6 Things to Do Before You Buy Your Next Car

Now that my son is 14 and getting ready for a driver's permit, I've been thinking quite a bit about buying a car. (Yes, you read that right. In Idaho, you are eligible for a permit at 14 and a license at 15.)

It's a few years since I've bought a car; I tend to buy something late model that I like and then drive it for as long as possible.

As I get ready to move forward with a vehicle for my son, here's how I'm preparing to make the decision:

1. Figure Out What You Need

It's not always about what you want, but what you need. My son doesn't need something nice. What he needs is something that will get him from point A to point B around town. At his age, he doesn't need something that will help him go on an epic road trip. I just want him to get himself to fencing practice and (eventually) work.

2. Acknowledge What's Practical

This is about tempering expectations. When I bought a Saturn wagon 14 years ago, what I really wanted was a Subaru. It just wasn't practical at that time. The car didn't fit in the budget and the Subarus that did were old with high mileage. Before you buy, be realistic about your situation. I got the car I wanted eventually, but only after nearly 10 years of driving a car I didn't really care to own.

3. Check Into Your Credit

Do you know where you stand with your financial reputation? You'll get better loan terms and be in a better position to negotiate if you have good credit. Look at your credit report to see if there are errors that could drag you down. Also, have a look at your consumer credit scores from free sites like Credit Karma, Credit Sesame, and Quizzle. While they aren't "official," they can give you a good idea of where you stand.

4. Know Your Budget

You can use car loan calculators to figure out monthly payments versus total loan amounts ahead of time. Know your budget, and be prepared to stand firm. Once you get to the dealer, there's a good chance they will try to nudge you a bit by focusing on a monthly payment and convincing you to get a 60-month or 72-month loan. Figure out a total price you want to pay for the car, and stick to that.

5. Research the Options

Do your homework. I'm already pretty certain my son is getting an older Toyota or Honda, or maybe a slightly newer Ford Focus. It's about low cost and a degree of reliability. I'd also be willing to get a Focus because there are a lot of good places around where I live that work on Fords, and because it's easy and (relatively) inexpensive to find parts. Figure out what works best in terms of safety, reliability, fuel economy, and other items.

Consider Certified Pre-Owned or a lease return if you'd like a newer but used car. These are lower cost, but still come with warranties and other perks.

6. Look for Incentives and Sales

I bought my Subaru during a year-end clearance when there were dealer and manufacturer incentives. I got great financing because of my good credit (1.9% APR) and incentives that meant my new car cost less than an equivalent used car. Check to see what's available before you get out there, then use that information to negotiate the best terms.