Buying a New Car

By John Linden

Buying a new car means different things to different people but almost everybody will agree it’s a high-dollar purchase that requires some research before the buy. In most cases, a new car means buying one right of the lot as the first and only owner of the vehicle. For others, new means new to them although it isn’t necessarily straight-from-the-factory new.

There was a time when used (or pre-owned) cars were generally considered the more economical approach to new car ownership but the 2009 Cash for Clunkers program made some changes still affecting the market today. Officially named the Car Allowance Rebate System (CARS) Act, Cash for Clunkers encouraged car owners to upgrade to a new car that met higher fuel economy standards. Rebates as high as $4,500 were used as incentive to enhance the trade.

It worked. Almost $3 billion in rebates were paid to people buying close to 700,000 new cars during the program’s lifespan. The old cars were not returned to the re-sale market; they were junked.

By removing so many used cars from the market, those still remaining now are valued higher than they were before. The better the condition, the higher the resale value. These higher prices in today’s used-car market compete pretty closely with the cost of a straight-off-the-showroom-floor new car so it may pay off to explore the merits of both - new and used - when shopping for a new car.

The Hunt

The first step in buying a new car is the hunt. This may be the most fun part. What kind, what color, what accessories are all the easy decisions, based more on personal preference and style than on hard-line economics. Comparison shopping is a must.

We all know to kick the tires and check under the hood but most of us don’t know how to interpret what we see when we do those things. Fortunately, there is a wealth of data at our disposal right here on the internet that helps explain the finer points of the hunt and will guide us to make the wisest decision.

These tips, calculators, and worksheets all come from reputable sources that do not sell cars or car-related goods or services. You can trust them because they have nothing to gain from your purchase.

Auto Advice Articles: Tips on Buying a Car with Confidence / USAA

Buying A Car / University of California Berkeley International Office

Buying a Car FAQs / The University of Vermont

Buying a New Car / USA.gov

Buying a New Car brochure (pdf) / Hawaii State Department of Commerce and Consumer Affairs

Can A Hybrid Save Me Money? Comparison Calculator / Fuel Economy / US Department of Energy

Car Smart: Why Consumers Should Read This Guide / Massachusetts Consumers’ Coalition

Cars (pdf) / University of Missouri

Car-Buying Terms Glossary: Making Sense of Dealer-Speak / Car and Driver

Common Car-Buying Mistakes / Consumer Reports

How Do Gasoline & Electric Vehicles Compare? (pdf)

How Should I Go About Buying a Car? / Duke University

Transportation Choices: Tips About Buying a New or Used Car / California Energy Commission Consumer Energy Center

Worksheet for Buying a New Car (pdf) / Federal Trade Commission

The Business

The business part of buying a new car is probably the most intimidating. It’s loaded with terms and details that we don’t often encounter. It’s where the money talk gets serious, too. Negotiating and bargaining with confidence can save money, maybe even thousands of dollars, so the more you know before you begin, the less likely you’ll be to clam up and break out in a stuttering cold sweat in the heat of the moment.

Each state has different rules and regulations for buying cars, registering them, inspecting them, and keeping them legal in every way. Some of these regulations add to the overall cost of buying a new car so please check with the state agencies that regulate the automobile selling industry in your state.

Auto Service Contracts and Warranties / Consumer Information / Federal Trade Commission

Buying Online or at the Dealership / DMV.org

How Much You Pay for A Car Depends On Who You Are / PBS Newshour

New Car Lemon Law Fact Sheet / New York Attorney General’s Office

Race and Gender Discrimination in Bargaining for a New Car (pdf) / American economic Association

Research Vehicle History / National Motor Vehicle Title Information System (NMVTIS)

Vehicle Registration / New Mexico Motor Vehicle Division

VINCheck / National Insurance Crime Bureau

The Ownership

Fortunately, the big bucks are needed at or right after the title to the new car changes hands but car expenses do not stop there. Cars are probably the most expensive item in your household to operate. Maintenance, gas mileage, and commuting conditions are expenses that never go away. Do some research on the ownership aspect of a new car during the hunt stage so there won’t be any unpleasant surprises once a car is yours.

Average Cost of Owning and Operating an Automobile / United States Department of Transportation Bureau of Transportation Statistics

Basic Parts of Auto Insurance / Brigham Young University Marriott School / Personal Finance

Car Maintenance / Edmonds.com

Car Maintenance Cost Analyzer

Foolish Delivery Checklist: The Motley Fool / Stanford University

How Much Does It Cost to Drive? - University of South Florida

How Much Does It REALLY Cost You to Drive? / The True Cost of Driving / Commute Solutions

The Per-Mile Costs of Operating Automobiles and Trucks (pdf) / Minnesota Department of Transportation

There’s almost nothing that feels as good as driving a new car. Keep the good vibes flowing by doing as much research as possible before the buy and you won’t just feel like the king of the road later, you’ll own the road!