Determine the monthly payment you can afford by budgeting your expenses so you don't purchase a car only to realize later you can't afford the monthly payments. Don't get into the trap of simply asking for the lowest car payment because you will typically be placed into a loan with a greater number of years. If the time to pay off the loan is more than five years, the price of the car is more than your annual income, or the loan amount is more than half your annual income, then you are purchasing a vehicle you cannot afford. Instead, look for a lower priced vehicle.

        Before purchasing a new car, inquire about the maintenance schedule and costs. A car that appears to be affordable may not be so if the maintenance costs are too high, including changing the tires, tire maintenance, changing the fluids, belts, hoses, etc. Determine the insurance costs. Don't wait until after the purchase of the vehicle to determine the insurance costs will lead to financial difficulty. What is the fuel efficiency of the vehicle? Will you be spending a lot of time and money at the pump?

        Before purchasing a used car, ensure the seller can provide proof of regular maintenance, i.e.: oil change, tire rotation, balancing, alignment, brake service, and changing all other fluids. If no proof can be provided, then request the sale of the vehicle to be contingent upon the services being performed. If you don't ask, then you will have to pay for the services yourself at a time that will probably be way past the regular maintenance schedule.

        Some cars of the same year and model may have a substantially different insurance cost depending upon where the vehicle was built. For instance, an automaker may build the same car using factories in different countries. The parts for cars built in one country may cost more than parts for cars built in a different country. The result would be an increase in the insurance premium because the cost will be higher if the insurance company has to pay a claim. Before purchasing a car, contact your insurance company inquiring if different rates exist for the same model. Provide the insurance company with the Vehicle Identification Number (VIN) to determine if the vehicle is a model that would have a higher insurance premium.

        Be leery of a car whose model year was the first year for that car or the first year for a new redesign. Defects may exist in the car that will probably never be pinpointed and/or fixed for a model year, but will be fixed during the subsequent model years. Also, the first cars manufactured for a given production year may have defects with the production line that are discovered and repaired with the subsequent cars produced.

        Determine if a car has been recalled for any reason and verify if all the recall repairs have been corrected. Contact the National Highway Traffic Safety Administration's safety hot line at 1-800-424-9393 or http://www.nhtsa.dot.gov to determine if a vehicle has ever been recalled. Provide the make, model, and year of the vehicle.

        Determine if a car has been recalled for any reason and verify if all the recall repairs have been corrected. Contact the National Highway Traffic Safety Administration's (NHTSA) safety hot line at 1-800-424-9393 or http://www.nhtsa.gov to determine if a vehicle has ever been recalled.

Determine a car's recall history ensuring all the recall repairs have been corrected. Contact the National Highway Traffic Safety Administration's (NHTSA) safety hot line at 1-800-424-9393 or http://www.nhtsa.gov to determine if a vehicle has ever been recalled. The NHTSA is also a good resource to investigate a car's safety rating. Other sources for a car's safety rating along with a car's consumer satisfaction rating can be found at the Insurance Institute for Highway Safety at http://www.iihs.org and Consumer ReportsŪ at http://www.consumerreports.org.

        Visually examine your car looking for any defects. If the car is used, have an independent mechanic examine the vehicle. Request a copy of the dealer's pre-delivery service and adjustment checklist to determine if any problems were discovered and to determine what was repaired.

     The Carfax Vehicle History Report, available by http://www.carfax.com, is the very good tool for used car buyers. Enter the VIN# of any car to search millions of vehicle records for information about that car. The information can help you determine if the car has been in an accident, it has been junked, the odometer has been rolled back, etc. The information is obtained from DMV records, car rental agencies, leases, inspection stations, and auctions.


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