What is your budget and what are your needs?
Calculate your budget
The first step is to establish the budget for this transaction. Unless you have enough money to pay cash (the most economic option), you will no doubt need a loan.
How much wiggle room do you have when it comes to payments?
Can you spend $300 per month? Or is $250 more realistic? Work out the amount you can afford as precisely as possible.
When actually shopping for your car, though, don’t reveal this number to the salesperson. Let them offer a monthly payment, and make sure you understand how they’ve calculated it (remember, numbers can be made to say just about anything).
Keep your other expenses in mind
Total up the expenses that will be added once you have bought or leased:
Taxes and fees
Finance charges
Also, keep in mind your running costs:
Parking and, if applicable, tolls
These expenses can easily amount to a third or even half the monthly costs of ownership. To have an accurate picture of your budget, include them in your calculations. Use the Driving Costs Calculator to help you build a better understanding of all the ongoing costs of owning a vehicle.
Key No. 1
Once you have a budget, keep in mind what you’re prepared to pay monthly (even when the deals are tempting!). Keep that budget in mind when choosing a car that suits your needs and lifestyle.
Decide on your needs
You know what your budget is. Great. Now, think about the type of car that you need.
To ask yourself the right questions, here are a few points to consider before beginning the search for your future car.
Manual or automatic?
Some people love driving a “stick”; others prefer automatic… Which type of transmission do you prefer?
Each has its advantages and its inconveniences. Will you be in traffic on a daily basis? If so, you should choose an automatic transmission—having to worry about the clutch in the middle of a traffic jam can be frustrating. Another advantage is that the newer automatics use less fuel than manuals.
Still, there is something to be said about driving a good old manual if you like the feel of more spirited driving. As these transmissions are becoming more rare, those who want one should get one now before they disappear altogether!
Front-, rear- or 4-wheel drive?
Since the 1980s, most cars have had front-wheel drive, although some luxury and sports cars, as well as base model pickups, still have their drive wheels at the back. This kind of setup, known as rear-wheel drive, gives better handling and improved cornering. Rear-wheel-drive vehicles are, however, a little harder to handle under winter conditions.
Several vehicles are marketed with an all-wheel-drive (AWD) option, in which all four wheels are drive wheels. Do you live in hilly country or in an area with frequent snowstorms? If so, AWD could be a good choice for you. On the other hand, if you don’t really need it, you might strike this kind of car off your wish list: two-wheel drive costs less in gas, repairs and tires.
Towing and cargo capacity
Let’s say you’re a camping buff or you love the outdoors, or you’ll be hauling all kinds of material, and so you want a vehicle that can tow a trailer.
This means looking at models with enough towing capacity. You need to know this kind of information up front! Not all cars are designed to tow a load.
Towing a load? It’ll cost you
Vehicles designed to tow loads tend to be bigger, use more gas and cost more. To find out the towing capacity of a vehicle you’re interested in, check the owner’s manual or the manufacturer’s website.
Comfort, space and looks
Assess your short- and long-term needs when it comes to comfort, space, looks and storage space.
Consider the following points according to your situation:
Are you tall? If so, you’ll have to forget about certain models that won’t give you enough leg- and/or headroom.
Will you be using your car for work? Think ahead: will you be meeting clients? Will you need to take long trips? The look and comfort of your car will be important from that point of view.
Will you mostly be driving alone? You might choose a smaller, more fuel-efficient car.
Lastly, think about having enough space for things you may haul around from time to time (ski or hockey equipment… or your Golden Retriever).