goods.
6. Decide whether you want to buy privately or from a dealership
Buying a car privately: a how-to, and paperwork you’ll need.
7. Consider your values before buying a car
Gas-powered or an alternative energy vehicle?
Foreign or domestic?
Minivans or anti-minivan family cars?
8. Explore new technology
If you haven’t purchased a new vehicle in a few years, you might be surprised by how far in-vehicle technology and active and passive safety features have become:
Find out about new safety tech like lane departure warning, bicycle detection, and hill descent assist. See if any of the latest gadgets and luxuries are for you, like steering wheel tablets and automatic massages.
9. Begin to “window shop” and make a list of your top picks
Look online, visit dealerships, and talk to friends and family. The sooner you see and get real experiences or reviews of cars you’re considering, the better.
Call around to dealerships to see if they’ll start bargaining with you before you visit in person. You might find much more flexibility in price with some dealers than others (particularly if you expand your shopping range geographically).
Once you’ve narrowed your options down, make a final list and begin to look at the details, which follow.
10. Figure out the fair market price for each car on your list
Whether you’re shopping used or new, from a dealership or privately, an appraisal tool will help. Try Kelley Blue Book, Edmunds.com, or NADA.
Most people know they shouldn’t pay a dealer’s sticker price, but say one dealership marks up a certain vehicle by $5,000 and the next dealership marks up the same vehicle by just $2,000. They might each negotiate down to $500 off, but you’d be paying substantially more to the first dealer. Instead, arrive at the lot armed with the fair market price and negotiate from that number instead.