5 Things to Think About When Buying a New Car

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Buying a new car

Spring is the time of year when many people decide it’s time to buy a new car. But there’s a lot of research that should be done before visiting a car lot and ultimately deciding to buy a new car.

Here are a few things that should be considered before buying a new car.

New or Used


Generally speaking, buying a used car is usually a better deal for most people’s budgets. Used cars don’t depreciate as quickly, and used cars are also more likely to fit into a tight budget.

One of the common arguments for buying a brand new car is that it will still be under manufacturer warranty for several years. However if the used car is a new enough model the manufacturer’s warranty may still be intact. If not, most car dealers these days offer extended warranties on used cards for an additional cost.

Auto Insurance


In most places, auto insurance is required by law. But that doesn’t mean that prices shouldn’t be compared from multiple companies to find the best deal possible.

Comparing auto insurance rates is a great way to save money as there can be significant differences from provider to provider. Investigating rates at three or four insurance companies is a good way to make sure policies aren’t overpriced.

Kelley Blue Book suggests considering how car insurance rates will change before getting a new vehicle. Most of the time newer cars will be more expensive to insure.

Monthly Payment and Total Cost


The monthly payment for a new car isn’t the only figure that matters when car shopping. Having a total budget in place before visiting a car dealership is a good idea. Salespeople should never be in charge of deciding what a comfortable monthly payment is for buyers. Of course they will always suggest something at the top end of the budget.

The total cost of the car a buyer is considering is also important. Insurance, property taxes, and interest all add cost that should be taken into account when calculating the total amount needed for the car purchase.

Gas and Maintenance


Depending on the type of car a buyer is considering, and the condition of the car they are trading in or selling, gas and maintenance costs can have a huge influence on how much it’s appropriate to spend.

For instance, if a buyer is going from a car to an SUV the gas costs will likely be much higher. But if a buyer is going from an old “beater” car to a gently used car, gas and maintenance costs will likely be much lower.

Find Financing Elsewhere


Dealer financing isn’t always the best choice for car buyers. Instead, buyers should shop around to find the best interest rate before even setting foot on a car lot. Local banks and credit unions can usually offer competitive interest rates that might be better than what buyers can obtain from the car dealers.

There are lots of things to consider before buying a new car. Doing research ahead of time before visiting a car dealership helps to ensure that you save as much money as possible with your car purchase.



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I'm the founder of Frugal Rules, a Dad, husband and veteran of the financial services industry. I'm passionate about helping people learn from my mistakes so that they can enjoy the freedom that comes from living frugally. I'm also a freelance writer, and regularly contribute to GoBankingRates, Investopedia, Lending Tree and more.

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