In normal years, we would tell you that the best time to buy a car is when sales are slow at the end of the month, end or the year, or during vacation season. We would tell you that you might still have to negotiate your prices because dealers aren’t just going to give you a good deal because they like you.

BUT……..things are much different now. Sales have been slow for over a year and are still slow right now. As a result, we are now seeing some of the biggest and best car incentives on new cars that we’ve seen in years. Nearly every car manufacturer is now offering a combination of large factory-to-customer rebates, low-interest loan deals, 0% APR loans (even on long 72 month loans), special lease deals, free maintenance, and “secret” factory-to-dealer rebates that dealers usually give to customers.

Why has 2010 become such a good time to buy a car?

For a number of reasons.

First, the economy seems to be improving, if every so slowly, and car makers and dealers are anxious to give things a little push. They are offering attractive incentives as a way of convincing potential buyers to take action.

Second, even though there are people buying new cars, the market is smaller than a few years ago. This means there’s fewer cars to be sold and the competition among dealers and car makers is tremendous — to the benefit of automobile consumers.

This is a good time to buy because many of the deals are the about as good as they can possibly be. You can’t get lower than zero percent interest on a loan. You can’t get lower than a manufacturer’s cost to build a car and expect them to stay in business. You can’t much better on special car lease deals that give you a deeply discounted price, combined with a low money factor and high residual. Some even kick in free scheduled maintenance for a couple of years.

Another factor creating the outstanding car-buying opportunities right now is the “Toyota Situation.” Toyota’s unfortunate highly-publicized problems have caused a big slowdown in Toyota car sales. Most other car makers have tried to capitalize on the situation by offering some very attractive incentives. It’s like a feeding frenzy. Now Totoya, who is solving their problems, is offering some of the best incentives in their entire history in attempting to restore customer confidence and recover sales.

If you are looking for 0% APR loan deals, nearly every manufacturer has them on at least some of their models and styles. Even if 0% is not available, other very low-interest loans are being offered.  Furthermore, the deals are being offered even on long-term loans, which has been rare until now.

If you’re looking for great lease deals, Honda and Toyota come to mind. In fact, nearly all non-American brands have special car lease deals now. American brands (Chrysler, Ford, GM) haven’t quite come back to leasing after losing so much money on leases in the last few years.

Big rebates, however, are available on many brands, including American brands, and especially on leftover 2009 vehicles. Chrysler, Ford, and GM rebates are very attractive, as are those from Hyundai/Kia, Mazda, Nissan, and Mitsubishi.

So if you are in the market for a new car, NOW is a good time to buy. It might get a little better later in the year — and maybe not.

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First time car buyers have a choice of buying a brand new car, or buying a used car. Which is better?

There are advantages and disadvantages to either choice. Most people would rather have a brand new car with its new-car smell and latest style, but there are reasons that a new car might not be the best choice. Let’s take a look at the pros and cons of buying new and buying used.

Advantages of Buying New

• You get a brand new car with new-car feel and smell
• You get the latest style and technology
• You get the latest safety equipment
• You get a full manufacturer’s warranty
• You get Lemon Law protection
• You get lowest loan interest rates, if you qualify
• You get the option to lease
• You may get special manufacturer-sponsored pricing and financing

Disadvantages of Buying New

• Value of a new car depreciates rapidly
• Insurance rates may be higher than used
• Taxes may be higher

Advantages of Buying Used

• You avoid the high first-year depreciation of value
• If you buy almost-new, you may get same styling and technology as new car, at a lower price
• You get price flexibility by choosing between different model years, mileage, and condition
• You may buy “certified” vehicles with inspection and warranty – at higher cost
• You get lower insurance costs than same new model
• You get lower sales tax and personal property tax

Disadvantages of Buying Used

• You buy “as-is” unless some manufacturer warranty remains
• Lemon laws don’t apply to used cars
• You may be buying someone else’s problem, unless you have your vehicle inspected
• You risk buying a wrecked or salvage vehicle, unless you run a CARFAX Vehicle History Report
• You typically don’t have a lease option
• You pay higher interest rates
• You may get fewer safety features

 Summary

To summarize, buying a used car can be a better value for your money but it comes with higher risks.

If you are looking for cheap used cars, read the article Finding Cheap Cars for suggestions on where and how to find them.

Find already-discounted used cars at dealers in your area at UsedCars.com, the largest online used car source.

For online pre-discounted prices on new cars, see Yahoo! Autos . Price quotes are free and easy. Get multiple quotes so that you can compare deals.

Any used car purchase should include an extensive test drive, an inspeciton by a qualified mechanic, and a CARFAX Vehicle History Report. Also consider buying an extended warranty.

If you’re considering an almost-new vehicle, make sure you can’t get the same vehicle, new, at about the same price, which can happen if the manufacturer is offering special promotional deals. See Best Car Deals for cars that currently have special incentives, rebates, and low-interest loans.

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Until relatively recent times, it was standard for car dealers and finance companies to require at least 20% down payment on the purchase of a car. It was for a good reason.

Because cars depreciate in value from the moment they are driven off a dealer’s lot, a down payment helps offset that rapid decrease in value, which may keep the loan from becoming “upside down.”  It also protects the loan company or bank because, if they have to repossess the vehicle, they have a smaller risk of losing money.

Things are different now
Auto manufacturers and dealers are now very competitive and business must be fought for. They are willing to take risks that were unheard of just a few years ago. In many cases, down payment requirements have been reduced or eliminated altogether, primarily for customers with good credit.

Even if you have good credit, accepting a “no down payment” deal is not wise. Because your vehicle will depreciate in value faster than your monthly payments pay down your loan, you will be upside down for most of your loan term.

So, what is the problem with being upside down?
First, if you decide to sell or trade your vehicle before your loan is paid off, or nearly paid off, you’ll get a nasty surprise. You’ll find that you still owe more on your loan than your vehicle is worth. Maybe thousands of dollars more. You’ll have to find the extra money to pay off your loan.

Second, if your car is stolen or totaled in an accident, your insurance pays only what the car is worth, not what you still owe on your loan, which again, could be thousands of dollars difference. In order to pay off your loan after the accident, you must come up with the additional cash on your own.

How much down payment?
A down payment not only helps you avoid the problems of being upside down, but it also serves to lower your monthly payment. The amount by which it reduces your payment depends on the amount of the loan, the amount of the down payment, the length (term) of the loan, and the interest rate. You can use an auto loan calculator to play around with the numbers to find out the effect of different down payment amounts.

A good rule of thumb is 20% for a down payment. You can take advantage of manufacturers’ rebates, which can be used as a down payment. If you can’t do 20 percent,  do the best you can.

In some cases, especially if you have poor credit, the bank or finance company will dictate how much down payment you must make to get a car loan from them. It’s usually not negotiable. If it’s more than you can pay, try other banks, credit unions, or loan companies.

If you have poor credit, you might consider looking for your car at a dealer such as Drivetime.com, who specializes in working with buyers who have less-than-perfect credit. They have dealerships all over the country.

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You may still be able to buy another car if you are upside down on your previous loan.

There are two ways to go about it.

One way to buy with an upside down loan
You could sell your old car but you will have to add extra cash to fully pay off your old loan. You’ll need to pay off your loan so that you can give a clear title to your buyer. However, coming up with extra cash might be a problem, especially if you are upside down by a large amount. For many people, this solution is not possible.

Let’s look at some other ways.

Another way to buy if you are upside down
You can trade your old car at a dealer and let the dealer pay off the old loan. Sounds easy, but there’s a catch. If your old car is not worth as much as the amount remaining on your old loan, the dealer takes the difference and adds it to the price of your new car. If you are upside down by a large amount, this can significantly raise the cost of your new car. In some cases, a dealer will not allow the entire amount to be rolled into a new loan, which means you must come up with some cash as a down payment.

When you roll part of an old loan into a new loan, it usually puts you right back into an upside down situation, which is usually worse than your old situation. It is a vicious cycle that you would be best to avoid.

The best way to get out of an upside down loan is to simply keep your old car, keep making payments, until you are no longer upside down. Then, you have the option to do anything you want.

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Here’s how to determine a fair price for brand new cars (see below for used-car pricing).

All new cars have a window sticker that displays the manufacturer’s suggested retail price (MSRP). It may also include destination charges, dealer-installed option prices, and other miscellaneous charges. The total of these charges is the price you would pay for that vehicle, less sales tax, without any discounts or rebates.

All these charges but destination charge can be negotiated. Manaufacturers charge dealers this fee for vehicle delivery, and dealers simply pass it along to customers without markup. It cannot be eliminated from the cost of a car.

Price can be negotiated for most vehicles. Unless the vehicle is a hot seller and in short demand, it’s usually possible to get dealers to discount the MSRP. But, how much? What’s the best price I can expect?

Here’s your strategy for negotiating price.

1. Get online price quotes

Use Internet car buying/pricing services to get price quotes. The quotes are free and you are not obligated in any way to accept them. We recommend you get quotes from multiple services so that you’ll have a number of prices to compare. The best sources for free quotes are:

• Yahoo! Autos
• InvoiceDealers
• Edmunds.com

The prices come from dealers in your area. Even though the prices are discounted, you may be able to do better if you are a good negotiator.

2. Learn about rebates and incentives

Visit Best Car Deals for information and advice about current car incentives, rebates, lease deals, and low interest loans, including 0% APR loan deals.

Also go back to Edmunds.com (see link above) and click on the New Cars section ”Rebates and Incentives” link. You’ll be shown the current incentive programs, if any, for the vehicle you’re interested in. Any price quotes you receive should already include any Customer Cash-Back Incentives, but you should verify this to make sure. If there are Dealer Marketing Support incentives, dealers are not required to share that money with customers, but many do.

3. Get dealer invoice prices

Invoice price is the wholesale price that a dealer is charged for a vehicle by the manufacturer. Dealers make their profit by selling at a margin over invoice price. Essentially, the best deal you should expect to get on a car purchase is something above invoice price, but less than MSRP, allowing the dealer to make some profit, which is needed to stay in business.

Get invoice prices for any vehicle make and model at Edmunds (see link above). It’s free.  Also check Edmunds’  TMV (True Market Value) price for your vehicle. It’s their best estimate of how much other people are actually paying for that car.

It is possible under certain conditions that you may be able to buy for less than invoice price. 

How so?

Dealers get certain bonuses and holdback fees from the manufacturer when vehicles are sold, especially when sales goals are reached. This reduces the actual cost of a vehicle to the dealer. Furthermore, any factory-to-dealer cash-back rebates (Marketing Support, mentioned above) also serve to reduce cost. If a dealer is willing to share some or all of these cost reductions with customers, your purchase price can actually fall below invoice price.

How much over invoice?

Here’s a good rule of thumb: On cars whose MSRP is $20,000 or less, offer $500 over invoice. For cars with MSRP of $20,000 to $30,000, offer $1000 over invoice. And for cars with MSRP over $30,000, offer $2000 over invoice. This assumes the dealer is getting no rebates or marketing support from his manufacturer.

These are only suggestions. If the car you want is in short supply due to heavy demand, you might not be able to get much of a discount at all. If it is a slow seller at the end of the model year when a dealer has plenty of inventory, you may be able to do better than invoice price, assuming there are manufacturer incentives. 

What to Pay for Used Cars — What’s a Good Price?

Used cars can vary in price depending on year model, mileage, and condition.

The best way to determine a fair price for a used car is to check with one or more used-car pricing guides such as Kelley Blue Book (www.kbb.com), NADA Guides (www.nadaguides.com), Edmunds (www.edmunds.com). Sellers generally use these guides to set their asking prices.

Private sellers often price their cars too high, allowing some room to negotiate with potential buyers.

Don’t fall into the trap of negotiating a price down, only to find out you still paid too much. For example, a dealer could set an asking price of $8000 on a car that worth only $6000. When a buyer comes in and talks the price down to $7000, he may think he’s gotten a bargain. However, the dealer made $1000 more than he should on the sale — and the buyer paid $1000 too much.

Dealer prices are generally higher than if a car is purchased from an individual.  However, UsedCars.com lists cars at local dealers at already-discounted prices. You can get free no-obligation price quotes online, which saves a lot of time when price shopping.

If you prefer to buy your car from an individual private seller, you can find hundreds for sale on the eBay Motors web site.

Prices are almost always negotiable. Dealers and individual sellers actually expect buyers to negotiate and set prices accordingly. Asking prices are generally about 10%-20% higher than sellers are willing to sell for. Dealers typically make more profit per-car on used cars than on brand new cars.

If a car is being advertised for an unusually low price, it’s probably for a reason. The car may have problems that the seller may not mention unless you ask. Beware of bargain prices unless you understand the reason.

Used car prices can also vary by area of the country. Convertibles, for example, are more expensive in sunny Florida than in chilly Vermont. Four-wheel-drive vehicles are in greater demand, and more expensive, in states with bad winters. Small compact cars are popular in college towns. Trucks are more in-demand in rural areas.

Use Kelley Blue Book and NADA Guides to check a used car you think you want to buy. Then have a mechanic check it over for problems. Any problems found, if you still want to buy the car, should be used to negotiate the selling price down further.

Also get a CarFax (www.carfax.com) vehicle history report to find out if the car has ever been seriously wrecked or totaled.

Beware of buying used cars on automobile clasified ad sites such as Craigslist and Autotrader, or even from newspaper classifieds web sites. Read about a common car sales scam in this article.

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Here is how a car trade works. Car dealers buy your old car from you and give you credit toward the price of a new car. The trade-in credit is like a down payment and reduces the price of your new car, making your monthly payments smaller. The dealer then puts your old car on his used-car lot to sell, or he sends it to a dealer car auction where another dealer will buy it to put on his own used-car lot.

Dealers make a lot of profit on selling used cars they’ve taken as trade-in. They pay the trading customer a low wholesale price, and sell the car for a higher retail price. That’s how they make their money and stay in business.

It is to a dealer’s advantage to pay as little as possible to the trading customer. Therefore, smart customers will have already done research to determine the fair wholesale value of their trade-in vehicle.

Since dealers only pay wholesale value for trade vehicles, customers can make more money by selling the vehicle themselves, rather than trading it, although it’s more work.  The money from the sale can then be used as a down payment on a new vehicle, reducing payments even more than if they had traded. Smart sellers will have done their research to know the fair retail value of their car.

Where to find trade-in values and retail values? Online, you can use Kelley Blue Book as a good source of average car values. Just keep in mind that used car trade-in values are not absolute and can vary widely between dealers, different parts of the country, and a dealer’s interest in the vehicle. The values of used cars changes often, usually faster than any value guide can keep up.

What if you still owe money on your trade vehicle? Can you still trade it?

Yes, but watch out. If your loan payoff is less than your car is worth as a trade-in, the dealer will take your car, pay off your loan balance, and apply the remainder as a credit toward your new car. This remainder is your positive trade equity.

However, if you still owe more money than your car is worth as a trade-in, you are “upside down” and have negative trade equity. Although some dealers may not explain it to you, he’ll take your car, pay off your loan, and will add the negative equity back into the price of your new car, making it more expensive and making for higher payments, not lower payments. It’s called “rolling” part of your old loan into your new loan. It’s like you’ll be paying off two loans at once. Rolling over negative equity from an old car loan is almost guaranteed to put you into an immediate upside down situation with your new car.

Sometimes, if you have too much negative equity in an old loan, you may find it difficult to get a new loan.  Banks and loan companies don’t like to loan you more money than a car is worth. The only solution is to make a cash down payment to offset some or all of the negative equity.

The other part of getting a good deal with a trade-in is getting  a discounted price on the new car you are buying. Do your homework and get some online price quotes from services such as Yahoo! Autos . The quotes are easy and quick to get, so it pays to get multiple quotes and compare them for the best deals.

Don’t let a dealer tell you he’s giving you more than your old car is worth in a trade because you’re probably paying too much for your new car. The best deals come from getting a fair trade-in price on your old car along with a fair price on your new car.

The car trade-in process is usually simple and uncomplicated, but it can get tricky when you still owe money on your old car — especially if you owe more than the car is worth.

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If you’ve decided that your first car will be a brand new car, there are things you need to know about the buying and financing process that makes it different from buying a used car.

New cars – only from dealers
All new cars must  be purchased from state-licensed and manufacturer-authorized new-car dealers. It’s the law. It’s the only way you can buy a new car.

If a car has never been titled or registered, it’s considered to be a new car. Even if you initiate your purchase through an Internet car buying service, or through a buying service at warehouse stores such as Sam’s Club, the car actually comes from a local new-car dealer.

New car pricing
New cars always have a sticker in the window (it’s the law) showing the particulars about the vehicle, including estimated gas mileage, options, features, and MSRP (Manufacturer’s Suggested Retail Price).

MSRP is the “retail” price that is almost always discounted, except for vehicles in short supply and high demand. Very few car buyers pay full retail price. New cars frequently have manufacturer-sponsored discounts, rebates and low-interest financing deals.  These are called incentives. You can get online price quotes from services such as Yahoo! Autos . These prices are already discounted by local dealers and contain any current incentives.

Then there is “invoice price” which is the wholesale price dealers pay, and which you should know when buying a new car. See What to Pay for Your New Car for more details.

The new-car buying  process
After deciding on the new car you want, you’ll settle on a price with a dealer salesperson or sales manager. You’ll sign a purchase agreement that specifies the price, other costs, fees, and taxes. If you have a trade-in vehicle, the agreement will show the trade credit you’re receiving. If you’re still paying off your loan on the old vehicle, your agreement form will show that amount as well (see Trade-in Process – How It Works). You will also sign an odometer statement certifying that the displayed mileage on your old car is correct and that you haven’t tampered with the odometer.

About your credit – it is important
Dealers often check customers’ credit rating to weed out those who can’t afford to buy or lease. But it’s the finance company who will do a more thorough credit check and make the final decision on your loan or lease approval. If you don’t know your credit score, get it at MyFico.com.

The F&I guy
You’ll visit the dealer’s Finance and Insurance (F&I) manager’s office where you’ll finalize your purchase. The F&I manager is responsible not only for getting your paperwork done but to also try to sell you on extended warranties, service plans, paint sealant, fabric protectant, window etchings, security systems, credit insurance, disability insurance, and a host of other products or services that make the dealer more profit. Most such add-on products and services should be avoided.

Buying with a loan
If you’re buying with a loan, the agreement will show your loan terms, down payment, interest rate, monthly payment amount, and total costs. You may also sign a bailment agreement that essentially says that the dealer will arrange your loan financing for you with a finance company or bank of his choosing, and that if the finance company won’t approve your loan, that you must return your vehicle or arrange other terms.

Get auto insurance
Arrange with an insurance company before you buy. Then on the day you buy, call the insuance company and give them the vehicle  information they need to complete your policy. If you don’t yet have insurance, see the article, How to Buy Car Insurance.

The paperwork
In most states, you’ll also be asked for proof of insurance and supply a photo ID. You might be asked to complete a registration and tag application form as well. State and local laws may require you to sign other forms that are unique to your area.

Out the door
You’ll write a check for your down payment, taxes, and other fees that are required to paid up-front. You’ll turn over keys to your trade vehicle. You’ll probably be given a brief lesson in operating your vehicle, an explanation of the dealer’s service facilities, a set of owner’s manuals, and your keys. The salesperson will also explain how you’ll be receiving a satisfaction survey from the car manufacturer, and that it’s important that you complete and return it – with a perfect score, or course, for the dealership and salesperson.

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Expressed another way, the question is this: Is it smarter, more practical, and more economical for me to keep and fix my old car than to buy another car, new or used?

This is always a tough one to answer. Generally, it’s going to be better to fix up an old car than buy a new car every five years or so.

However, the real answer depends on your particular circumstances. Here are some tips that will help you make a decision.

How old is your vehicle?

Older, high-mileage vehicles are more likely than newer vehicles to have problems. There are exceptions, of course. Older vehicles also tend to have more serious problems, such as engine and transmission failures, that are expensive to repair.

Is your old car breaking down frequently?

If your car is generally unreliable and is causing you inconvenience and unexpected costs, you may want a newer car that is more dependable and predictable. If your car has a long history of problems, it is not likely to end soon. You may find greater peace-of-mind and fewer suprise repair expenses with another car.

Does your old car need repairs now?

If so, how much is it going to cost to make the repairs? Will the repairs really fix the problems, or will they just temporarily patch the problems? Is it likely that these will be the only repairs needed for a while? Can you afford the cost? If you were to sell or trade the vehicle, could you recover the cost?

How safe is your old car?

Older cars have fewer safety features than new cars. There’s always the chance that an older car’s safety equipment doesn’t work properly. Do the airbags still work? Is the ABS still protecting you? Has your car been structurally damaged in an accident? A newer car may bring fewer worries about safety.

Can you afford to buy a newer vehicle?

Can you pay cash? Would you need a loan? Do you want a new loan and monthly payments? How much can you afford in monthly payments? Can you afford to buy a car that is substantially newer and better than your old car? Can you afford possible higher insurance rates and taxes? Does your old car have enough resale or trade value to help with the cost of a newer car?

Do you want a new vehicle?

Most people would answer yes to this question — but many don’t want new car payments, or a depleted savings account either. The stronger “want” wins. If you decide you need (want) a brand new car, be sure to check with Yahoo! Autos for pre-discounted prices at local dealers.

What are you really looking for?

What’s most important to you in making your fix-versus-buy decision?  Lowest cost solution? Easiest solution? More dependable transportation? More peace-of-mind? Fewer surprise breakdowns and costs? Do you have an emotional attachment to the old car? Or are you simply trying to squeeze the last remaining value out of your old car before discarding it?

Reasons to keep and fix your old car

You are frugal and don’t like being wasteful

Your car is less than 10 years old and has less than 150,000 miles

Your car has only minor problems that are not expensive to repair

Your car has been generally reliable and problem-free

You have always liked your old car

You can’t reasonably afford a newer car

You don’t like the idea of a new loan and monthly payments

Reasons to replace your old car

Your car is more than 10 years old and has more than 150,000 miles

The cost to repair your old car exceeds its value

You would like fewer unexpected breakdowns and repair costs

You want updated safety equipment

You don’t like your old car

You can reasonably afford a newer car

Make a decision – or not

Fix or replace? One decision you can make is……..to not make a decision. At least, not now. You can simply stick with your old car until it finally dies a natural death, at which point you’ll be forced to make a decision.

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Most of us get our first car as teenagers. It’s the car we’ll always remember.

Let’s take a look at some of the important questions you’ll want to consider when deciding about what you’ll buy as your first car, how you’ll pay for it, and how to go about the purchase.

How much can you spend?

If cost is not important and you can choose practically any car you want, we’ll get to you later. However, most teens have restrictions on how much they can spend. It might be that parents are buying and have set a price limit, or that you have your own budget and limited income.

Since most teens start driving before they become of legal age to sign a car loan contract, it’s typical to pay cash for their first car. The cash can come from savings, gifts from relatives, or a loan from parents — or a combination. Usually, it’s not enough money for a brand new car, but possibly sufficient for a good used car.

The amount of money you have to spend on your first car will directly affect your choices. Lots of money, lots of choices. Little money, fewer choices. In general, the more money you spend, the better the car — better condition, better mileage, better performance, better safety, and better reliability.

If I only have $2000 or $3000?

Two or three thousand dollars is not very much money for an automobile. It’s certainly not impossible to find a good used car for that price range but it will require a lot of searching and legwork, particularly if you restrict yourself to only certain makes and models. Most cars in this range will be junk. Your job is to find the jewel in the pile of junk. Don’t become over-anxious. Take your time. You’ll be glad you did.

The following article, Cheap Cars, explains where and how to look for inexpensive cars. This information should be a great help to you in your search.

Needless to say, any car you find should be thoroughly test driven and inspected by a qualified mechanic before you buy.  Do not take the word of the seller regarding a car’s history or condition.

Also think about the additional money you’ll need for insurance, taxes, oil, gas, tires, and repairs. Insurance for young drivers can easily be the most expensive part of car ownership. Will your funds or income take care of these additional costs?

What can I buy with $15,000?

Buyers with more money to spend have more choices. With $15,000 or more, you have the option to buy either a new car or used car.

A number of new makes and models fall into this price range, such as the Kia Spectra, Toyota Corolla, Mazda3, Scion xB and xD, Honda Fit, Nissan Versa, and Toyota Yaris.

Good used cars in this price range that are no older than 2000 year models are: Honda (Accord, Civic, CR-V, Element), Nissan (Altima, Maxima), Toyota (Camry, Corolla, Highlander, RAV4, Matrix), Mazda (MX-5 Miata), and Suraru (Impreza, Outback).

What if I have more than $15,000?

More money buys more car and more choices. Most new cars fall into the price range of $15,000 to $30,000. Consumer Reports magazine lists Toyota, Honda, Scion, Acura, Lexus, and Subaru as the top 5 brands in terms of reliability.

If you want to buy a previously owned car, you have many used luxury models to choose from. Lexus, Acura, and some BMW models are good used-car buys. Beware of Mercedes, many BMW models, Jaguar, Audi, and Land Rover. These makes have higher-than-average problem rates.

Can I get a loan?

Not unless you’re 18 years old (or older, in a few states). However, if you are at least 18, you may be able to get a loan. If you don’t yet have an established credit history, you may have to get a co-signer. A co-signer is usually a parent or family member with a good credit history who is willing to accept responsibility for your loan if you should fail to pay. A co-signer is not a co-buyer or co-owner. For more details, see the article, Can I Get a Car Loan.

What is a good first car?

Most teenagers choose smaller, more economical models such as the Honda Civic or Toyota Corolla. But tastes vary by region of the country and even by city. Car models that are considered not cool in one region may be well respected in another region. Peer approval is an important factor for teens when choosing a first car.

Generally speaking, Japanese cars will have higher quality, better reliability, and higher resale value than their American or European counterparts. There are exceptions, of course. The following article, Which Car Should I Buy?, makes some specific recommendations, based on your needs.

Should I buy new or used?

The amount of money you have to spend on your first car is a major factor in determining whether you buy a new car or a used, previously owned car. The cheapest new cars sell in the range of $13,000-$16,000. If your budget is smaller, or you don’t like the low-priced new cars, you’ll be looking at used cars. The following article, First Car: New or Used?, contains more details to help you make your decision.

Where is the best place to buy a car?

If you’re going to buy a brand new car, you’ll buy from an authorized automobile dealer who sells brands from one or more manufacturers. You can get free online price quotes at Yahoo! Autos . The prices are already discounted by local dealers. See the article, How to Buy a New Car, which gives you important tips and buying techniques. 

If you’ll be buying a used car, you have a choice of places to buy: from an individual, from an auction, from an independent used-car dealer, or a new-car dealer who has a used-car lot. You can browse local newspapers, free “autotrader” magazines at your local supermarket, used-car consignment lots, online at Craigslist.org, , or Autotrader.com. One of the best online sources of used cars is UsedCars.com. You simply plug in your ZIP code and the kind of car you want, and you get back a detailed list of cars in your area, with prices.

What’s important to you?

Consider the things that are most important in the car you want. Is it style and looks? Is it performance and speed? Is it safety? Reliability and dependability? Cost of operation and gas mileage? Room enough for friends? Coupe, sedan, convertible, small SUV, large SUV, or truck? Color? Certain features, such as premium sound system?

Make a list of the things that are most important to you and use the list as you evaluate cars. Don’t let your emotions get in the way of good sense. If your budget prevents you from getting your dream car, remember that you will be able to afford better cars later. Be patient and don’t over-extend your finances.

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