| The biggest question in the car buying process is | | | | several auto review sites online. You can also use the |
| whether to buy new or used. | | | | Internet to check everything from the performance |
| The second biggest question is what make and | | | | ratings to the safety records of the vehicles you're |
| model to purchase. | | | | interested in. |
| The third most important question is where to get | | | | Be sure to test drive any vehicle you are considering |
| your financing. | | | | under varied road conditions. If the vehicle is used, |
| #1 New or Used | | | | ask to see all maintenance records and check its |
| The average new car costs more than double what | | | | history on CarFax. And don't forget to have your |
| the average used car does. (The Kelley Blue Book | | | | mechanic give it a thorough inspection. If you are |
| pegs the average new car price in 2005 at $26,100 | | | | buying new, try to pay as close to the factory |
| and the average used car price at $13,000). It's not | | | | invoice price as possible. You can look up factory |
| surprising, then, that used cars outsell new cars | | | | invoice pricing online. |
| three-to-one. | | | | #3 Car Financing |
| New car loan rates are about the same as used car | | | | Many experts recommend getting your financing |
| loan rates. The major difference between the two is | | | | before you start car shopping. This puts you in a |
| the length of the loan. Most used car loans are for no | | | | better bargaining position because the dealer knows |
| more than 36 months whereas new car loans can be | | | | money won't be an issue. (They also won't have the |
| 60 or even 72 months long. | | | | chance to run you through their finance department, |
| Remember to take depreciation into account. | | | | which is a good thing for you!) |
| Depreciation is the difference between the | | | | Of the 60 million new and used cars sold annually in |
| Manufacturer's Suggested Retail Price when you | | | | the U.S., about 27.5 million are financed by subprime |
| bought the vehicle and what it's worth now. Some | | | | loans to buyers with less than perfect credit. If you |
| new cars lose as much as one-third of their value | | | | have bad credit-a FICO score of 620 or lower-you |
| within a year. On most vehicles, depreciation settles | | | | will need one of these loans. |
| down to about seven-to-ten percent per year after | | | | You will not qualify for the new car offers advertised |
| the first three years. | | | | on TV, like the "0 Down," "O Interest" or "Low APR" |
| Which brings us to . . . | | | | deals. However, you can still get a good deal on a |
| #2 Make and Model | | | | bad credit car loan from Internet lenders like Auto |
| One way to slow depreciation is to buy a make and | | | | Loans In Seconds. Their free online application |
| model with a prestigious nameplate. Models that | | | | process lets you know exactly how much you can |
| depreciate faster than most include: Jeep Grand | | | | borrow, and at what rate. |
| Cherokee, Ford Explorer, Ford Taurus and Lincoln | | | | "Consumers should shop around for financing with the |
| Continental. Cars that hold their resale value longer | | | | same vigor that they shop around for a car," says |
| include the more expensive makes like Lexus, | | | | Jack Gillis, public affairs director for the Consumer |
| Mercedes-Benz and BMW. | | | | Federation of America. "One or two percent can |
| To learn more about which makes and models offer | | | | erode all the money you negotiate in a good price. |
| the best value in today's market, you can research | | | | |