How to choose the 'right' car

Updated: August 4, 2013

Consider your real needs

Dream car

When thinking about our car needs, we often think about our 'dream' car or truck. For example, 'a sporty two-door convertible to ride around on a warm weekend'; or 'a big SUV that should have 7,000-pounds of towing capacity in case I buy a boat, low-range 4WD if I go off-roading and lots of room for camping trips'. The reality is that you are probably going to need this type of vehicle maybe just once or twice a year, but you will have to drive it every day, spending a lot of money on gas and maintenance. So, think about your real needs for everyday driving. Write down what you need from your car and what you want your car to have and arrange the items in the order of importance. For example:

1. Must be cheap on gas, because I drive a lot.
2. Must be reliable, because I don't want to spend too much on repairs.
3. It must have good rear seat space to fit a child seat.
4. Must have side airbags and antilock brakes.
5. Must have a cruise control.
6. It's nice if it will look sporty.
7. I'd love to have an auxiliary input for my iPod.


Now it's easy; if good gas mileage is your priority, start with fuel economy ratings (see next paragraph) and make a list of cars that you like that are good on gas. Check the Autotrader and see which of these models are available within your price range and scratch those that aren't. Check reliability ratings of remaining models and scratch off the poorly-rated ones and so on. In the end, you are going to have three or four models left on your list and you are ready to start shopping.
By the way, if one day you really need a big truck to haul something, you can just rent one; it's not that expensive. And if the weather is nice, you can rent a convertible for a weekend too; just book it in advance. If you really need an auxiliary jack for your iPod and the car doesn't have one, you can buy an aftermarket iPod adaptor; it's easy to install.

Compare gas mileage

New or Used

With today's prices at the pump, gasoline is a major expense for all drivers. Before choosing your next car, check its gas mileage and estimated annual fuel costs.
You can do it at FuelEconomy.gov. You can search by class or by model. Along with the city/highway mpg numbers, you can check the estimated annual cost of fuel and whether the car requires a regular or premium gasoline. Here is an example:
Used Honda Civic and used Chevrolet Silverado. These two vehicles are priced within the same range and either one is often recommended as a first car or truck; one because it's cheap on gas and the other one because it's bigger and safer. According to Fueleconomy.gov, the estimated fuel costs for the 2004 Honda Civic is $1,950 per year versus $3,850 per year for the 2004 V6 Chevy Silverado. For three years of driving, you'd pay $5,850 for the Civic versus $11,550 for the Silverado at the pump.
The Fueleconomy.gov website also has Compare Side-by-Side feature where you can compare up to four different cars. Also check our list:
- Top ten used cars/SUVs with good gas mileage »

Research reliability ratings

The reliability is one of the most important factors to consider choosing a used car. Not all cars are built equally well. Some cars are proven to be very reliable; others are known for constant problems. Even within the same make and model, certain model years could have more problems. I did some research and selected a number of resources where you can check reliability ratings of different cars:
Consumer Reports is a one of the best sources for reliability ratings, but to access most of the features on their website, a paid subscription is required. However, you can check a printed copy of the Consumer Reports magazine at your local library.
MSN Autos is also useful when researching used cars. Follow menu 'Car Research', select a car you want and you will see the Reliability Rating on the right. Click it to see common problems.
J.D. Power and Associates - they offer new and used car ratings.
However, be aware, even most reliable model car won't last long if not maintained properly. Check our used car reviews for common problems and reliability issues. Remember, any car or truck is a compromise: if it has a powerful engine, it won't be good on gas or if it's rated high for reliability, it won't be cheap.

Look for a car that will hold its value well

New or Used

Don't pay too much for a used car because when you decide to trade it in or sell it, it will worth a lot less. A perfect range to spend on a used car is $7,000-$13,000. Look for a vehicle that will hold its value better, so you can get something for it when you trade it in or sell it. Here are three real-life examples:

A while back, a friend of mine bought the 8-year old Toyota Corolla (in the photo) for $6,500. After four years of driving, he sold it for $3,500. This means that over four years, the car has lost only $3,000 in its value or $750 per year.
Another person I know bought a 5-year old Mercedes-Benz E-class for $25,000. After driving it for five years, he sold it for $6,500, which means the car has lost $18,500 of its value over five years, or $3,700 per year.

Another friend of mine bought a new Chrysler SUV for $48,000. After seven years, he traded it in for another vehicle. The dealer appraised his SUV's trade-in value at $7,000, so his SUV has lost $41,000 of its value over seven years, which is just over $5,800 a year.

How do you find out whether the car will hold its value well or not? One way is to look up the retail or trade-in value of the current four-year old car of the same model. You can find the US trade-in values at NadaGuides. To find trade-in values in Canada, check CanadianBlackBook.com; follow Black Book Value menu.
Examples of cars that hold their value well: Toyota Matrix, Honda Civic, Toyota Corolla, Acura TSX, Subaru Impreza.

Check safety ratings

There is no such thing as a perfectly safe car. However, some cars can protect you and your passengers better in case of a crash. You can check the crash test ratings for different cars at SaferCar.gov; the cars are rated with a five-star system where five stars is the highest rating and one star is the lowest. When looking at frontal crash ratings, only vehicles from the same weight class can be compared. Another important aspect of safety is the technology that can help you to avoid a crash, such as a Vehicle Stability Control or Antilock Braking System. This page at the Safecar.gov website allows you to check which models offer Electronic Stability Control. You can read more about this at the Insurance Institute for Highway Safety website: Crash avoidance technology.

Research ownership costs

When you look through used car listings, often you can see used luxury cars like Mercedes-Benz or BMW advertised for the same price as a used Honda Civic or Hyundai Elantra. Is a used Mercedes-Benz or BMW a good deal? The advertised prices might be the same, but ownership costs will be much different. You probably already know that upscale cars like Mercedes-Benz, BMW, Volvo, Audi, Volkswagen, Acura and Lexus will cost you more in maintenance, parts and repairs. You will also probably have to pay more for the insurance; cost for fuel may also be different, as some luxury cars require premium gasoline. You can research ownership costs at Edmunds.com although they don't provide data for older cars.

Car comparison tool

New or Used

If you want to decide between a few new and used vehicles, what can really help is a comparison tool where you can see the current prices, specification, gas mileage and warranty side by side. I found the comparison tool at the NadaGuides.com website to be very convenient. It allows you to compare up to four cars side by side, and what's good about this tool, it allows you to compare new cars with used ones.

Environmental impact

All cars with an internal combustion engine produce some amount of emissions as by-products of burning fuel in the engine, or from evaporation of the fuel itself. Modern cars produce a lot less harmful emissions than those from 60's or 70's. However, considering how many cars are on the road today, they are still a major source of air pollution. Different cars have different impacts on the environment; you can compare environmental scores of different cars at EPA's Green Vehicle Guide.

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