Buying a Car

Buying a Car

Before you start shopping, determine what you can afford. Experts suggest all of your monthly payments should be less than 40% of your gross or pretax income.

Do Your Homework

Once you know what you can afford, look for models that match your needs. Three important factors to consider are:

  1. Reliability — Two good places to research a model’s reliability are and Also ask friends and family if they have any personal experience with a particular car you’re investigating.
  2. Safety — To check the safety rating, visit the Insurance Institute for Highway Safety’s web site. Make sure the car has air bags and electronic stability control. (All new cars will.)
  3. Fuel efficiency — Compare the fuel efficiency of models that interest you at the U.S. Department of Energy’s web site.

Before buying any car, be sure to test-drive it. Have a mechanic inspect it if you’re buying a used one. Get a clear title history, too.

In addition to finding out who owned it previously, try to find out how well they took care of it. Ask for maintenance and repair records.

Financing Your Purchase

Vehicles, especially new ones, are expensive items — ones that most people don’t pay for with cash. Of course, loans can cost a lot of money, too. Be sure to consider options beyond what a dealership offers you — particularly an auto loan from your credit union. (Check our current rates.)

Here are a few more things we’ll probably be able to save you money on:

Making the Payments

After closing the deal, you have more than a new car: You have a credit history. Take good care of it by making all your payments on time. If you don’t want the hassle of writing a check every month, sign up for payroll deduction. That way your payments will be deducted from your account automatically.