A car is one of the big purchases you will make. Before you get your heart set on a specific model, you need to know what you can afford.

Often when people go shopping for a car, they begin by looking at dealer or manufacturer Web sites to see what type they’d like to buy. Before that, though, shoppers should figure out what their needs are and how much they can afford to spend, and decide whether they should buy or lease or choose a used car instead of a new one. This chapter will help you make those decisions.

What can you expect to learn from this chapter:

  • Begin with a budget

    If you don’t have a family budget, you should create one to see how much you can spend on a car.

  • Check your credit first

    By checking your credit score months before you buy, you can be sure you’ll get the best interest rate on a loan.

  • Buying new vs. used

    Weigh the benefits and drawbacks when trying to decide whether you should get a new car or a used one.

  • Buying vs. leasing

    Five questions to ask yourself to see if you’re the right kind of person for a lease or if buying would be better.

  • How much can you afford?

    Experts say you should spend only 20 percent of your monthly budget on automobiles. Our calculator can help you determine how much you can afford.

  • Finding the best car for you

    Consider your lifestyle and the needs of your family before you choose a car. Here are 12 questions to help you make the right choice.