Cars – Review

The following steps are devoted to helping you select, price, locate and test-drive the vehicle that is best for you. After reading and completing these steps, you will be ready to move on to the 10 Steps articles to buying a new car, buying a used car, or leasing a new car.

Step 1: What kind of car do you need?
If you examine your needs rather than wants, you will quickly discover what the right car is for you. Take a moment to think about what you use your car for. How many people do you need to transport? What type of driving do you do most often? How long is your commute? Is it important that your next vehicle get good gas mileage?

In too many cases people choose a car for its styling or because it is a trendy favorite. If you do, you might either exceed your budget or have to go car shopping again soon. Let your needs, not your wants, drive your decision. Here are a few other questions to keep in mind when you begin your car-buying process:

• Do you want a manual or automatic transmission?
• Do you really need four-wheel drive? Or all-wheel drive?
• What safety features do you want?
• Do you require a lot of cargo capacity?
• Will you be doing any towing?
• Do you have a bad back and need flexible seating positions?
• Will the car easily fit in your garage or parking space?

Step 2: How much can you afford?
Regardless of whether you decide to buy or lease your next car, establishing a realistic monthly payment that fits into your budget is crucial. How much should this be? A rule of thumb is your total monthly car payments shouldn’t exceed 20 percent of your monthly take-home pay.

Check the Edmunds.com Affordability Calculator to help you estimate what your monthly payment will be based on purchase price, down payment, interest rate and length of loan. Run the numbers now and print out the results. It will not only show you what you can afford, it will also help you control the numbers when you negotiate with a car salesman, find out the best deals at these semi truck auctions.

Step 3: Should you lease or buy your next car?
A lease requires little or no money up front and offers lower monthly payments. But when the lease ends, you are left without a car and will need to replace it. Buying a car is more expensive initially and the monthly payments are higher. But at the end of the loan, you will own a car you can still drive or sell.

Advantages of Leasing

• You can drive a more expensive car for less money.
• You can drive a new car every few years.
• There are no trade-in hassles at the end of the lease.

Advantages of Buying

• When interest rates are low, it makes more financial sense to own a car rather than lease it.
• There are no unexpected mileage penalties for increased driving.
• There’s more flexibility–you can sell the car whenever you want.

If you are still unsure whether to lease or buy, try letting the numbers help you make the right decision. Go to Edmunds Purchase Calculators to calculate your monthly auto loan payment vs. your monthly lease payment.