Perfect Fit

By Tawny Maya McCray

August 21, 2009 4 min read

Buying a car is a huge purchase, probably second only to buying a house. For that reason alone, it's important to know everything you can about what you're looking for in a vehicle in order to make the right decision.

"There's a ton of research you can do online to allow people to see the gamut of vehicles out there -- everything from photos to videos to reviews of every car and pricing," said Jack Nerad, executive editorial director and market analyst for Kelley Blue Book. "Doing a little homework on an expenditure of $20, $30 or $40,000 makes a lot of sense to me."

Jeff Bartlett, online deputy editor for autos at Consumer Reports, said that while looking at some of these practical factors aren't particularly fun and exciting when you're fantasizing about the car you want, they are important to narrowing down the barrage of cars out there and coming up with a manageable list.

"By looking at those factors first, it will steer you toward the better vehicle and help you to focus on the quality of the vehicle rather than just how sensational the deal may be," Bartlett said. "From the shopper's standpoint, it's probably best to assume you'll pretty much get a good deal on just about everything. It's more important to get a really great car than get a great deal on a bad car."

Begin your search online. For example, the Kelley Blue Book site at kbb.com lets you look for your perfect car by price, miles per gallon and engine size and browse through photos, videos, reviews, incentives and rebates. The Consumer Reports site, consumerreports.org, offers reviews, ratings, crash tests, reliability forecasts and pricing guidelines for new and used cars.

Bartlett said that when you research the cost of cars, make sure you understand not only what the retail price is, but also what the dealer cost is. You can do that by looking at what the dealer holdback is, as well as the available rebates and incentives.

"That includes not only the advertised rebates that are available for the customer, but also the hidden ones that the dealer is going to get," he said. "You can save a little bit more money if you have all the numbers to work with, because then you can negotiate."

Bartlett added that it's also crucial to test drive a few different vehicles before making your final decision, because ultimately all the research in the world won't matter if you're just not comfortable in the car. It also ensures that you're not making a decision on day one and gives you more time to think and do more research on it, he said.

When it comes to buying versus leasing, Nerad said buying gives you more options of what you can do with the car -- in terms of selling it, keeping it and the amount of mileage you can put on it. On the other hand, he said, if you're the type of person who turns over your car every two or three years and doesn't like dealing with the dealer experience, then leasing can offer a simpler solution.

Bartlett, however, warned that leasing could prove more costly than buying. Since cars depreciate the most in their first and second years, you end up paying for the car when it's most expensive. Buying is cheaper, he said, because while it depreciates most at first, over time the depreciation slows down -- so the longer you hold on to the car, the less it would cost you to own.

Both Nerad and Bartlett agreed that buying a new car versus a used car is generally cheaper, because the annual percentage rate is usually lower.

In the end, Nerad said, just buy what you like.

"These days most cars will give you very good service and will be quite reliable and won't leave you stranded by the side of the road," he said. "Pick something you're excited about. It is a big expenditure, so why not be thrilled with it as opposed to being so-so about it?"

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