100 smart money tips for 2010
Tara Baukus Mello
auto
10 car buying hints for 2010

Car buying is not like buying a television or other household item. There are many different factors to consider, and the sheer purchase price alone makes it worth spending some time researching before you buy. If 2010 will bring you a new set of wheels, then follow these 10 tips to help ensure you buy a car that you are happy driving and that fits your budget.

Tip 1Start by taking a careful look at your budget.

Even if you have a car in mind, determine your budget before venturing onto a dealer's lot. Using the home budget calculator, assess your monthly bills and what you need to save to determine how much car you can afford. Try not spend more than 20 percent of your monthly household income on all the family's cars, including the costs to operate them.

Tip 2Consider the total cost of owning the car.

Don't just look at cars whose monthly payment will max out your budget. Instead when car buying, leave yourself some room to cover the costs of ownership, including insurance, fuel, maintenance and repairs. Factoring 5 percent of your monthly auto budget for ownership costs is a start, according to Edmunds.com research. Once you have narrowed your car choices, look up the ownership costs of those specific models using Edmunds' True Cost To Own tool.

Tip 3Take your time.

For most people, a car is the second most expensive purchase they'll make next to their home, so treat it accordingly. Take your time to figure out what you want instead of making a purchase in just one weekend. Use automaker Web sites and third-party vehicle information sites such as AOL Autos, AutoTrader, Cars.com, Edmunds.com, Kelley Blue Book, and NADAguides.com to do your car-buying research, get pricing information and learn about available inventory in your area. Visit local dealerships only after you've completed the majority of your research and have just a couple of vehicles in mind.

Tip 4Determine your insurance costs before buying.

Auto insurance costs can vary widely from one car model to another, so it's best if you get a good idea of that expense before you buy. Once you've narrowed your choices, call your current agent and ask him for quotes on all the cars you're considering to be sure your estimate is accurate.

 

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Tip 5Shop around for the best interest rate before you visit the dealership.

While automakers will entice you with low interest rates, you likely won't qualify unless you have great credit. And, even if you do qualify, you may be better off taking the cash rebate and getting a loan elsewhere. Use Bankrate's Rate Search tool to see current interest rates and also check with local lenders, including credit unions which are 1 percent to 2 percent lower on average than conventional banks, according to a 2009 survey by DataTrac Corp. Use CUlookup.com to find a credit union you can join. Once you've determined your best interest rate, use Bankrate's Car Rebate vs. Low-Interest Calculator to determine the best deal.

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